Wage increase: Thai businesses wary of proposed 400 baht hike

[webfact]

 

The business sector has expressed concerns over the possible negative effects of the proposed daily minimum wage increase to 400 baht.

 

The announcement, made by Prime Minister Srettha Thavisin, could lead to higher costs for consumers. Industries that rely heavily on labour, such as agriculture, food export, retail trade, and construction, would be most affected by the wage increase, according to Pisit Puapan, director of the Fiscal Policy Office’s Bureau of Macroeconomic Policy.

 

Despite these concerns, Pisit emphasised that inflation would remain within the target range and that the impact on small and medium-sized enterprises (SMEs) would be limited. He suggested that some businesses, such as banking and finance, could benefit from increased purchasing power.

 

However, the proposed minimum wage increase has not been unanimously welcomed. Sangchai Theerakulwanich, president of the Federation of Thai SMEs, warned that a wage hike could lead to significant difficulties for SMEs, many of whom are already struggling with liquidity issues and loan acquisition.

 

by Alex Morgan

Photo: Wichan Charoenkiatpakul/ Bangkok Post

 

Full story: The Thaiger 2023-09-25

 

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[Henryford]

Why? they just won't pay it.

[nausea]

Problem is it distorts the laboor market - better pay for some in the formal economy but less jobs in this sector overall. Won't touch the black economy, which is significant.

[Adumbration]

I spend more than 400 baht per day on food for my pets.

[retarius]

A 33% increase, that's sure to draw in lots of foreign company investment in Thailand. NOT.

[Trippy]

Raising the minimum wage will only increase inflation to compensate, which will hurt the tourism industry in the long run. 

[Moti24]

2 hours ago, Adumbration said:

I spend more than 400 baht per day on food for my pets.

That's a lot for goldfish food!

[hotchilli]

4 hours ago, Henryford said:

Why? they just won't pay it.

Profits are not for the workers.

[huangnon]

3 hours ago, retarius said:

A 33% increase, that's sure to draw in lots of foreign company investment in Thailand. NOT.

I'm sure this won't affect the status or income of the massive immigrant (legal or otherwise) workforce here.

[Paul Henry]

Its not a 400bht hike!

[Surasak]

A 50 Baht/day increase doesn't sound much, but for some of these small businesses an extra payout of 1500Baht/month can mean make or break.

[Cake Monster]

2 hours ago, hotchilli said:

Profits are not for the workers.

And neither should they be

The Workers have made no Capita; Investments Etc into the Business's and take no Financial risks, or personal risk

They just have to turn up and do the job they are employed to do, and can clock off at shift end

[SoilSpoil]

8 hours ago, Adumbration said:

I spend more than 400 baht per day on food for my pets.

Do you keep elephants?

[still kicking]

8 hours ago, Adumbration said:

I spend more than 400 baht per day on food for my pets.

How many girls you got?

[Srikcir]

Much empirical evidence suggests that wage increases do not lead to inflation. "Do Higher Wages Cause Inflation?", April 2004 by Magnus Jonsson and Stefan Palmqvist.

 

Simple correlations have found no relationship between the sectors with the most wage growth and where costs are going up the most. "Wage slashing is not the answer to inflation," Nov. 4, 2022 by Kate Bahn, MSNBC Columnist. 

 

"Inflation and nominal wage growth tend to stabilize, leaving real wage growth broadly unchanged." Study by IMF in Nov. 2022, cited in "Will giving workers a pay raise really make Inflation worse?", www.bigissue.com

 

Finally, lack of worker negotiating power will suppress wage increases, allowing greater corporate profits that increase income inequality. In Thailand about 2% of the workforce is organized into trade unions and less than half percent of private enterprises in Thailand had unions. March 2017, "International Labour Standards and Thai Trade Unions Agenda for Labour Law Reforms," www.ilo.org/asia/countries/thailand

 

[safarimike11]

8 hours ago, Adumbration said:

I spend more than 400 baht per day on food for my pets.

Wow... I am truly impressed.

[transam]

9 hours ago, Adumbration said:

I spend more than 400 baht per day on food for my pets.

Wow, you have a zoo................

[Adumbration]

1 hour ago, SoilSpoil said:

Do you keep elephants?

My dogs eat exactly the same as me.  I cook their meals with mine.  Prime cuts of organic chicken and pork, salmon, and lots of seafood.  The seafood would be very expensive but I mostly catch it myself.  My little bloke loves pan sauteed squid and also albacore steaks (with the bones removed).

 

I was not spruiking how much I spend on my pets, but rather trying to highlight how little 400 baht buys nowadays and how tough it must be to live on that amount.