Academics Criticise Thai Parties' Over-The-Top Wage Promises

[webfact]

Academics criticise parties' over-the-top wage promises

By The Nation

To win over workers during the July 3 election campaign, political parties outbid each other in a Bangkok seminar yesterday with proposed rises in minimum daily wages and other incentives - promises slammed by academics as impractical and unrealistic.

Assoc Prof Lae Dilokwitthayarat, of Chulalongkorn University's Faculty of Economy, said wages should be determined on reality and the financial state of three crucial factors in the Thai economy - the employers, the employees, and the state authorities.

"If wage rates can be proposed through party bluffing - like gambling with election promises, and treated as such afterwards - we'd better dislodge the entire wage tripartite committee and relevant decision making mechanism," he said.

Labour leaders said they expected the next government to ratify two agreements in the International Labour Organisation which would grant labourers more power to negotiate with state agencies over their welfare - setting up of an independent agency to take over social security benefits; and dispensing more fair grant hikes.

The other labour demands were to permanently disallow privatisation of state enterprises; to set up a body to enforce occupational safety; to set up a fund to pay compensation for work-related disabilities and diseases; and benefits for non-employees and to immigrant workers.

Democrat Party representative Buranat Samutharak said his party would raise the minimum wage by 25 per cent in the next two years, because too high a rate would hurt the economy. The Democrat-led group endorsed the ILO agreements which could materialise after the election or if the Democrats were in the next government.

Pheu Thai Party's Jaruphong Ruengsuwan said his party would raise the wage to Bt300, and the pension fund from the current Bt3,000 to Bt6,000. The ILO agreements would be endorsed within six months if Pheu Thai led the next government.

New Politics Party's Somsak Kosaiyasuk said the wage should be Bt421 and would comply with proposals tabled by the labour leaders. He said PTT should be returned fully to the Thai public.

Chat Pattana Peau Pandin Party's Olarn Kanjanaphas said the wage should be a flat rate Bt400, to be increased by Bt100 every four years. He said more conditions for Social Security Office (SSO) contributions would be set up to suit arrangements chosen by them.

Chat Thai Pattana Party's Manas Kosol said the wage should be Bt300 and the provincial tripartite offices abolished because employees were not fully represented in them. Self-employed people and small-time vendors could apply for a low-interest Bt100,000 loan after they contributed Bt100 for a minimum 100 day

-- The Nation 2011-06-22

[endure]

What would be good is that all these 'academics' and 'experts' get their <deleted> up to the North or Northeast and their 'faces to the mud and backs to the sky' and grow some rice. A few days earning, and living on, 150bt a day might change their minds. Forget the Benz climb on the Kwai cart

[hanuman2543]

I agree with all the parties that the poor people have to earn more money. But promising wage hikes from 25% in 2 yaers is unrealistic. When they do that the inflation will rise even more than now which will effect low income earners the most. Any idea how to finance all that? New taxes like inheritance tax and a tax for people owning vast amounts of land would be a step in the right direction. But who believe that this will happen?

[Greenside]

Empty House Tax, Land Tax, Inheritance Tax on very large estates.

[Rosco911]

I am not knocking the farmers in any way who really do earn little money and do need help but in the manufacturing sector the story is very different. What outsiders do not see is the fact it takes two or more Thai workers to do the same job as workers from more prosperous countries. This must be taken in to account.

Exports from Thailand have declined due to the strong THB. Export from our company have increased in price by 30% over the past 4 years putting the end selling price equivalent to what can be purchased in Europe. With added shipping cost the goods are no longer competitive.

Already over 1000 companies in the past 2 years involved in Textile manufacturing have moved out of Thailand. (Official figures) Surely this tells us something.

If the minimum wage limit increases by the amounts all the parties are talking about I fear it is the end of most manufacturing in Thailand.

One thing is certain, with the strong THB, poor skill levels plus doubling the labor costs will most certainly mean closure of our company or at the very least mean relocation.

Remember Greece before it’s too late.

[hellodolly]

I am not knocking the farmers in any way who really do earn little money and do need help but in the manufacturing sector the story is very different. What outsiders do not see is the fact it takes two or more Thai workers to do the same job as workers from more prosperous countries. This must be taken in to account.

Exports from Thailand have declined due to the strong THB. Export from our company have increased in price by 30% over the past 4 years putting the end selling price equivalent to what can be purchased in Europe. With added shipping cost the goods are no longer competitive.

Already over 1000 companies in the past 2 years involved in Textile manufacturing have moved out of Thailand. (Official figures) Surely this tells us something.

If the minimum wage limit increases by the amounts all the parties are talking about I fear it is the end of most manufacturing in Thailand.

One thing is certain, with the strong THB, poor skill levels plus doubling the labor costs will most certainly mean closure of our company or at the very least mean relocation.

Remember Greece before it's too late.

I always like to cite the 7 11 chain here. I walk into the average 7 11 here in Chiang Mai and it is generally half the size of the ones back home it will have 2 to 4 employes where as at home many times just 1 employe and never more than 2.

[DP25]

Exports from Thailand have declined due to the strong THB. Export from our company have increased in price by 30% over the past 4 years putting the end selling price equivalent to what can be purchased in Europe. With added shipping cost the goods are no longer competitive.

Exports last year from Thailand were their highest ever at 196 billion dollars, and are up 25% for the first 5 months of this year over last year

http://www.mcot.net/cfcustom/cache_page/226209.html

Already over 1000 companies in the past 2 years involved in Textile manufacturing have moved out of Thailand. (Official figures) Surely this tells us something.

That Thailand is moving beyond textiles. Textiles used to be made in South Korea and Taiwan, then moved to Thailand and Malaysia, now they're in China and Vietnam.

[hanuman2543]

It is correct thaht wages can only rise when the productivity rises too, and the productivity in many sectors in Thailand is very low. Till now many companies profited from the low labour cost, but this can be over very soon.

[Thai at Heart]

I wonder if any of these guys would support a 10% pay rise for economists?

[DeepInTheForest]

Exports last year from Thailand were their highest ever at 196 billion dollars, and are up 25% for the first 5 months of this year over last year

http://www.mcot.net/...age/226209.html

Thanks for this link. I think we should examine the statement by Commerce Minister Pornthiva Nakasai, who says "Thailand benefits from seven Free Trade Agreements with Japan, China, India, Australia, New Zealand, South Korea and the Asean countries."

From the end of the piece: "The country's trade deficit was recorded at US$3.68 billion. Despite the trade deficit under the FTAs, the trade agreements helped Thailand expand the markets, the commerce minsiter said."

What we need to consider is who benefits from the trade agreements. A blanket statement like "Thailand benefits..." is disingenuous because it suggests that all Thais are benefiting equally. From the looks of things (see the statement above), the bilateral trade agreements favor the more-developed countries, with trade profits accruing to the Thai commercial and industrial elites. The fact is, the world trade system makes use of cheap labor wherever it can find it. The onset of globalization has led to increased profits, but they are never distributed equally. This is a problem of our times for which there is no easy answer.

Bilateral trade agreements have other downsides, often hidden from the public. Japan uses Thailand as a toxic waste dump: http://www.atimes.co...a/IB21Ae01.html

Other developed countries do as well. It is very convenient for corporations to site themselves in places where environmental and labor protections are near non-existent. (Think Map Ta Phut.) They can externalize the costs of pollution. The world's less-advantaged pay the price.

What is needed is international agreements, labor representation, and environmental guidance structures. I'm not holding my breath, but I am working for change.

[wolfmanjack]

Just out of curiosity what is thailand exporting that is manufactured at a competitive price?

I know that if they raise the minimum wage to 300 baht per day I will have to have many of my workers work from home by the piece instead of here at my factory.

[hyperdimension]

Pheu Thai Party's Jaruphong Ruengsuwan said his party would raise the wage to Bt300

Over what time frame? Thaksin is known to make promises within particular time frames (e.g. "within six months"), but he or Pheu Thai have not put a time frame on this wage increase. I think a lot of Pheu Thai voters who have been attracted to this wage increase have been deceived into thinking the increase will be made immediately if Pheu Thai forms government.

Democrat Party representative Buranat Samutharak said his party would raise the minimum wage by 25 per cent in the next two years, because too high a rate would hurt the economy.

This seems much more feasible.