Private sector against Pheu Thai’s 600-baht minimum wage proposal

[Longwood50]

This notion that somehow you can legislate prosperity by increasing the minimum wage is nonsense.  If there were no negative ramifications from raising the minimum wage to 600 baht, why stop there.  Why not 1,000 baht or 5,000 baht.

The reality is that a "job" not a person is worth only so much per hour.  It doesn't matter how good or experienced or how much the person needs to survive, you will pay a person only so much to cut your lawn. 
 

Increasing the mimimum wage is the surest way to put people out of work. Employers can not absorb that increase in cost no more than the gasoline stations can not pass on the higher costs they now pay for gas than 3 years ago.  What it will do is increase the incentive for employers to reduce the number of employees, reduce the number of hours worked, and have employers focus on automation to eliminate them entirely. 

We are also in a global economy.  So you raise the cost of labor here, and any Thai company that competes with other companies located in Cambodia, Vietnam, the Philippines, India etc will now find the increased price they must sell their products at will put them at a competitive disadvantage.  If they go out of business or sell less product those jobs will be lost 

You want to increase the standard of living, then increase the value of the worker.  You change from being a nation who has mostly low value jobs like growing rice, cleaning hotels, being cashiers, sweeping floors, and being a waitress to higher value jobs such as automotive assembly, cell phone assembly, pharmaceutical production, tire production, etc.  

Now in order to get there Thailand has to have an educated group of workers.  No company is going to locate in Thailand or expand in Thailand if the human resources to carry out their operations dont' exist.  Apple is in China, and not because Chinese workers are cheap. but because China is the only country that has enough workers who have the training that can perform the tasks required by Apple. 

 

If you look at any of the countries with high living standards they all have one thing in common.  Their economies are based on producing goods and services that require higher levels of education for workers. You will never have a wealthy population when the majority of the workers are engaged in no skill or low skilled jobs
 

 

[MrMojoRisin]

8 minutes ago, Longwood50 said:

This notion that somehow you can legislate prosperity by increasing the minimum wage is nonsense.  If there were no negative ramifications from raising the minimum wage to 600 baht, why stop there.  Why not 1,000 baht or 5,000 baht.

The reality is that a "job" not a person is worth only so much per hour.  It doesn't matter how good or experienced or how much the person needs to survive, you will pay a person only so much to cut your lawn. 
 

Increasing the mimimum wage is the surest way to put people out of work. Employers can not absorb that increase in cost no more than the gasoline stations can not pass on the higher costs they now pay for gas than 3 years ago.  What it will do is increase the incentive for employers to reduce the number of employees, reduce the number of hours worked, and have employers focus on automation to eliminate them entirely. 

We are also in a global economy.  So you raise the cost of labor here, and any Thai company that competes with other companies located in Cambodia, Vietnam, the Philippines, India etc will now find the increased price they must sell their products at will put them at a competitive disadvantage.  If they go out of business or sell less product those jobs will be lost 

You want to increase the standard of living, then increase the value of the worker.  You change from being a nation who has mostly low value jobs like growing rice, cleaning hotels, being cashiers, sweeping floors, and being a waitress to higher value jobs such as automotive assembly, cell phone assembly, pharmaceutical production, tire production, etc.  

Now in order to get there Thailand has to have an educated group of workers.  No company is going to locate in Thailand or expand in Thailand if the human resources to carry out their operations dont' exist.  Apple is in China, and not because Chinese workers are cheap. but because China is the only country that has enough workers who have the training that can perform the tasks required by Apple. 

 

If you look at any of the countries with high living standards they all have one thing in common.  Their economies are based on producing goods and services that require higher levels of education for workers. You will never have a wealthy population when the majority of the workers are engaged in no skill or low skilled jobs
 

 

Nonsense.

 

The evidence from economic research over the past few decades suggests boosting wages back to a normal trajectory would strengthen aggregate demand and consumer confidence, help keep inflation on target, and bolster government revenues at a vital moment in the post-COVID recovery.

 

Benefits of raising minimum wage:

• higher labour force participation and productivity among low-wage workers
• better job retention and lower turnover, reducing costs of job search and training
• reducing the “monopsony” power of very large employers to suppress wages
• more money in workers’ pockets, leading to more consumer spending.

https://press.princeton.edu/books/paperback/9780691169125/myth-and-measurement

 

 

 

 

[tomyami]

Thai's are poorly educated and less productive so any increase should factor in competitiveness across the Asian region so as not to lose any jobs.

better education safer roads and tackle corruption that targets the poor.

of course they should be paid more to reduce the wealth divide gap.

[zzaa09]

Nothing has been mentioned regarding the growing and most dominate sector of self-employment/independent businesses........all of which have little to do with proposed/imposed minimum wage directives. 

[realfunster]

12 hours ago, Fat is a type of crazy said:

The problem is workers can't win. Times are bad. No pay rise. Economy surges. No pay rise due to inflationary risk. Wages are one input into the cost so a rise in wages does not mean the same percentage increase in the cost of a service or good.  There has to be common sense but if you are looking at whether a country is successful, the ability for every day workers to live a happy and dignified life, is a key benchmark. 

Not sure what industry you are in but my Thai company typically gives 4-6% annual salary increases since time immemorial. Even more this year. This is consistent with what I read in the press when they launch their annual salary increase survey results for Thailand/ASEAN.

 

Thailand has bad and worsening demographics in terms of age and educational opportunities, meaning distinctly average workers (from manufacturing to professional) can get fairly well paid and regularly switch jobs/companies with little problem here due to manpower and skills demand/supply mismatches.

 

It’s a system which conflates market demand, due to a lack of resources, with employee quality, and many are deluded enough in the Thai bubble to believe their own hype. In theory, all good for the average employee but unfortunately many parts of the Thai economy operate beyond domestic borders, where they are being and will continue to get battered by more balanced economies, and I don’t just mean cheaper ones but also those that can provide value added knowledge-based services. Having had a relative growth spurt since the 80s on being a low cost manufacturing base, that window has closed and the economy needs to sharpen up. 

 

Ultimately, like the prevailing culture, it’s quite a sabai-sabai economy, which seems to have some robustness and steadily plows forwards but I think it could do so much better. 

 

 

[jacko45k]

21 hours ago, Dart12 said:

Just another form of inflation.

Just put new tyres on the truck.. they were about 1000 baht each more than last time. Now that is inflation!

[jonclark]

So raising wages will result in more inflation, more cost to the consumer and reduce competitiveness. 

 

But the pursuit of increasing profits for shareholders / stakeholders, and increased bonuses for top executives will not result in inflation, more cost for the consumer and reduced competitiveness. 

[Dart12]

5 hours ago, jacko45k said:

Just put new tyres on the truck.. they were about 1000 baht each more than last time. Now that is inflation!

curious, what were the cost of each tyre now and before?

[jacko45k]

6 minutes ago, Dart12 said:

curious, what were the cost of each tyre now and before?

I think last time about 3500 (bit of a guess as a while ago)... more recently priced at 4500 .. but actually went with some cheaper ones.

[Dart12]

23 hours ago, jacko45k said:

I think last time about 3500 (bit of a guess as a while ago)... more recently priced at 4500 .. but actually went with some cheaper ones.

wow.  around a 25% increase for worse product.  smh.