Wage Rises Could Cost Bt100 Bn In Foreign Direct Investment (FDI)

[YellowFeverCAD]

Where in the world is the minimum wage enough for a luxurious lifestyle? Nowhere, but it should be enough for basic living and in most parts of Thailand it is.

An increase in Phayao from 159 baht to 300 baht - you call that a small increase? I would guess that most law-abiding businesses there would go bankrupt.

I do run a business myself with about 10 employees and a drastic increase in the wages would force me to put he prices up, reduce the employee's other benefits and might put me out of business altogether. Many small businesses where I live (Chiang Mai) have folded already, this wage increase proposal, if put into action, is going to kill many more.

I think you will find that most of the posters on this forum talking about how raising the minimum wage to 300b is a good and needed thing don't own businesses or don't have many employees. They have no clue what that would do to many businesses I would 100% have to lay off staff if I was forced to suddenly pay everyone 300 b a day.

You also are quite right I have quite a number of staff that are working for 275 a day which is still above minimum wage in BKK and they live quite happily. Now of course the posters here in TV know better and those people should be unhappy because they are being taken advantage of by me the big bad farang slave worker, but oddly enough our employees don't feel that way at all. Many of them ask if we can hire their family members and most of our employees have been with us for a long long time..

But it's ok lets just listen to the know it all posters that are sure a jump of such epic size would do no harm and would in fact make things better... *geesh*

[tlansford]

Do you have any idea as to what the cost of living is for many workers on Phuket? In higher paying Phuket that works out to about 5500 baht per month. My friend lives in a small room outside of Patong. He pays 5000 baht/month. Its basic. A cheap meal on the street goes for 40-60 baht now. If he cut corners, he could probably survive food wise at 100 baht/day which is approx. 3000 baht/month. Sure, if he lived on processed noodles and processed pig entrails it might be a little less, but some people do not want to eat garbage. That puts his starting costs per month at 8000 baht and he hasn't even paid for electricity or water or work clothes.

GK, please stop being so ignorant or trying to pretend that everyone is somehow 'entitled' to live like a western social welfare check person.

Most people earning lower salaries live several people together. Many even cook and eat together. Imagine that. Even I did that is a young person. And we saved a lot of money that way.

Not everyone can own a house or own a car. Notions like that is what caused the government-introduced housing-market collapse in the US.

GK makes some good points... Certainly the Thai people I know also do what you suggest because they have to, absolutely, in order to make ends meet. But that does not invalidate GK's position at all. Rather, I feel it tends to reinforce it.

Tom

[warfie]

Thai unemployment is currently 0.5% of the workforce (source: http://www.tradingec...employment-rate) - one of the lowest in the world.

Lord knows what a time and motion study would show.

Perhaps that 0.5% of the workforce is actually doing any work?

[whatsupdoc]

There are several false assumptions being raised in this discussion.

Yes, there are many Burmese workers in Thailand. The assumption is made that they are being paid minimum wage and that employers are complying with health and safety codes or labour standards This s wrong. I think it is quite obvious that many are working under illegal labour conditions. Increasing the minimum wage will not impact the companies and industries that hire these people because they will continue to break the law until the labour department stops the activity. These Burmese workers will continue to be exploited by Thais.

It is much easier for an employer to use Burmese workers when those workers are hidden from view. However, there is no way retail chains, the service sector and large factories are going to be able to replace Thai workers with Burmese labour. The Thai people would object and these businesses would have serious blowback.

The assumption that the tourist industry and large factories will suffer is misleading. Many of the larger hospitality chains and factories already pay wages or offer benefits that exceed the proposed minimums. The wage changes won't have much of an impact. on them Yes, some smaller operations might have problems, but these are marginal operations and it is time they were given a kick in the pants to improve efficiency. These are the companies that are usually non compliant with the basic labour codes anyway.

One of the big complaints made about NAFTA was that jobs would be sucked out of Canada and the USA and end up in the Mexico. On the contrary, it forced many companies to invest in improved labour and production efficiency. It also caused wages to increase and labour conditions to improve in Mexico. The end result was that while some sectors lost jobs, others gained jobs and new opportunities. A small wage increase in Thailand will eventually be followed by wage increases in the region. It is happening in China now. China has started moving away from labour intensive industries to skill based industries. Vietnam wants to go upmarket, not become sweat shop central.

You may think me cold and uncaring when I write that it would be a good thing for some of the marginal companies to close shop. The benefit though would be that the companies that are efficient and well managed would do better as companies that were most likely to compete unfairly because they were in non compliance with basic health and safety, environmental protection or labour codes closed. The Ford and Toyota manufacturing facilities have invested heavily in training their labour force and in being good corporate citizens, at least better than the companies that illegally dump their toxic waste or that do not invest in staff training. Ford and Toyota will not suffer and they wlll not move their jobs.

In all of the arguments given to say the wage increase will damage Thailand, there have not been any specific examples cited. Yes, someone says his factory will be forced to layoff some workers. Ok, but what does it really mean? Does it mean that the factory relied on brute labour over efficiencies in production? Does it mean that the production goals would have been met with fewer workers anyway and the employer was being charitable by keeping the workers? I don't think so. The shakeout of some marginal operations would benefit the health of the national economy because those companies that had invested in their labour forces and that were well managed would expand to take up slack in the supply of services or goods.

I think it is time that the government measures to force down wages and to indirectly subsidize inefficient industries must end if Thailand is to move forward. Some companies will suffer, but those companies that are well managed and well capitalized to invest in the future will prosper.

"However, there is no way retail chains, the service sector and large factories are going to be able to replace Thai workers with Burmese labour" That is correct, but do you consider these all 'marginal' companies that better close shop? Is Tesco Lotus marginal, are hotels, are restaurants, gas stations? In my opinion it will be established businesses that have to play by the rules that will be affected most.

An average 75% minimum wage hike (small increase as you choose to call it.....) will result in higher prices and/or lay offs, no doubt about that.

It would be interesting to know the average wage in Phayao and other provinces. That would shed a clear light on how realistic the 300 baht minimum wage is. I would guess the average wage hardly exceeds 300 baht (if at all) in many of the poorer provinces.

[geriatrickid]

Do you have any idea as to what the cost of living is for many workers on Phuket? In higher paying Phuket that works out to about 5500 baht per month. My friend lives in a small room outside of Patong. He pays 5000 baht/month. Its basic. A cheap meal on the street goes for 40-60 baht now. If he cut corners, he could probably survive food wise at 100 baht/day which is approx. 3000 baht/month. Sure, if he lived on processed noodles and processed pig entrails it might be a little less, but some people do not want to eat garbage. That puts his starting costs per month at 8000 baht and he hasn't even paid for electricity or water or work clothes.

GK, please stop being so ignorant or trying to pretend that everyone is somehow 'entitled' to live like a western social welfare check person.

Most people earning lower salaries live several people together. Many even cook and eat together. Imagine that. Even I did that is a young person. And we saved a lot of money that way.

Not everyone can own a house or own a car. Notions like that is what caused the government-introduced housing-market collapse in the US.

It is unfortunate that you left off my first paragraph, Perhaps it was intentional as you are in agreement with my point.

I wrote;

These people may be in possession of a motorcycle or a home, but the mimimum wage class often do not own those things. Those material possessions are financed and the people live in debt waiting for the house of cards to collapse. No one at a minimum wage job can ever hope to save enough to own a home or motorcycle outright. They can however, live in a building crammed with family members with limited privacy.

Your response is more appropriate to my paragraph and not the section pulled out of context. . I do not believe it is a plea for living like a "social welfare check person" as you put it. Sharing living accomodations is a transition stage for young people and they can deal with 3 or 4 people in close quarters. However, when you have 3, 4, 5 or 6 adult Thais obliged to live in close quarters it creates social problems. Maybe you don't mind the loss of privacy. Maybe you don't mind hearing two people fornicating, but I can tell you that almost no one wants to live like that. My friend when he was between jobs had to move in with friends. They were 4 people living in one room. The guy, his ex g/f her new b/f and their child. Do you think that was a healthy living situation for grown adults? You may consider it fun, but these people did not. It is a contributing factor to domestic violence, child abuse, disease and why some people turn to alcohol and drugs to cope. Home ownership is what many people strive for. If not ownership, a place to call one's own where one has privacy and is not forced to hear other people's snoring or smell their gas or hear a baby crying at 3 am. Have you ever asked these people what they want? They want a chance at making a better life for themselves. Thais can look happy on the outside because they are adept at coping. Unfortunately, Thais are humans and at some point they snap.

Tawp, I though you were a Libertarian. How then can you argue in favour of a government system that forced wages down? You do realize that the minimum wage laws in Thailand have not functioned as a means of helping workers but of artifically depressing wages as an indirect advantage to the employers that relied upon heavy labour industries. If you are a Libertarian, then surely you must be in favour of freeing up the Thai labour market. That also entails a stop to the illegal labour market. t\There are currently an estimated 2 million plus Burmese migrant workers in Thailand, of which only 1.5million are considered legal. Think about it. If Thailand enforced the current basic labour code, perhaps 1 million Burmese workers would be gone. Think about the impact on wages such a shortfall would have.

[Thai at Heart]

Many of the jobs paying minimum wage are jobs that Thais won't do anyway. I recently visited a factory in eastern Thailand where they'd gone to the trouble of bringing Burmese workers all the way in because they are prepared to do the work, work hard, and do the overtime to make extra money.

I think the 15,000 minimum wage for graduates would have a much bigger effect -- driving up the graduate unemployment rate very rapidly.

It would be interesting to know if they were paying the stated Thai minimum wage. In many cases companies do not, but this doesn't mean that all don't.

[Nacho]

Thank you for your effort at the perpetuation of the myth that minimum wage allows for a quality standard of life. These people may be in possession of a motorcycle or a home, but the mimimum wage class often do not own those things. Those material possessions are financed and the people live in debt waiting for the house of cards to collapse. No one at a minimum wage job can ever hope to save enough to own a home or motorcycle outright. They can however, live in a building crammed with family members with limited privacy.

Do you know what the minimum wage in Thailand is? The minimum wage ranges from 159 baht a day in Phayao to 221 baht in Phuket for a national average of 175 baht.

Do you have any idea as to what the cost of living is for many workers on Phuket? In higher paying Phuket that works out to about 5500 baht per month. My friend lives in a small room outside of Patong. He pays 5000 baht/month. Its basic. A cheap meal on the street goes for 40-60 baht now. If he cut corners, he could probably survive food wise at 100 baht/day which is approx. 3000 baht/month. Sure, if he lived on processed noodles and processed pig entrails it might be a little less, but some people do not want to eat garbage. That puts his starting costs per month at 8000 baht and he hasn't even paid for electricity or water or work clothes. Let's say he keeps all those other basic costs at 2000 baht per month, which means he dresses like a hobo and gets crap from his employer for looking like a Pattaya expat, altogether that puts him at 10,000 baht in basic living expenses per month. This would mean no healthcare insurance, no covering of costs for his motorbike, nothing else. One of the minimum wage girls I am aquainted with works at a typical tourist spot and lives in a similar room, except shecrams in her minimum wage boyfriend and her 1 son from a previous marriage. Combined income is better, but in her case she has to pay the expenses of a growing boy. School uniforms, school supplies and fees add up. They live in one <deleted> room smaller than my salon

Please don't tell me that people have more than a marginal existence on minimum wage in Thailand. The labour market is not free and wage costs have been artificially forced down. Any free market capitalist would understand that wages would have risen long ago as the available labour force shrunk. However, the government and the oligarchy have acted to keep wages low. Basically, the arguments for the status quo are the arguments that support the continued totalitarian interference in the labour market and this brings to mind the repressive Soviet state era where central economic planners forced down wages. Part of the capitalist equation is to accept that labour has the freedom to shiftt. Keep in mind that many of the government's economic policies indirectly subsidize the merchant class and service industry in Thailand. Tax policy, and infrastructure investment is not made with the needs of the minimum wage earner in mind.

The argument that somehow a small increase in minimum wage will force companies to relocate is weak. No hard evidence has been given to support the argument. What one has are projections based upon the same flawed thinking that was used to justify the government's interference in the labour market to keep wages low. An increase in worker income will fuel consumer spending and allow the workers some breathing room. A small increase in wages allows the wages to move in the direction of where they should be. I would like to see the people arguing against the wage increase try to live a month on a minimum wage income.

I would tend to agree with you to a certain extent, that the minimum wage does need to go up. However I think you are missing the bigger picture. Most people don't stay minimum wage earners their entire lives. They start their working lives out as minimum wage earners and as they gain experience / training / education they become more employable and can start to demand higher wages.

By increasing the minimum wage so much so quickly as proposed could very well put many of the small / medium businesses out of business, as their profit margins are already small. The big business experienced employees will start to demand higher wages because why should they work for the same wage as an unexperienced employee, causing massive inflation across the board and making future investment go elsewhere in the region. The only way the inflation could be cushioned is if the rest of South East Asia follows suit.

I could be completely wrong. No one really know for sure how the economy will be affected, but I would think a slow and steady approach where the wage increase is done over time would be much safer, as it could be monitored as to the effects on the economy and adjusted as needed. Putting all your eggs into one basket and hoping for the best isn't the smartest move.

A bit off topic: Where the countries money really needs to be put into is into it's education system, and to try harder to rid the country of it's mass corruption. The company I work for is a medium sized international offshore service company based here in Thailand. They have for years wanted to get out of Thailand and move to Singapore. Obviously not because of wages, but due to the fact that they can hire who they want, and I would assume the corrupt officials would have something to do with it. At the moment there are not many Thais who are qualified to do the jobs that they need, and they are hiring Thais only for the sake of hiring them to stay within the 4 Thais to 1 expat ratio. I have no doubt that the Thais could be trained to do these jobs, however the company has to stay within the international guidelines, and either very few to none of the Thai programs are recognised internationally. Thus making them unqualified.

[geriatrickid]

The comment Most people don't stay minimum wage earners their entire lives is appropriate for western nations, but not in Thailand. there is an entire subset of the wage earring demographic that are longtime minimum wage. Keep in mind that most workplaces in Thailand have no training or advancement programs. It is the rare employer that makes allowances for full time staff to attend university part time. Advancement is not an option at many employers focused on minimum wage employment. Churning of the work force is common. In many workplaces, workers do not qualify for enhanced vacations or benefits until they have worked for a certain period. Some companies will toss workers before they qualify for statutory severance required for longer term employees. The hospitality industry is notorious for laying off workers in low season. One of my friends was employed as a junior accountant at the property holding company of one of the wealthy powerful Thai families on Phuket. Like clockwork, as soon as some workers reached a certain length of employment, their position was eliminated and they had to go find work elsewhere and the clock started ticking again. One of the reasons Thai service quality is so poor is that outside of western based companies, staff are not considered an asset. The criticisms being made in this thread are valid in respect to some western economies, but Thailand has its own peculiarities such as a longer work day, longer work week and paucity of employee benefits.

[whatsupdoc]

The comment Most people don't stay minimum wage earners their entire lives is appropriate for western nations, but not in Thailand. there is an entire subset of the wage earring demographic that are longtime minimum wage. Keep in mind that most workplaces in Thailand have no training or advancement programs. It is the rare employer that makes allowances for full time staff to attend university part time. Advancement is not an option at many employers focused on minimum wage employment. Churning of the work force is common. In many workplaces, workers do not qualify for enhanced vacations or benefits until they have worked for a certain period. Some companies will toss workers before they qualify for statutory severance required for longer term employees. The hospitality industry is notorious for laying off workers in low season. One of my friends was employed as a junior accountant at the property holding company of one of the wealthy powerful Thai families on Phuket. Like clockwork, as soon as some workers reached a certain length of employment, their position was eliminated and they had to go find work elsewhere and the clock started ticking again. One of the reasons Thai service quality is so poor is that outside of western based companies, staff are not considered an asset. The criticisms being made in this thread are valid in respect to some western economies, but Thailand has its own peculiarities such as a longer work day, longer work week and paucity of employee benefits.

Those companies you talk about are not going to pay the newly proposed minimum wage anyway. They'll find ways to avoid it.

If you keep referring to Phuket (high prices indeed) and/or unethical employers you really have no eye for the big picture; which is what will happen to many small and medium businesses upcountry that do play by the rules.

For Phuket, and to a lesser extend Bangkok, the increase in minimum wages is not that dramatic because the percentage of the increase is lower and there are many more higher paying jobs available. The impact in the poorer areas of Thailand is a different story.

I am not against raising the minimum wage, but it should be done gradually without (hyper)inflation and driving SME's out of business.

[Nacho]

The comment Most people don't stay minimum wage earners their entire lives is appropriate for western nations, but not in Thailand. there is an entire subset of the wage earring demographic that are longtime minimum wage. Keep in mind that most workplaces in Thailand have no training or advancement programs. It is the rare employer that makes allowances for full time staff to attend university part time. Advancement is not an option at many employers focused on minimum wage employment. Churning of the work force is common. In many workplaces, workers do not qualify for enhanced vacations or benefits until they have worked for a certain period. Some companies will toss workers before they qualify for statutory severance required for longer term employees. The hospitality industry is notorious for laying off workers in low season. One of my friends was employed as a junior accountant at the property holding company of one of the wealthy powerful Thai families on Phuket. Like clockwork, as soon as some workers reached a certain length of employment, their position was eliminated and they had to go find work elsewhere and the clock started ticking again. One of the reasons Thai service quality is so poor is that outside of western based companies, staff are not considered an asset. The criticisms being made in this thread are valid in respect to some western economies, but Thailand has its own peculiarities such as a longer work day, longer work week and paucity of employee benefits.

I would have to argue your point. However I can only go off what I see from my Thai relatives. My wife's sister and her husband have both received promotions in their jobs this year (maybe it's their first one, I'm not too sure), have both been working for their companies for quite a few years now, and both have only a high school education. Her brother who is an engineer was upset with his wage a few years back and was considering moving on to another company, thinking that they wouldn't give him a wage increase. However being fed up, he asked for an increase before moving on and received an extra 2000 baht a day. So I don't see it being that different than in the west. Companies don't like to spend more money if they don't have to, but if they feel you are valuable and don't want to lose you they are willing to pay. But I can only speak from what I see around me. Maybe they are only working for more honest companies, or they are just more motivated than others.

I still stand firm that a gradual minimum wage increase is far better than all at once due to my points in the previous post. Your points on the longer work day, work week, and benefits are quite good, and I think creating laws to adjust them rather than a drastic minimum wage increase would be much better for peoples quality of living, than to take the risk of the massive inflation that the 300 Baht minimum wage all at once could possibly cause. 300 a day would definatelly increase quality of life, but if inflation goes up they are in the exact same or possibly worse situation than they are in now. And if what you say is true, and I don't doubt it that some companies are getting rid of employees at a certain length of employment so they don't qualify for severance, it would be a good policy to implement that makes employers more liable for their actions.

I don't know I just don't like how the 300 baht a day is such a risky poor thought out policy when there are so many other viable options that would increase standard of living without the possible drastic blow back effects. But I guess thats what populist policies get you.

[Fuzail]

Well said They are destroying economy by them self as pushing out Foreign companies and creating hell problems for them, making ease to Foreigners will make their country well developed that no one understands, Investment platform will develop only if they let the foreigners do their work peacefully.

[Chopperboy]

And the fact is not mentioned that the Thai overlords who run the factories where the foreigners would invest would simply hire more cheap laborers from Burma and elsewhere if the minimum wage went up.

I'm often amazed at how many Burmese workers there are who are doing jobs that obviously should be done by Thais.

I tend to agree with you. It has become far too easy for employers to bring in cheap foreign labour, and I believe it is not because they can't find Thais to work for minimum wage, but simple profiteering. This needs to change.

And of course it is the Thai business owners doing this, the farang 49% owners can't do this because their Thai competitors would drop a dime on them for doing so.

A company can legally employ Burmese so long as they apply for a QUOTA and the workers have immigrant ID or the new passport work permit scheme. The reason employers take them on is because they are 1) willing to do that type of work, 2) harder working, 3) more self-managing, 4) and more reliable.

They may not be any cheaper...

[TAWP]

It is unfortunate that you left off my first paragraph, Perhaps it was intentional as you are in agreement with my point.

I wrote;

These people may be in possession of a motorcycle or a home, but the mimimum wage class often do not own those things. Those material possessions are financed and the people live in debt waiting for the house of cards to collapse. No one at a minimum wage job can ever hope to save enough to own a home or motorcycle outright. They can however, live in a building crammed with family members with limited privacy.

Your response is more appropriate to my paragraph and not the section pulled out of context. . I do not believe it is a plea for living like a "social welfare check person" as you put it. Sharing living accomodations is a transition stage for young people and they can deal with 3 or 4 people in close quarters. However, when you have 3, 4, 5 or 6 adult Thais obliged to live in close quarters it creates social problems. Maybe you don't mind the loss of privacy. Maybe you don't mind hearing two people fornicating, but I can tell you that almost no one wants to live like that. My friend when he was between jobs had to move in with friends. They were 4 people living in one room. The guy, his ex g/f her new b/f and their child. Do you think that was a healthy living situation for grown adults? You may consider it fun, but these people did not. It is a contributing factor to domestic violence, child abuse, disease and why some people turn to alcohol and drugs to cope. Home ownership is what many people strive for. If not ownership, a place to call one's own where one has privacy and is not forced to hear other people's snoring or smell their gas or hear a baby crying at 3 am. Have you ever asked these people what they want? They want a chance at making a better life for themselves. Thais can look happy on the outside because they are adept at coping. Unfortunately, Thais are humans and at some point they snap.

Tawp, I though you were a Libertarian. How then can you argue in favour of a government system that forced wages down? You do realize that the minimum wage laws in Thailand have not functioned as a means of helping workers but of artifically depressing wages as an indirect advantage to the employers that relied upon heavy labour industries. If you are a Libertarian, then surely you must be in favour of freeing up the Thai labour market. That also entails a stop to the illegal labour market. t\There are currently an estimated 2 million plus Burmese migrant workers in Thailand, of which only 1.5million are considered legal. Think about it. If Thailand enforced the current basic labour code, perhaps 1 million Burmese workers would be gone. Think about the impact on wages such a shortfall would have.

*sigh*

You write:

Maybe you don't mind hearing two people fornicating, but I can tell you that almost no one wants to live like that.

So everyone is entitled to their own house? (The above given problem exists in rented single-family apartments too.)

Then you write:

Tawp, I though you were a Libertarian. How then can you argue in favour of a government system that forced wages down?

I am not in favour of a government intrusion into the market place to artificially force salaries down. Hence why I am against the notion of 'minimum wage' at all, as outline before. It becomes the 'bar to aim downwards to' for business and someone that is hired at this amount rarely goes above it or the later small enforced increase. This is the result from the minimum wage in the US for instance.

So how do I argue in favor of the government intrusion into the market place? I am doing the opposite!

Or is this another of of your strawman attacks?

[Steely Dan]

The 'logic' behind a minimum wage is full of holes it's difficult to know where to start. First let's say for the sake of argument minimum wages go from 250 to 300 baht, around a 17% rise. Does productivity also rise by 17%? What of those earning just above the new minimum? They will want a rise for sure to maintain 'differentials' as many UK trade unions would argue. The net cost to management is not offset by productivity gains and multi-nationals will consider moving elsewhere if they can find cheaper labour elsewhere. Then there is blowback in the form of increased inflation as retail puts up the price of goods, which in turn blows a hole in exports weakening the currency. You also get increased unemployment, which may be offset by employment elsewhere, but likely some other geographic area. A better solution would be to invest in education to increase productivity. If you need to increase taxes make the tax system more progressive taxing the rich more, otherwise any gains in the short term for those at subsistence levels will be but a mirage.

But then again the fact this is a zero sum game would not occur to those with an event horizon no greater than 500 baht at polling day and more spending coupons which don't go as far as the old ones did.

[Crushdepth]

If a minimum wage exists twelve months from now it will be on paper only. There is no practical enforcement mechanism and observing the law and isn't very high on the agenda. The GeriatricKid might want to think about that next time he advocates flouting electoral law.

[pastitche]

A legally operating business, currently paying minimum wage to at least some of their employees when faced with a significant increase in the cost of labor can do one of a few things...

1) They can just pay the increase - assuming they have the excess profit just flowing in or laying around that enables them to "just pay it". (If you think many businesses can or will make this decision, you are not living in the real world.)

2) They can pay the increase by increasing price to their customers... but they will be thinking, how much can I increase price and not lose business? Can I increase at all?

3) They can fire some workers, outsource that labor to contract workers or send it to other countries. This is an easy decision for many minimum wage jobs (office cleaning, grounds maintenance, certain unskilled assembly, etc.)

4) They can become "illegal" and pay some workers "off the books" or find some other way around the increase in their labor costs. Many workers when faced with no job or a job "off the books" will welcome this option.

There are a few variations and combinations of these actions and probably a few more things but you get the idea. So what do you think businesses will do? Who really benefits in the end by each one of these decisions? Is the worker better off? Are ALL workers better off? Who is really better off with an increase in minimum wage?

If a 33% increase in the minimum wage is good from 200 to 300 baht per day is good, then why wouldn't 400 baht per day be even better? 500? 600?

You really believe that you can you can outsource office cleaning and ground maintenance to other countries?

[Crushdepth]

A legally operating business, currently paying minimum wage to at least some of their employees when faced with a significant increase in the cost of labor can do one of a few things...

1) They can just pay the increase - assuming they have the excess profit just flowing in or laying around that enables them to "just pay it". (If you think many businesses can or will make this decision, you are not living in the real world.)

2) They can pay the increase by increasing price to their customers... but they will be thinking, how much can I increase price and not lose business? Can I increase at all?

3) They can fire some workers, outsource that labor to contract workers or send it to other countries. This is an easy decision for many minimum wage jobs (office cleaning, grounds maintenance, certain unskilled assembly, etc.)

4) They can become "illegal" and pay some workers "off the books" or find some other way around the increase in their labor costs. Many workers when faced with no job or a job "off the books" will welcome this option.

There are a few variations and combinations of these actions and probably a few more things but you get the idea. So what do you think businesses will do? Who really benefits in the end by each one of these decisions? Is the worker better off? Are ALL workers better off? Who is really better off with an increase in minimum wage?

If a 33% increase in the minimum wage is good from 200 to 300 baht per day is good, then why wouldn't 400 baht per day be even better? 500? 600?

You really believe that you can you can outsource office cleaning and ground maintenance to other countries?

You can if you hire unofficial Burmese labour.

[patjem]

China is currently experiencing labour unrest as workers demand higher salaries. Vietnam is also facing a move to higher salaries. Companies that have already invested billions in factories cannot just up and leave. Although some sweatshop jobs may indeed go elsewhere, there is an increasing emphasis in the west on fair trade practices, so exploiting workers in a country is not a long term strategy.

Paying the minimum wage is exploiting workers?

A lot of people here just haven't got any idea what typical wages in Thailand are. True, it may not be much in Western eyes but I know quite a lot of Thai making a little more than minimum but they all have quite a decent living standard, own a motorcycle, have a proper place to live etcetera.

Raising the minimum wage by 50-90% in a short time is going to be a disaster. Labour intensive industries and the service industries (like restaurants, hotels) will have the choice to increase prices, lay off employees or close shop. In the end, many of the lowly -paid employees will be worse off due to unemployment and inflation.

Look at the restaurants... the waitering staff are usually busy with their BB' or iPhones, or watching soaps on TV. If they get paid more, maybe the restaurants can expect them to actually work, and then they could use less staff anyway. As a student back home I worked in restaurants- the service levels here are terrible. And there are too many waiters in each restaurant doing too little.

Fair point. I worked in China before I was assigned to China. I'll share my observations: the Chinese staff all genuinely tried hard, as do my Thai staff, after some time of coaching that they ought to have the pride enough to do so. Difference was the Chinese wanted it more, were far more readily willing. Same size operation, the Chinese car park had a total of 4 cars...... car park here is full, all better and more expensive than my own I had back in the UK. The staff here earn more than their Chinese counterparts, but unfortunately, they are inherently much lazier on the whole. Make of it what you will, but that's just my observation.