New Thai Govt's Populist Policies 'May Hit Growth Of Businesses'

[webfact]

NEW GOVERNMENT

Populist policies 'may hit growth of businesses'

By Petchanet Pratruangkrai

The Nation

Key elements of the incoming government's populist policies, particularly the planned increase in the minimum wage and heavy subsidies, are a major concern for companies, as they fear the measures will slow the business sector down over the remainder of the year and during 2012.

After brainstorming with government agencies yesterday about the economic focus in the second half of the year, the Federation of Thai Industries (FTI) predicts the economy will now grow by between 4.2 per cent and 4.5 per cent this year, against the previous estimate of 3.6 per cent, thanks to the boost provided by the general election.

Meanwhile, the Commerce Ministry's latest report said that inflation could reach 4 per cent this year, above the previous projection of 3.2-3.7 per cent, if the new government decided to increase the daily minimum wage to Bt300 quickly.

The Pheu Thai-led government-in-waiting is expected to spend Bt1.85 trillion on its range of populist policies.

FTI chairman Payungsak Chartsuthipol said the plan to hike incomes and subsidise living costs would destroy the market mechanism and businesses expansion.

To ensure fair treatment for private enterprises and consumers, he called for the government to balance its policy between subsidising goods, fuel and electricity prices and allowing labour-cost adjustment in line with the market mechanism.

Chen Namchairisi, vice chairman of the federation, said the government should adjust its price-control policy to reflect the real costs of production, as prices have been frozen for too long.

He said many enterprises were concerned about higher production costs, but were stymied by the official price-control regime. This policy imbalance has caused difficulties for business operations.

Moreover, the brainstorming meeting agreed that any wage increase should be in line with the Kingdom's competitors. For instance, the daily minimum wage in China is fixed at Bt277-Bt281 a day, in the Philippines at Bt290, in Indonesia at Bt225 but Bt115-Bt150 in remote areas, and in Vietnam at Bt103. The Vietnamese rate is expected to increase to Bt126 in the near future.

These figures show that manufacturing industries related to exports would be the hardest hit by a rise in the daily minimum wage to Bt300, the FTI said.

FTI vice chairman Thanit Sorat said farm-goods subsidisation, such as the planned re-implementation of the rice-pledging scheme, would also lead to higher production costs for enterprises, particularly those in the food industry.

Other factors causing high concern among businessmen include strong inflation growth and the rising policy interest rate.

The FTI forecasts that inflation this year will come in at 4.2-4.5 per cent, with prices in the first half having risen 3.58 per cent as a result of increased food prices.

Meanwhile, the federation expects the policy interest rate to reach 3.75 per cent by year-end, from 3.25 per cent currently. It projects exports will rise by 22 per cent to US$230 billion (Bt6.84 trillion) this year.

A senior source at the Commerce Ministry said yesterday that any wage hikes would be a major driver of inflation this year. However, the new government plans to reduce fuel subsidies, which would lower inflation by 0.5-0.6 of a percentage point.

"Hiking wages would mark up the costs of production and lead to higher goods prices. However, the ministry will try to lower the cost of living by arranging low-price fairs and calling on enterprises to maintain retail prices of goods," said the source.

To alleviate the higher cost of living, Internal Trade Department director-general Vatchari Vimooktayon will request an additional budget of Bt800 million to organise cheap-price fairs nationwide over the rest of the year.

-- The Nation 2011-07-27

[drdoom6996]

Providing these policies are put into effect, I predict inflation and unemployment.

[parmo1]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

[DanR]

^ Maybe but

"FTI chairman Payungsak Chartsuthipol said the plan to hike incomes and subsidise living costs would destroy the market mechanism"

and the market is the alter these people pray at, there being no sacrilege more outrageous than placing fetters on it.

[tragickingdom]

Hear the elite starting to cry crocodile tears already. If even the yellow shirt sponsors CP admit that a raise in the minim wage is long overdue it means that there is money enough to raise the minimum wage to 300 baht or 10 US a day. The Chinese minimum wage is already higher. The mean in the big Mercedes car always find a reason to keep the little man poor and stupid. No money for iPad's?? I doubt it. A higher educational standard less money for traditional books and paper makes the country more compatible. After all if the army who cannot maintain their planes and helicopters can have money for a tnk division (a present for Prem's birthday and get 36 new helicopters than there is no problem at all.

Cut the military budget to pre coup terms and the money is there. Go after the people and businesses (the elite) who refuse to pay their taxes and there is money enough to I've all farmers a motorcycle too. Policies seem to be populist only when they make the lives of the poor a bit better. Policies are never populist when coup takers get a billion baht each in bonus for disposing an elected government or when an idiot buys a Zeppelin to spy on insurgents, buys armored vehicles which are so hot that they are used as an artificial reef after 5 years or buy an aircraft carrier without planes which western countries finds to expensive.

The bottom-line" Business should not complain and cough up. If the Chinese can do it, Thais must do it. By not increasing minimum wages entrepreneurs are less but inventive. Now there is no need to modernize, when people get more expensive it is good for business and people alike.

[exbelg]

hey, this is thailand after all... less tourists ? lets increasr the price for everything kinda (un)logic...

there is money enough for everybody to live well, except it always ends up in the wrong hands ... aka rice farmes get nearly nothing for their crops while the millers get the big money for the low intensity work

[hellodolly]

hey, this is thailand after all... less tourists ? lets increasr the price for everything kinda (un)logic...

there is money enough for everybody to live well, except it always ends up in the wrong hands ... aka rice farmes get nearly nothing for their crops while the millers get the big money for the low intensity work

Hate to bust your bubble but if the rice farmers got nothing for their work they would not do it.

All you people do is talk.

Show me the cost per ton for the rice farmer to grow it and deliver it to the miller show me the price per ton for the millers.

Show me the price to store it until it is sold.

Give me some thing that makes sense.

And last but more important what about the people who work in the fields why not give them a raise.

If memory serves me right the PT is going to raise the minimum wage in Bangkok and Pattaya. Not exactly huge producers of rice in Thailand.

[dcutman]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Edited July 27, 2011 by dcutman

[parmo1]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist like China, USA

1) Inflation will not "go through the roof" - ridiculous thing to say, it has not in other countries with minimum wages (i.e MOST)

2) Governments in other countries have agencies that monitor "greedy business people", these people must learn that is their interests TOO,

3) I think this is even sillier than point 1, maybe Thais will be able to buy more food ,

IT ALL HAS HAPPENED IN ADVANCED COUNTRIES, THAILAND IS not THE FIRST COUNTRY TO HAVE A MINIMUM WAGE, It is the first steps to stop being a third world country

But the bottom line is there was an election, and a BIG majority voted for a party that they knew would implement a minimum wage. If at the next election the economy has become WORSE, the majority of voters will vote for a NEW party in government. That is DEMOCRACY, Thailand has started on the road to being a more advanced country (at last)

Edited July 27, 2011 by parmo1

[hawker9000]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist. 1) Inflation will not "go through the roof" - ridiculous thing to say, it has not in other countries with minimum wages (i.e MOST), 2) Governments in other countries have agencies that monitor "greedy business people", these people must learn that is their interests TOO, 3) I think this is even sillier than point 1, maybe Thais will be able to buy more food ,

IT ALL HAS HAPPENED IN ADANCED COUNTRIES, THAILAND IS not THE FIRST COUNTRY TO DO THIS, It is the first steps to stop being a third country\

But what it DOES do is drive investment toward cheaper labor in other countries (and always other countries happy to have the jobs). So many failed experiments in central planning. Statists never learn.

Edited July 27, 2011 by hawker9000

[Bkkorupcountry]

Providing these policies are put into effect, I predict inflation and unemployment.

I doubt very much increasing the MINIMUM wage of the most lowly paid workers in the country is going to have any substantial effect on inflation. Generally accepted economic principles state that wage rises are generally inflationary in nature. However, that applies to wage hikes across whole industries and wage levels. Here, we are talking about increasing the minimum wage. The additional "buying power" is a drop in the ocean and unlikely to affect your usual basket of goods used to calculate either CPI or RPI levels.

[livinthailandos]

I enjoy reading comments on issues like this because

1. you always have people who obviously show with their comments they have never runned a business before.

2. Limited parochial view on jobs, economy and business

I love this comment (If the Chinese can do it, Thais must do it. )

First of all comparing chinese people and thai people with wages and business thats a good laugh, Thai's are nothing like their chinese counterparts.

[Bkkorupcountry]

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist. 1) Inflation will not "go through the roof" - ridiculous thing to say, it has not in other countries with minimum wages (i.e MOST), 2) Governments in other countries have agencies that monitor "greedy business people", these people must learn that is their interests TOO, 3) I think this is even sillier than point 1, maybe Thais will be able to buy more food ,

IT ALL HAS HAPPENED IN ADANCED COUNTRIES, THAILAND IS not THE FIRST COUNTRY TO DO THIS, It is the first steps to stop being a third country\

But what it DOES do is drive investment toward cheaper labor in other countries (and always other countries happy to have the jobs). So many failed experiments in central planning. Statists never learn.

All things being equal, it is natural for any investment to flow towards countries with the cheapest labour. However, in business, things are never equal. Investment decisions take into account, inter alia, infrastructure, political stability and skillset of the labour force. You can argue that Thailand comes lowest in all three categories in which case, a minimum wage if not going to matter anyway.

[hellodolly]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist like China, USA

1) Inflation will not "go through the roof" - ridiculous thing to say, it has not in other countries with minimum wages (i.e MOST)

2) Governments in other countries have agencies that monitor "greedy business people", these people must learn that is their interests TOO,

3) I think this is even sillier than point 1, maybe Thais will be able to buy more food ,

IT ALL HAS HAPPENED IN ADVANCED COUNTRIES, THAILAND IS not THE FIRST COUNTRY TO HAVE A MINIMUM WAGE, It is the first steps to stop being a third world country

But the bottom line is there was an election, and a BIG majority voted for a party that they knew would implement a minimum wage. If at the next election the economy has become WORSE, the majority of voters will vote for a NEW party in government. That is DEMOCRACY, Thailand has started on the road to being a more advanced country (at last)

Well you hit the nail on the head with the last paragraph. Kind of it was actually a big minority that voted for the PT.

Now if you can answer me a question.

If all these other countries have raised there minimum wage rate with no repercussions why is the world in such a financial disaster mode? Try to be a little more accurate with the answer than you were with the amount of votes for the PT.

[Bkkorupcountry]

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist like China, USA

1) Inflation will not "go through the roof" - ridiculous thing to say, it has not in other countries with minimum wages (i.e MOST)

2) Governments in other countries have agencies that monitor "greedy business people", these people must learn that is their interests TOO,

3) I think this is even sillier than point 1, maybe Thais will be able to buy more food ,

IT ALL HAS HAPPENED IN ADVANCED COUNTRIES, THAILAND IS not THE FIRST COUNTRY TO HAVE A MINIMUM WAGE, It is the first steps to stop being a third world country

But the bottom line is there was an election, and a BIG majority voted for a party that they knew would implement a minimum wage. If at the next election the economy has become WORSE, the majority of voters will vote for a NEW party in government. That is DEMOCRACY, Thailand has started on the road to being a more advanced country (at last)

Well you hit the nail on the head with the last paragraph. Kind of it was actually a big minority that voted for the PT.

Now if you can answer me a question.

If all these other countries have raised there minimum wage rate with no repercussions why is the world in such a financial disaster mode? Try to be a little more accurate with the answer than you were with the amount of votes for the PT.

So you think the world is in such a financial disaster mode because of the minimum wage rates?

[dcutman]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist like China, USA

1) Inflation will not "go through the roof" - ridiculous thing to say, it has not in other countries with minimum wages (i.e MOST)

2) Governments in other countries have agencies that monitor "greedy business people", these people must learn that is their interests TOO,

3) I think this is even sillier than point 1, maybe Thais will be able to buy more food ,

IT ALL HAS HAPPENED IN ADVANCED COUNTRIES, THAILAND IS not THE FIRST COUNTRY TO HAVE A MINIMUM WAGE, It is the first steps to stop being a third world country

But the bottom line is there was an election, and a BIG majority voted for a party that they knew would implement a minimum wage. If at the next election the economy has become WORSE, the majority of voters will vote for a NEW party in government. That is DEMOCRACY, Thailand has started on the road to being a more advanced country (at last)

Not sure what palnet you are living on. But if you have not noticed. China as your example, inflation is through the roof.

You are trying to tell me that a small buisness, for example, processes chickens, he has 5 employee's, now working for 150 baht a day. tomarrow he now has to pay 300 baht a day. He will not raise the price of his chickens he sells to his customers? Well I guess if my reply was silly, you are a fool.

If you dont think this same buisness man will not hire cheaper, migrant workers to do the same work. You are a fool

Again not sure what planet you live on. But until there is some serious eduction reform in Thailand, it will always be a third world country.

If you are not aware this minimum wage increase is just a politcal stunt to get elected. It is going to be a very expensive painfull stunt in many ways.

[Cnxforever]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

I totally agree with you - big business has been using this excuse to keep the poor down for too long in this country! If people earn more money - they will spend more money - how is this bad for business?

Thailand has for to long based it's business model on cheap labour and exports - it is long overdue that they develop the domestic market - while Thailand will always be a major exporter in the area the additional domestic buying power can only be good for the country.

The only thing that will change is that the elite can not advertise Thailand as a "cheap labour country" anymore and the days of easy money for them are over - that ship has sailed long ago anyway in the meantime there are other countries with even cheaper labour to be exploited!

Remove the "monopolies" the elite has been building for themselves here and allow in real competition and this country will be booming!

Of course the only ones who will suffer is the current elite because - except for a few - they could never compete on fair terms and would disappear.

They know that very well and want things to stay as they are - cheap labour with no rights - the exploiters dream!

Who do they think they are kidding? People who are bombarded with advertising 24 hours a day - earning 200 Baht a day in a country where a lot of items in a supermarket are in the meantime more expensive than in some European countries - will not keep quite anymore because they had enough of seeing all those beautiful things on TV but can't afford them!

It looks like Thaksin (or in public his proxy) has done it again - he has been able to predict his people better than anybody else even though he is part of the elite - I wonder if any of the people who became filthy rich exploiting their fellow Thais ever spent a second to think how anybody could live on 200 Baht a day in this country - I know they don't - they don't give a dam_n!

[whybother]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

You do realise that Thailand already has a minimum wage, don't you?

If people get paid more, but prices also go up, how does that reduce poverty?

Do you think that wage rises won't increase prices?

Edited July 27, 2011 by whybother

[Jingthing]

The majority of working Thais are off the grid as far as being eligible for any minimum wage (think meat stick vendors, etc.). Also, there ALREADY is a minimum wage for workers on the grid (regional differences in the exact amount). This is about raising it. I think it could be raised in a careful way so as to reduce blowback but in the long run Thailand needs to focus on the fundamentals that sustain wealth -- developing the human resources to be more productive relative to regional and global competitors. That's the more serious current and long term problem, Thailand's work force is very low value.

As far as the economic inequality in Thailand, that's very real and government policies to reduce that are very desirable. However the political rhetoric about inequality in Thailand is kind of over the top, considering it isn't exactly that unusual in the world, and it's actually quite a bit worse in other countries, such as the USA.

Edited July 27, 2011 by Jingthing

[DP25]

For instance, the daily minimum wage in China is fixed at Bt277-Bt281 a day, in the Philippines at Bt290, in Indonesia at Bt225 but Bt115-Bt150 in remote areas, and in Vietnam at Bt103. The Vietnamese rate is expected to increase to Bt126 in the near future.

There is no minimum wage in China. It is set by location, and Beijing is the highest at $200 per month, which is about 6000B per month. It is half of that in other places

Same with the Philipines. That salary is only for the capital, outside it goes down as low as 100 Baht per day. Just look at the millions of workers they are forced to send overseas because there are no jobs at home. They don't come to Thailand to work such low wages because there are high paying jobs at home.

[soundman]

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist like China, USA

Umhhh..... Thailand allready has set minimum wages for all provinces.

2010 Minimum Daily Wage

BahtArea206Bangkok and Samut Prakan205Nakorn Pratom, Nonthaburi, Pathum Thani and Samut Sakhon204Phuket184Chonburi and Saraburi181Ayutthaya180Chachoengsao178Rayong173Nakhon Ratchasima, Pang-nga and Ranong171Chiang Mai170Krabi, Prachinburi and Lopburi169Kanchanaburi168Petchaburi167Chantaburi and Ratchaburi165Singhaburi and Angthong164Prachaub Khiri Khan163Loei, Samut Songcram and Sa Kaeo162Trang161Songkhla160Chumporn, Trat, Nakhon Nayok, Narathiwat, Yala, Lamphun and Ubon Ratchatani159Nakhon Si Thammarat, Pattani, Pattalung, Satun,Surat Tthani, Nong Khai and Udon Thani158Kamphaeng Phet, Chai Nnat, Nakhon Sawan, Suphanburi and Uthai Thani157Kalasin, Khon Kaen, Chaing Rai, Buri Ram, Yasothon, Roi-et and Sakhon Nakhon156Chaiyaphum, Lampang and Nong Bua Lamphoo155Nakhon Phanom, Phetchabun, Mukgdahan and Amnat Charoen154Maha Sarakham153Tak, Phitsanulok, Sukothai, Surin and Uttraradit152Nan and Si Saket151Payao, Pichit, Phrae and Mae Hong Son

[dcutman]

Look what happens in this country when there is a drastic disruption form the norm. Take palm oil or the rice shortage of 2008. Both manufactured. The priceses doubled for both almost overnight, and the effects down the lne were a disaster. Both of witch the residual price increases have never come down. to what they were, even though there is a glut now.

Now blast a wage increase of 40 to 90% at this country. If the above had that effect, I can immagine this will have a similar effect. Thailand just cannot deal with these sort of changes. As a poster before tried to convey, that other advanced countries go through these same issues, the only difference is, this is not an advanced country and buisnesses here do not opperate on the same margins that can absorb these things and gradually increase prices, as they do in advanced countries. Here or some place else when prices of one thing rise, something rises rite behind it, its all inflation.

[DP25]

Go after the people and businesses (the elite) who refuse to pay their taxes and there is money enough

I'm sure the new government will get right on that one

Lowering the corporate income tax from 30% to 20% is a great start on finally getting those rich elites to pay their fair share!

[Jingthing]

People falsely label the PTP/Thaksinista party as a left wing, progressive party. If that was actually true where is their plan for increased progressive taxation that a real left wing party would normally favor? (Tax the richer at much higher rates, institute REAL ESTATE taxes, etc.). Instead what PTP will do as is their stated policy -- sharply CUT corporate tax rates. That's right wing, not left wing. Abhisit did openly favor a much needed tax reform -- REAL ESTATE taxes, but it turns out his own party vetoed it. But it was at least a start that Thailand had a leader who knew it was necessary. Why is this not a PTP policy? Because PTP is just another party serving their own elites and especially Thaksin, that would hurt Thaksin's family and rich cronies.

Edited July 27, 2011 by Jingthing

[Bkkorupcountry]

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

Not sure how you can say there is going to be a HUGE reduction in poverty.

1 if this wage hike hits all at once, the inflation will go through the roof. There will be no extra buying power.

2 Thai buisiness people are one of the greediest on the planet. They will either reduce staff, hire migrant workers, or more than likley just threaten current employees,, shut up, the pay stays the same.

3 Even if the typical Thai did get a big boost in wages, They would just blow it any way and be no better than before. In fact I would bet, millions have already went out and financed a new cell phone or motor cycle thinking about all the extra money they will have in there pocket now.

Silly silly reply, as i said before, minimum wages are in most countries even the most capitalist like China, USA

1) Inflation will not "go through the roof" - ridiculous thing to say, it has not in other countries with minimum wages (i.e MOST)

2) Governments in other countries have agencies that monitor "greedy business people", these people must learn that is their interests TOO,

3) I think this is even sillier than point 1, maybe Thais will be able to buy more food ,

IT ALL HAS HAPPENED IN ADVANCED COUNTRIES, THAILAND IS not THE FIRST COUNTRY TO HAVE A MINIMUM WAGE, It is the first steps to stop being a third world country

But the bottom line is there was an election, and a BIG majority voted for a party that they knew would implement a minimum wage. If at the next election the economy has become WORSE, the majority of voters will vote for a NEW party in government. That is DEMOCRACY, Thailand has started on the road to being a more advanced country (at last)

Not sure what palnet you are living on. But if you have not noticed. China as your example, inflation is through the roof.

You are trying to tell me that a small buisness, for example, processes chickens, he has 5 employee's, now working for 150 baht a day. tomarrow he now has to pay 300 baht a day. He will not raise the price of his chickens he sells to his customers? Well I guess if my reply was silly, you are a fool.

If you dont think this same buisness man will not hire cheaper, migrant workers to do the same work. You are a fool

Again not sure what planet you live on. But until there is some serious eduction reform in Thailand, it will always be a third world country.

If you are not aware this minimum wage increase is just a politcal stunt to get elected. It is going to be a very expensive painfull stunt in many ways.

Inflation in China is being driven by high demand (though not as a result of high wages) and high oil prices.

Taking the case of the "chicken man" is a bit too simplistic as many other factors come into play, such as market competition.

I agree that the minimum wage increase is a political stunt and a very clever one at that. It won't be expensive for the country as the chances of enforcement are very low. Unlike some other countries, there aren't any trade unions battling for the worker to ensure that this is adhered to. What will merely happen is that the local employer will just give an ultimatum to his workers - eg, accept my offer of Bht 200 a day or look elsewhere for a job. The ones having to actually pay this minimum wage will be the foreign companies who are based here to take advantage of the cheap labour costs - such as car manufacturing companies. Possibly the prices for the cars will then increase but as the majority are being exported, the price increase is borne by the foreign buyer and therefore not translated into higher prices here in Thailand. I just realised what an astute business man Thaksin actually is.

[hardy1943]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

I totally agree with you - big business has been using this excuse to keep the poor down for too long in this country! If people earn more money - they will spend more money - how is this bad for business?

Thailand has for to long based it's business model on cheap labour and exports - it is long overdue that they develop the domestic market - while Thailand will always be a major exporter in the area the additional domestic buying power can only be good for the country.

The only thing that will change is that the elite can not advertise Thailand as a "cheap labour country" anymore and the days of easy money for them are over - that ship has sailed long ago anyway in the meantime there are other countries with even cheaper labour to be exploited!

Remove the "monopolies" the elite has been building for themselves here and allow in real competition and this country will be booming!

Of course the only ones who will suffer is the current elite because - except for a few - they could never compete on fair terms and would disappear.

They know that very well and want things to stay as they are - cheap labour with no rights - the exploiters dream!

Who do they think they are kidding? People who are bombarded with advertising 24 hours a day - earning 200 Baht a day in a country where a lot of items in a supermarket are in the meantime more expensive than in some European countries - will not keep quite anymore because they had enough of seeing all those beautiful things on TV but can't afford them!

It looks like Thaksin (or in public his proxy) has done it again - he has been able to predict his people better than anybody else even though he is part of the elite - I wonder if any of the people who became filthy rich exploiting their fellow Thais ever spent a second to think how anybody could live on 200 Baht a day in this country - I know they don't - they don't give a dam_n!

You know what? The filthy rich are not crying either the Thai Set has been at highs today we have not seen for over 12 years. I am very sure they will still make plenty of profits having to pay the poor 300 Bath a day.

[whatsupdoc]

Be careful what you wish for... Due to the global economic crisis most businesses in Thailand are already suffering. For those who think that the businesses make a lot of money (especially SME's); just look around how many already have folded the last couple of years.

So if the minimum wages increases 40-90%, those businesses will have to put their prices up. I expect a lot of price increases in just about every type of business, but especially those providing basic stuff like food and clothing.

A crisis in the making, and one that can be avoided by increasing the wages gradually.

[tlansford]

Well, the article spurred some interesting comments on minimum wages and economics.

...

However, the real objective (of the article) is fear-mongering from the FTI business lobby to slow-down or prevent any change *perceived as detrimental to business interests* , albeit this article is quite tame compared to the norm in the USA.

So who out there feels that the minimum wage will start to change before the end of this year, or will it be next year, or will it be "never"??

[AA1]

I live up in Isan where the majority of farmers can only grow 1 crop of rice a year. They only have an existance living but no more. The sale price of rice from farmers to millers during this year has been lower than last year. They do need labour help from neighbours during planting and harveting BUT if they have to pay about double the present labour costs compared to now, then virtually NO profit at all. Yes. Farms are too small but even if larger it would be very difficult to make an adequate living, especially if the purchase cost is taken into consideration, to make a reasonable living. Many of the younger workers now work in Bangkok or similar places leaving fewer people to work on the land. Increasing the minimum wage up here will do no good at all. What is needed is for better education and infrastructure up here to encourage businesses to open factories etc. up here otherwise when the older generation die off I can see much of it becoming forest again - Maybe that's the answer!! Doubling the wage up here is not the answer unless to speed the process.

[kuffki]

Providing these policies are put into effect, I predict inflation and unemployment.

Maybe ...... but there will also be a HUGE HUGE reduction in poverty too.

Thailand is NOT the first country to have a minimum wage , you know, the greedy oligarchs have been screwing Thai people for hundreds of years now, general wealth and progress of society started in the west after such people were stopped from exploiting the VAST majority

The ONLY reason why Thailand is where it is now IS because of the low wages.Put up the wages and see what happens to all foreign investors, giant manufactures and tourism.

Of course after brain storming they will predict growth, did anyone else expect they will forecast total economy crash and higher unemployment.

I seriously doubt that the new government will ever admit that their election policy's were probably the worst idea ever for the economy, but best ides to get the votes