Reducing Income Inequality In Thailand

[sbk]

Are there any solutions for this problem here? The low low wages paid by some employers shocks me, even after 20 years in the country. I wonder how their employees can survive on such low wages. Much less the low wages offered the Burmese etc.

Are there any ways to fix this? The minimum wage seems awfully low to me, would upping the minimum wage have any effect?

[samuibeachcomber]

I think there is a very good case for a minimum wage policy,applied to the various job descriptions.As long as everyone realises(thai and expats alike)that prices would have to go up,but a small price to pay to help the less well off.And while they are at it a big injection of funds is needed to upgrade the thai public hospitals.there's enough "tea" money floating around to do this without applying higher taxes IMHO.

[hhgz]

What has happened in other countries where a high minimum wage is implemented? The previous poster noted "higher prices". That's true. You'd also have higher unemployment. Accordingly, some people would make more money, and others would not make any money. Is that a better scenario than what is present today? If you're able to keep your job, it'd be better. If you loss your job, it would be worse.

[LaoPo]

Are there any solutions for this problem here? The low low wages paid by some employers shocks me, even after 20 years in the country. I wonder how their employees can survive on such low wages. Much less the low wages offered the Burmese etc.

Are there any ways to fix this? The minimum wage seems awfully low to me, would upping the minimum wage have any effect?

The answer lies in the hands of:

http://eng.mol.go.th/

and the:

http://www.thailabour.org/en

I think it has also to do with the culture and if workers in certain industries are organized or not (agriculture springs to mind).

LaoPo

[Mario2008]

Are there any solutions for this problem here? The low low wages paid by some employers shocks me, even after 20 years in the country. I wonder how their employees can survive on such low wages. Much less the low wages offered the Burmese etc.

Are there any ways to fix this? The minimum wage seems awfully low to me, would upping the minimum wage have any effect?

Raising the minimum wages is a step forward. But it will also mean more unemployment. I already see enough staff in Thailand, doing with 5 people what 3 people easily can do. So for a part it will mean more income for some, but it will also mean a greater stimulanse to reduce labour cost.

[Robert44]

All depends on the company - if big international then they follow Thai existing min wage system (they have to).

However most small local companies try to aviod as margins are so tight - if you increase min wage then they will be under pressure to get more Burmese/Lao etc workers. Easy to get just ask your local BIB and they can provide - cost is 500 Baht per month per and this is just taken off their salaries. Also if you increase min wage then Thai becomes less attractive for companies and in current climate that is not a thing anyone wants as again would increase unemployement.

First step is to educate people - only they have the real power and desire to make this type of change.

[teletiger]

I equate prices with daily wage here and in the West. A pizza (medium) in Pak Chong (Tesco mall) 249 Baht. Would people pay 80/100 euro in the West? 249 Baht being 1.3 days work here in Issan.

In reply to the OP's question.....not any time soon. When you can take the greed of the "few" out of Thailand, you might get somewhere. Not until they are paying 20/30 times more for their food, than now, will they appreciate their country cousins.

Cut off all electricity and diesel tomorrow and 75% of Thailand would adapt and be fine.

Income equality is something that has to be forced. Revolution...etc. As one of the 75%....<deleted> 'em. Let them eat their money.

Having said that, were I a vegan, my food bill here would be nil. We grow a lot of our own, as do most of our neighbours, and the swap system works surprisingly well.

Did that sound really red?....

By the by...we pay 30% above the going rate for labour (falang...right?).....but explain, we expect some effort after lunch.

'And by way of nothing...Thai country people rock.

Regards.

[nakachalet]

we do have both thais and farangs helping us.

many of the posts here do strike a soft spot in my heart. the thais' wages including labor forces from neighboring countries are truly subsistent judged by western standards. our average bimonthly pay for local laborers is already above other by about 10-15%. besides, our helpers live in western style housing provided free for all our helpers and eat restaurant grade food, three meals a day, including rainy days.... lol

however, after so many years, we still have to remind each one to keep their rooms and surrounding areas clean and free of paper, plastic bags and bottles etc.... lol however, i do not have to do so with farangs.... another major distinction between the local and farang helpers is, there is very little supervision needed throughout the day for the farangs but it is another story for the thais.... which i am sure many of you are already very aware of....

each time that an improvement is proposed, the elderly patriarch generation in the family would laugh and murmur that another step closer to western utopia in the middle of global economic crises.... another new approach to scrub and lighten up the color of the skin of the thais.... lol

yes, the average wages for laborers should be improved national wide.

but my other investors and other oriental business proprietors from singapore, taiwan, japan, dubai, india and china are surely not of the same opinion here....

currently, the average cost per person, per month, men and women alike, is about 10,500 baht inclusive of wage, housing, water, electricity, social sec taxes, food and beveragel and incidental medical expense. the expenditure for farang counterpart is much higher....

the problems and the solutions are multidimensional and truly complex.... but i shall continue to do what i can.... amen.

Edited September 18, 2009 by nakachalet

[Abrak]

There are a couple of interesting studies out one by Dimson covering 100 years of data and 17 countries but also support by Buffett which suggest that investment returns are inversely related to GDP per capita growth and essential productivity and technology gains accrue to workers not capital.

Given this placing a minimum wage is essentially pointless in the long run. The key is to attract capital. Now low wages help but so does investment to create highly qualified people. Unskilled people are the lowest common denominator. Fixing a high minimum wage is counter productive because it discourages capital and increases unemployment which ultimately means more taxes on the employed.

Instead of supporting the unemployed you are better off investing that money in the future employed.

And say as we have seen in China by not really having a minimum wage you increase capital so the effective minimum wage grows.

[raro]

I know I might get flamed for this, but labour is a commodity and for commodities there are markets.

If I offer someone to perform a certain task for a certain amount of money in return, then this is a deal.

I do not force my maid to work for the amount of money I pay her as she can quit the job any day she wants to, and I am sure once she can make 500 Baht more a month somewhere else, she will quit. It is then up to me to raise the price for her work if I would feel that it is worth it. The alternative is replacing her with someone else who is willing to pay for the lower salary.

In practice, I wonder why so many foreigners are employing Thai staff at rather low wages and then complaining about the non-performance of that staff. Our operations lady is doing an outstanding job, but she would be bothered showing up at work for a paltry 20,000 Baht per month.

[HenryLongfellow]

I do not force my maid to work for the amount of money I pay her as she can quit the job any day she wants to, and I am sure once she can make 500 Baht more a month somewhere else, she will quit. It is then up to me to raise the price for her work if I would feel that it is worth it. The alternative is replacing her with someone else who is willing to pay for the lower salary.

This is fine if there are shortages of labour, but it preys on people during times of abudant workforce as it allows you to negotiate with nothing to lose against someone that may starve if they don't accept your "generosity". Edited September 19, 2009 by HenryLongfellow

[hhgz]

"And say as we have seen in China by not really having a minimum wage you increase capital so the effective minimum wage grows."

Huh?

[sbk]

Yes, I can see that educating the children is the way forward to reducing income inequality, as only a skilled person with something to offer can demand a reasonable wage. But I have to admit to finding the "if she doesn't like it she can go elsewhere" attitude to be rather cold.

We pay our staff very well, higher than most places that are similar to ours. We treat them well and in return we have hardworking and loyal employees. I know this doesn't always happen but it seems to me that these extremely low wages are a sign of a lack of respect for our fellow human beings.

Call me an idealist, I guess

[bellagrego]

Sadly, I must say, with regret. There is no solution to the problem of poverty, and low wages. One of the responders has it dead on. "Labor is a commondity". simply and accuratly stated. It is difficult for a westerner to accept that premis and let markets work.

I see the problem, specifically Thailand, as self inflicted. This society is non competitive, protectionist, and totally closed to inovation and competition. It has benifited greatly by early ties to the west but now it's neighbors are moving into their markets with better deals for foreign investments and a more stable enviroment. Only the Thais can remedy thier economy.

[thaihome]

Sadly, I must say, with regret. There is no solution to the problem of poverty, and low wages. One of the responders has it dead on. "Labor is a commondity". simply and accuratly stated. It is difficult for a westerner to accept that premis and let markets work.

I see the problem, specifically Thailand, as self inflicted. This society is non competitive, protectionist, and totally closed to inovation and competition. It has benifited greatly by early ties to the west but now it's neighbors are moving into their markets with better deals for foreign investments and a more stable enviroment. Only the Thais can remedy thier economy.

That is an amazingly inaccurate statement based is would appear solely on Sukhmivt barstool knowledge. It completly ignores the facts.

Just as an example, lets look at the World Banks "Ease of Doing Business Ranking for 2009. There is Thailand, number 3 in Asia, only behind Singapore and HK. I could go on and on, but I think this sums it up nicely.

TH

Edited September 20, 2009 by thaihome

[Felt 35]

For a start....

1.

A National workers Confederation of Trade.

Functioning as a mother Labour organisation which

oversee and supervise all the private and Government labour organisation.

Benefits for members include, legal aid, political and legislative actions, cultural and sports projects, insurance, and economic support in conflict situations. All members will pay union dues, preferably through an equitable, percentage-based system.

3.

Wages. No minimum wage. Wages follow a tariff set in cooperation /deals between the workers confederation of trade and the actual company /employers organisation. The wages will be discussed and adjusted annually. Equal job means equal wage.

4.

A Tax system which is based on the principle that everybody should pay tax according to their means and receive services according to their needs. The public sector have major tasks to serve the interest of the population, including the public health system under which will have the right to treatment, the right to education and major tasks in several other areas. The taxes paid will be spent on healthcare, hospitals, education, transport and communications.

In addition taxes will contribute to greater equality between individuals.

The taxes should at least include income tax, tax on wealth, property tax and inheritance tax.

5.

Education implemented in the schools about the benefits and the practical, moral and ethical ways to equality.