Bt300 Minimum Wage To Cost Additional Bt140 Billion: Thai Chamber

[Thaddeus]

working for a pittance wears very thin very quickly.....

So does inexpensive underwear.

Expect fallout.

[whybother]

5 people are then working for a reasonable wage, and have increased buying power, which means they go and buy off person no 6 who also has an increased wage and is working in the consumer sector........

Or you can be negative, do little, and wonder why once people have earned enough to eat, they do not work too hard for the remainder of the pittance they receive.......

If one out of 6 people are unemployed, there isn't going to be a job anywhere for the one that gets let go. They won't be getting the minimum wage from anyone.

So it's either increased costs, and therefore increased prices, or it's people out of work.

In most other countries, people on minimum wages are barely able to survive. But the minimum wages are still only increased at a rate a bit higher than inflation, because that's what the economy can handle. Look at all the jobs in manufacturing that have moved into Asia because it's too expensive in our home countries.

Once again, no one is arguing against an increase in minimum wage, but the countries economy can't handle a 40-70% increase immediately (or within a year as it now is).

[Ricardo]

My remarks appear to carry about as much value as the current minimum salaries then Rubl.......you guys should really be ashamed of yourselves, know any countries that went bankrupt for introducing the minimum wage...and of course where ever it has been introduced there was outcry....what people failed to realise.....more to spend boosts consumer confidence and business thrives......never heard of that one?

And as for the noodle shops well maybe people will be able to afford to eat there more regularly, so as the business improves so can the salaries...and as the salaries improve the girls work harder and an upward spiral develops.....

"you guys should really be ashamed of yourselves"

Why ? We aren't the ones who promised pre-election a national minimum-wage of 300B/day, only to start to weasel out-of-it within days of winning a narrow majority (53% of seats & 48% of the vote is no overwhelming-majority, although it is enough to govern, without a doubt). That's 'Defender-of-the-Poor' Thaksin !

I too give work to 2 people, and try to treat them fairly, by local-standards. I am not ashamed of that !

I would agree that it would have been less-disruptive to employment & the economy & individual-businesses, to phase-in the wage-rise over a couple of years, as the Dems were proposing to do. And it would have intelligent if someone had proposed gradually reducing the disparity in local-rates, towards the national-rate, over a year or two.

Edited July 16, 2011 by Ricardo

[rixalex]

The Dem proposals have one problem: they were proposed by the dems who are basically unelectable, and that is one of the biggest problems the country faces. It doesnt have a viable alternative to PTP. The Dems to serve democracy and Thailand need to reinvent asap. Ridding themsleves of Abhisit asap will be their first test

I agree that ridding themselves of Abhisit - or should that be Abhisit ridding himself of the Dems? - might be a necessary step in terms of reinventing themselves, but that may well mean things getting a lot worse before they get better, as Abhisit i think was one of the few good things it had going for it.

There is an argument that reinvention or not, the Dems simply will never win over a certain section of society who have been brought up on years and generations of Democrat hating - hatred not without certain good cause i should add.

Perhaps what Thailand needs now is something completely new, akin to what Thaksin did ten odd years ago. A fresh sheet of paper, with no red or yellow connection whatsoever, and with someone charismatic heading it up.

[scorecard]

5 day working week maximum working days per month 22 x 300 baht = 6600 per month.........and you are telling me business cannot afford these wages........ .......must be some business

All in (Thai) perspective, my dear chap. With western eyes it may seem absurd, but we're talking about Thailand. Minimum wage earners mostly work 28 days a month. Productivity is very low with minimum wage earners (I wouldn't really work hard either I think), but that means a few people are needed where in other countries one will do the job.

So to conclude, without further details and background info to compare things, your remarks are of no value. Nothing personal, just my opinion.

Stay cool and keep smiling

Agree with Rubi on all points!

[YellowFeverCAD]

Well Gentlemen I suggest they give it a go, and let us bring Thai salaries more into line with their western counterparts, because in case you had not noticed, that is the way prices for the consumer are heading..........I see words like training, education, scattered among the solutions.......in reality let us give even the lowest paid a reasonable salary to aim for........might just be a starting point......because working for a pittance wears very thin very quickly.....

Spoken like a person that has either never owned a business or never owned one in Thailand. In case you were not aware this is NOT the West so why should salaries be raised to be more in live with Western ones? Among the few businesses my wife and I own we employ well over 100 people and I can assure you firstly that if we were forced to raise salaries across the board to the 300 b/day minimum there would be layoffs and not a small token few. It is just too much cost to absorb all at once overnight or even over the course a year it might be too much.

For your continued incorrect bleating about how the workers need to make this 300 baht per day to live like humans I think you need to check out our employee parking lot. Yes we have some skilled staff that make well beyond the 300 rate but for the most part it's unskilled labor and under 300 but above the current BKK minimum. As a whole our staff seems to live fine, they have kids and places to live and many drive motorbikes and some have cars and I seem them eating everyday just like real people.

Maybe you should learn about Thai culture and how they live and they function as a family group before you decide that they are not making enough to live based on newspaper clippings. This debate with ill informed people is simply a waste of time suddenly raising to 300 baht a day will put some smaller to mid sized factories out of business if it is enforced.

[473geo]

Well Gentlemen I suggest they give it a go, and let us bring Thai salaries more into line with their western counterparts, because in case you had not noticed, that is the way prices for the consumer are heading..........I see words like training, education, scattered among the solutions.......in reality let us give even the lowest paid a reasonable salary to aim for........might just be a starting point......because working for a pittance wears very thin very quickly.....

Spoken like a person that has either never owned a business or never owned one in Thailand. In case you were not aware this is NOT the West so why should salaries be raised to be more in live with Western ones? Among the few businesses my wife and I own we employ well over 100 people and I can assure you firstly that if we were forced to raise salaries across the board to the 300 b/day minimum there would be layoffs and not a small token few. It is just too much cost to absorb all at once overnight or even over the course a year it might be too much.

For your continued incorrect bleating about how the workers need to make this 300 baht per day to live like humans I think you need to check out our employee parking lot. Yes we have some skilled staff that make well beyond the 300 rate but for the most part it's unskilled labor and under 300 but above the current BKK minimum. As a whole our staff seems to live fine, they have kids and places to live and many drive motorbikes and some have cars and I seem them eating everyday just like real people.

Maybe you should learn about Thai culture and how they live and they function as a family group before you decide that they are not making enough to live based on newspaper clippings. This debate with ill informed people is simply a waste of time suddenly raising to 300 baht a day will put some smaller to mid sized factories out of business if it is enforced.

Well firstly you appear to admit the rise is possibly manageable yourself by stating 'It is just too much to absorb all at once........even over the course of a year it might be too much'

Perhaps you would care to provide a breakdown of your skilled and unskilled workers earnings, annual profit you make per head per employee.......then we will all be in a position to judge? Otherwise your post could just be seen as a small business person trying to protect his profits...of course I'm sure this is not the case as you are concerned enough to be aware how well all yourstaff are doing.......look forward to seeing your numbers, I guess you are quite happily living your life in Thailand on a salary of less than 300 baht a day.

I guess those that run business and are already paying above the minimum wage are not too concerned about the rise.........makes you wonder how and why they do it?

[whybother]

Well firstly you appear to admit the rise is possibly manageable yourself by stating 'It is just too much to absorb all at once........even over the course of a year it might be too much'

Perhaps you would care to provide a breakdown of your skilled and unskilled workers earnings, annual profit you make per head per employee.......then we will all be in a position to judge? Otherwise your post could just be seen as a small business person trying to protect his profits...of course I'm sure this is not the case as you are concerned enough to be aware how well all yourstaff are doing.......look forward to seeing your numbers, I guess you are quite happily living your life in Thailand on a salary of less than 300 baht a day.

I guess those that run business and are already paying above the minimum wage are not too concerned about the rise.........makes you wonder how and why they do it?

You don't think that those already paying over minimum wage won't be hit too?

You seem to ignore the reality. If there aren't sufficient profits, then why run the business at all? Shut down - more unemployment.

[noahvail]

Well firstly you appear to admit the rise is possibly manageable yourself by stating 'It is just too much to absorb all at once........even over the course of a year it might be too much'

Perhaps you would care to provide a breakdown of your skilled and unskilled workers earnings, annual profit you make per head per employee.......then we will all be in a position to judge? Otherwise your post could just be seen as a small business person trying to protect his profits...of course I'm sure this is not the case as you are concerned enough to be aware how well all yourstaff are doing.......look forward to seeing your numbers, I guess you are quite happily living your life in Thailand on a salary of less than 300 baht a day.

I guess those that run business and are already paying above the minimum wage are not too concerned about the rise.........makes you wonder how and why they do it?

You don't think that those already paying over minimum wage won't be hit too?

You seem to ignore the reality. If there aren't sufficient profits, then why run the business at all? Shut down - more unemployment.

In addition, Geo doesn't seem to understand business at all when he says "I guess you are quite happily living your life in Thailand on a salary of less than 300 baht a day." With that, he seems to neglect the cost of establishing a business - plant, equipment, materials, taxes, and so on - and sneeringly (my interpretation) suggests that the business owner should be happy living on the same pay scale as a trainee janitor ("less than 300 baht a day." Why should a business owner, who makes the investment, hires and pays people, work for that piddling sum of money? It would be the same as if a person in the US put up $10 million to start a business and then was paid $15,000 per annum when he could have invested his money at a paltry 3% and earn $300,000. Nobody would start or maintain a company in those circumstances, either here in Thailand or in the West.

Edited July 16, 2011 by noahvail

[livinthailandos]

Im all for raising minimum wage but

a. In my opinion it should be set out over a period of time and adjusted to raise over x amount of time, not be push on to business in less than 6 months

b. Beyond that government needs to really set out and establish some realistic idea of how many small business are in thailand, how many would be affected

c. as small business owners we get zero tax breaks for anything. what benefits do we get when you raise the minimum wage. nothing

d. I know there's support for the little guy to make better wages, thats fair enough, but will you support them if companies have to layoff lots of people. and then there unemployed, are you going to pay for their unemployment benefits

e. Raising the minimum wage only causes one thing for my company it means I have to pay even more in wages to stay competitive to get staff. Thats fine if it happens I already realize when it happens I'll have to fire 7 people in my company. Another small business owner i know has similiar input to, but has lots of staff, he told me basically to survive he'll fire 20 people. I hope I'm wrong but if lots of small business have to fire lots of people, the good news for thai government is now you can deal with rising unemployment.

Last note, its hard to take any thai government seriously on anything as so many so called promises on every scale have been made and never happened.

For people who have never ran their own business, its hard for us to take you seriously when you have no experience in matters like this.

[473geo]

So what is the bottom line.......the minimum wage hike is unacceptable because business profit demands dictate business simply cannot afford it?

Or the business managers are rolling happily along and don't want to afford the new minimum wage level as they may have to get out and increase turn over to accomodate the rise?

[whybother]

So what is the bottom line.......the minimum wage hike is unacceptable because business profit demands dictate business simply cannot afford it?

Or the business managers are rolling happily along and don't want to afford the new minimum wage level as they may have to get out and increase turn over to accomodate the rise?

You really don't seem to have much idea about business.

[rixalex]

So what is the bottom line.......the minimum wage hike is unacceptable because business profit demands dictate business simply cannot afford it?

Or the business managers are rolling happily along and don't want to afford the new minimum wage level as they may have to get out and increase turn over to accomodate the rise?

Geo, have you ever run your own business?

[473geo]

I admit to never running a business in Thailand......when I did run a business I only took on work that would pay my staff according to their skill levels and the salary they deserved....which was quite simply way above the minimum wage......for a labouring but skilled employment. We provided a quailty product got out there and picked up the contracts that provided the relevant profit margin......... that was my experience in business.........I still use the same business ethic now........yes profit is important......but let us not forget the way a business is managed can dictate the level of profit as much as any outside forces.

Don't think I do not have admiration for those that come to Thailand, invest and try to make a business work, credit due to them for their efforts, yes there may be some fall out, yes there may have to be a reappraisal of some types of Thai business, yes there may need to be evaluation in the effect on small business and perhaps incentives introduced. I do not agree that this cannot be introduced in some form.

Edited July 16, 2011 by 473geo

[whybother]

I admit to never running a business in Thailand......when I did run a business I only took on work that would pay my staff according to their skill levels and the salary they deserved....which was quite simply way above the minimum wage......for a labouring but skilled employment. We provided a quailty product got out there and picked up the contracts that provided the relevant profit margin......... that was my experience in business.........I still use the same business ethic now........yes profit is important......but let us not forget the way a business is managed can dictate the level of profit as much as any outside forces.

Don't think I do not have admiration for those that come to Thailand, invest and try to make a business work, credit due to them for their efforts, yes there may be some fall out, yes there may have to be a reappraisal of some types of Thai business, yes there may need to be evaluation in the effect on small business and perhaps incentives introduced. I do not agree that this cannot be introduced in some form.

Once again. No one is saying that minimum wages shouldn't be increased.

What most people are objecting to is such a large increase in such a short time.

[Chupup]

5 day working week maximum working days per month 22 x 300 baht = 6600 per month.........and you are telling me business cannot afford these wages........ .......must be some business

Wake up, people in the north work a 7 day week try 28x300 == 8400 bht where do you live ??

[livinthailandos]

When we talking about such a large increase, were talking almost 40% increase in a short period of time, when you employ 1 person it doesn't hurt to much for the payroll, but when you employ anywhere from 10 - 500 people, and then you have to pay more wages just to stay competitive, then on top of that the government is offering zero help or subsides for small business to cope or prepare. this is why we feel the way we do.

[noahvail]

5 day working week maximum working days per month 22 x 300 baht = 6600 per month.........and you are telling me business cannot afford these wages........ .......must be some business

Wake up, people in the north work a 7 day week try 28x300 == 8400 bht where do you live ??

True, true, two days off per month. Except for the government salaried types, who hold college B.A. degrees, and earn 6,800 per month to start. My wife tells me her friends in admin are NOT happy over that prospect.

[Crushdepth]

You can't have a large pay rise without a matching productivity increase. Unless you want to resort to communism.

[rixalex]

You can't have a large pay rise without a matching productivity increase. Unless you want to resort to communism.

No you can't unless you buy into the myth that all business owners are greedy buggers sitting on plentiful profits that could cover the extra costs without trouble.

[473geo]

5 day working week maximum working days per month 22 x 300 baht = 6600 per month.........and you are telling me business cannot afford these wages........ .......must be some business

Wake up, people in the north work a 7 day week try 28x300 == 8400 bht where do you live ??

What price a life?........that is some justification not to raise the minimum wage......

[473geo]

You can't have a large pay rise without a matching productivity increase. Unless you want to resort to communism.

No you can't unless you buy into the myth that all business owners are greedy buggers sitting on plentiful profits that could cover the extra costs without trouble.

In an earlier post did you not state that people would not invest if the plentiful profit margins were not maintained?

[scorecard]

So what is the bottom line.......the minimum wage hike is unacceptable because business profit demands dictate business simply cannot afford it?

Or the business managers are rolling happily along and don't want to afford the new minimum wage level as they may have to get out and increase turn over to accomodate the rise?

Businesses fall into many different categories, many are operated on a very thin profit margin because of competition. The percentage of companies who make very large net profit is not that big. Small business is the backbone of total business in every capitalist country in the world - mostly small business with limited profit and high risk of failure.

The competitors who are clever will take your customers in a second if your not very careful, which means that you need to devote a lot of time to etaining clients, and often this means price, as well as gaining new clients in case a segment in your business model changes / disappears, etc etc., the old 80/20 principle.

What's to some extent missing from this whole argument is other means to share the bottom line common wealth of Thailand or any country. Redistribution of wealth.

One factor is taxes. You might note that pt have said raise daily pay and reduce corporate tax all in the same breath. Day one of economics 101 says that equation doesn't compute. And why am I left thinking that policy to reduce corporate taxes, or any taxes, is totally innapropriate when pt have offered a plate of goodies which will bankrupt thailand in five minutes. Plus there's no increased budget for education.

Policies to share the wealth need to be looked at much more seriously. The first example is health - well something is in place already but could be much better. Another simple examples, subsidized mass transport, and other factors which would comparitively put quite a lot of extra cash in the pocket of low wage earners.

Another possibility for Thailand is to 'force' a better geographical spread of factories, value added work, etc. In some states in India you apply for a licence to start a new enterprise, and if it's approved the government also indicate where it much be located within that state, to spread work opportunites, often including freight subsidies etc., taken from the overall common wealth.

The dems started the policies and laws to produce a capital gains tax, another way to redistribute wealth and common in many countries in the world, don't see pt talking about this and probably never will.

For me the long-term bottom line is: a lot more attention to real education which breeds analytical, creativy, innovative people and a better spread / volume of value added work opportunites which ultimately means that a much larger percentage of all Thais have a good quality of life through their own productivity. I don't see pt talking about any elements of this - just lots of unaffordable goodies.

[473geo]

When we talking about such a large increase, were talking almost 40% increase in a short period of time, when you employ 1 person it doesn't hurt to much for the payroll, but when you employ anywhere from 10 - 500 people, and then you have to pay more wages just to stay competitive, then on top of that the government is offering zero help or subsides for small business to cope or prepare. this is why we feel the way we do.

I can understand there are business sectors that will feel the effects and I have no issues with small to medium business receiving some incentive, however is it not also plausible that there are many business out there exploiting the cheap labour market to the full, and is this an area that should be addressed?

[rixalex]

You can't have a large pay rise without a matching productivity increase. Unless you want to resort to communism.

No you can't unless you buy into the myth that all business owners are greedy buggers sitting on plentiful profits that could cover the extra costs without trouble.

In an earlier post did you not state that people would not invest if the plentiful profit margins were not maintained?

No i didn't, although i would agree in the case of big corporations and businesses, they don't bother unless the rewards are good - and perhaps that's what the person (whybother?) who made the comment was referring to. These are the businesses that could most easily afford to soak up the extra costs and still survive, but on the flip side, these are the businesses that can most easily up shop and go elsewhere.

My comment was more a reference to the small to medium-sized businesses. These are the ones i care about, and these are the ones that despite whatever notions you may have about the owners being big bad cruel exploiters, really would struggle to cover such large increases in labour expenses being implemented overnight.

Edited July 16, 2011 by rixalex

[noahvail]

I can understand there are business sectors that will feel the effects and I have no issues with small to medium business receiving some incentive, however is it not also plausible that there are many business out there exploiting the cheap labour market to the full, and is this an area that should be addressed?

Here I agree with you. Historically, that has always happened. I have personal knowledge of several that have moved to Thailand over the past 10 years. Two have already closed, having learned that cheap inefficient labour is more costly than expensive effective labour. Even so, those companies were paying well over the minimum in BKK and CM.

Companies that are looking for cheap labour always move to where it's cheaper (the grass is greener philosophy). The textile industry used to be a major player in Thailand. In recent years it's moved to Cambodia and Viet Nam.

So, retaining companies is/should be very important to Thailand. Moving the minimum wage up incrementally (pegged to inflation) from year to year is the answer, combined with increases in worker efficiency (which generally involves further investment by the companies' owners - one hopes the government would provide some assistance to modernization and upgrading of machinery).

[473geo]

So what is the bottom line.......the minimum wage hike is unacceptable because business profit demands dictate business simply cannot afford it?

Or the business managers are rolling happily along and don't want to afford the new minimum wage level as they may have to get out and increase turn over to accomodate the rise?

Businesses fall into many different categories, many are operated on a very thin profit margin because of competition. The percentage of companies who make very large net profit is not that big. Small business is the backbone of total business in every capitalist country in the world - mostly small business with limited profit and high risk of failure.

The competitors who are clever will take your customers in a second if your not very careful, which means that you need to devote a lot of time to etaining clients, and often this means price, as well as gaining new clients in case a segment in your business model changes / disappears, etc etc., the old 80/20 principle.

What's to some extent missing from this whole argument is other means to share the bottom line common wealth of Thailand or any country. Redistribution of wealth.

One factor is taxes. You might note that pt have said raise daily pay and reduce corporate tax all in the same breath. Day one of economics 101 says that equation doesn't compute. And why am I left thinking that policy to reduce corporate taxes, or any taxes, is totally innapropriate when pt have offered a plate of goodies which will bankrupt thailand in five minutes. Plus there's no increased budget for education.

Policies to share the wealth need to be looked at much more seriously. The first example is health - well something is in place already but could be much better. Another simple examples, subsidized mass transport, and other factors which would comparitively put quite a lot of extra cash in the pocket of low wage earners.

Another possibility for Thailand is to 'force' a better geographical spread of factories, value added work, etc. In some states in India you apply for a licence to start a new enterprise, and if it's approved the government also indicate where it much be located within that state, to spread work opportunites, often including freight subsidies etc., taken from the overall common wealth.

The dems started the policies and laws to produce a capital gains tax, another way to redistribute wealth and common in many countries in the world, don't see pt talking about this and probably never will.

For me the long-term bottom line is: a lot more attention to real education which breeds analytical, creativy, innovative people and a better spread / volume of value added work opportunites which ultimately means that a much larger percentage of all Thais have a good quality of life through their own productivity. I don't see pt talking about any elements of this - just lots of unaffordable goodies.

Productivity to my mind is essentially a bi product of the way employees are managed, educated and trained. Are we blaming political parties for the lack of effort to develop employees? Perhaps if business is educated to accept their staff as something more than a cheap expendable resource, they may take on the role of development more readily. Many of the major corporates have these type of development programs in place......perhaps a contributor to their global success.

[scorecard]

So what is the bottom line.......the minimum wage hike is unacceptable because business profit demands dictate business simply cannot afford it?

Or the business managers are rolling happily along and don't want to afford the new minimum wage level as they may have to get out and increase turn over to accomodate the rise?

Businesses fall into many different categories, many are operated on a very thin profit margin because of competition. The percentage of companies who make very large net profit is not that big. Small business is the backbone of total business in every capitalist country in the world - mostly small business with limited profit and high risk of failure.

The competitors who are clever will take your customers in a second if your not very careful, which means that you need to devote a lot of time to etaining clients, and often this means price, as well as gaining new clients in case a segment in your business model changes / disappears, etc etc., the old 80/20 principle.

What's to some extent missing from this whole argument is other means to share the bottom line common wealth of Thailand or any country. Redistribution of wealth.

One factor is taxes. You might note that pt have said raise daily pay and reduce corporate tax all in the same breath. Day one of economics 101 says that equation doesn't compute. And why am I left thinking that policy to reduce corporate taxes, or any taxes, is totally innapropriate when pt have offered a plate of goodies which will bankrupt thailand in five minutes. Plus there's no increased budget for education.

Policies to share the wealth need to be looked at much more seriously. The first example is health - well something is in place already but could be much better. Another simple examples, subsidized mass transport, and other factors which would comparitively put quite a lot of extra cash in the pocket of low wage earners.

Another possibility for Thailand is to 'force' a better geographical spread of factories, value added work, etc. In some states in India you apply for a licence to start a new enterprise, and if it's approved the government also indicate where it much be located within that state, to spread work opportunites, often including freight subsidies etc., taken from the overall common wealth.

The dems started the policies and laws to produce a capital gains tax, another way to redistribute wealth and common in many countries in the world, don't see pt talking about this and probably never will.

For me the long-term bottom line is: a lot more attention to real education which breeds analytical, creativy, innovative people and a better spread / volume of value added work opportunites which ultimately means that a much larger percentage of all Thais have a good quality of life through their own productivity. I don't see pt talking about any elements of this - just lots of unaffordable goodies.

Productivity to my mind is essentially a bi product of the way employees are managed, educated and trained. Are we blaming political parties for the lack of effort to develop employees? Perhaps if business is educated to accept their staff as something more than a cheap expendable resource, they may take on the role of development more readily. Many of the major corporates have these type of development programs in place......perhaps a contributor to their global success.

Quite true that productivity is very important, and resources invested wisely to generate productivity and quality gains is one way to possibly be ahead of your competition, but the clever competitor is always lurking to steal your customers, perhaps by price or perhaps by other clever marketing activities.

But it's also the responsibility of government to take care of the various foundations.

Edited July 16, 2011 by scorecard

[warfie]

To fund this program maybe they can try to resell on ebay the wonderful explosives detectors they bought for the army....and which are useless, or maybe reduce the army budget....oh no sure the last one is impossible

and the aircraft carrier=submarines=if half the corruption was stopped they could have 600 bht min wage

Don't forget the blimps...

[ableguy]

Minimum wages are not upheld now and nobody to enforce it. Burmeses and Cambodians will work and do from 75 baht a day up the lucky ones getting around 170 baht a day in Bkk, guess they will be in demand .