Minimum Wage Proposal Causing Great Anxiety

[Lite Beer]

EDITORIAL

Minimum wage proposal causing great anxiety

By The Nation

Pheu Thai plan to implement Bt300 a day vow worries business people

Everyone was toeing their camp's line during a roundtable debate on Friday among academics and representatives of employers and the labour movement over the minimum wage controversy. The labour side insisted that Yingluck Shinawatra's promise of a Bt300 daily minimum wage must be enforced on a nationwide basis. Employers, on the other hand, said no, no. Academics, caught in the middle, tried to walk the middle path, saying the current rates were too low but the promised Bt300 was virtually impractical.

What was certain coming out of the Krungthep Turakij debate was that the incoming Yingluck government will be in trouble no matter which party has its way in the end. A triumph for the labour movement could mean a business catastrophe, as warned by various industrial umbrella groups, as well as technocrats from the Commerce Ministry. If employers are to get the Bt300 rate curtailed, it will be at the expense of the Yingluck government's face at least or its stability at most. Backtracking on election pledges used to be no big deal, but certainly not this time.

The academics' camp seemed to take the most sensible stance by calling for some kind of a compromise. The only problem is that the labour movement has already taken the Bt300 minimum wage pledge made by the Pheu Thai Party during the election campaign very seriously. A compromise - whether in terms of reduced rates or selective enforcement of the Bt300 rate - will be difficult to achieve.

In the not-so-remote past, labour activists slashed their arms and used blood to write petitions when campaigning for an increase of just a few baht. The Pheu Thai pledge involves dreaded rises of Bt85 for workers in Bangkok and surrounding areas (who are currently getting Bt215 daily) and as much as Bt141 in the lowest-paid zones (who are being paid Bt159). Nobody knows what measures the labour activists will take this time, when they will have the government on their side and only employers to beat.

Society has also been divided. Many of those who are not business owners find it hard not to support the drastic wage adjustment that, if effectively carried out, would considerably lift the standard of living for a big section of the Thai population. When the poorest workers get Bt300 a day, things can't be too bad.

Or can they? Warnings about runaway inflation, business collapses, mass lay-offs and scared-away investors have been growing louder. In a rare phenomenon, many experts left, right and centre have been proposing wage implementation formulas so that the Yingluck government can both save face and the economy. Everyone knows that if Thaksin Shinawatra promises a populist plan, he will try to deliver it at all costs. Like a knife, that kind of political attitude cuts both ways.

One proposal emerging from Friday's roundtable calls for a parallel system to adjust the minimum wages "scientifically," through updated and realistic economic data. The current Tripartite Wage Committee, which brings together representatives of the government, the labour movement and employers, has been plagued with too much politics and hard bargains that sometimes ignored economic realities. This proposal is easier said than done, as many questions will ensue, not least whether it will reduce the power of or practically end the tripartite system. However, at least this proposal is worth pondering.

Wages have to do with numbers, therefore numerical formulas should not be too hard to accept, as long as they are worked out fairly and scientifically, taking into account all relevant economic indexes. The tripartite committee has always been supposed to consider key economic indexes, but its work could never focus on numbers alone. Labour threats, business greed and the government's political worries often overrode common sense.

The wage issue means would-be prime minister Yingluck will have a brief honeymoon with the Thai public. If the controversial pledge was made after a thorough study with sincerity to up the living standard of Thais, there should not be any worry. That Pheu Thai seems to be backtracking daily suggests that was not the case.

-- The Nation 2011-07-31

[whybother]

Academics, caught in the middle, tried to walk the middle path, saying the current rates were too low but the promised Bt300 was virtually impractical.

I reckon the academics have it right on this one. Raising the minimum wage to 300 baht in one go would be near on impossible for many businesses.

Raising the minimum wage to the same level nation wide would have interesting consequences. On one hand, why would businesses that rely on transport locate themselves in distant provinces. On the other hand, why would workers move to Bangkok or other expensive provinces if they can get the same wage elsewhere without the expense.

[dcutman]

Academics, caught in the middle, tried to walk the middle path, saying the current rates were too low but the promised Bt300 was virtually impractical.

I reckon the academics have it right on this one. Raising the minimum wage to 300 baht in one go would be near on impossible for many businesses.

Raising the minimum wage to the same level nation wide would have interesting consequences. On one hand, why would businesses that rely on transport locate themselves in distant provinces. On the other hand, why would workers move to Bangkok or other expensive provinces if they can get the same wage elsewhere without the expense.

That is for businesses that can move. What about Mom and Pop shops, Hotels, resturants, ect. They are really screwed. On top of that the full promise is 1000 THB by 2020, so technicaly she would need the wages to rise another 132THB by the end of her first term. Yeh I know she would leave that up to the next guy. Just sayin.

[Nisa]

Min. wage needs to be raised but it would cause havoc to the economy to raise it this much in one swoop of the pen. This would be approx. doubling it in many regions in Thailand. Doing this would also cause the cost of living to rise in areas where it is significantly less than in the cities. Older folks and others on fixed incomes would be hurt.

Edited July 31, 2011 by Nisa

[kuffki]

The most sensible option in my opinion would be to raise minimum wage in proportion with inflation. ie if inflation is at 5%, raise minimum wage by 5% and not to the same level across all country but respectively for each province.

[bushwacker]

The most sensible option in my opinion would be to raise minimum wage in proportion with inflation. ie if inflation is at 5%, raise minimum wage by 5% and not to the same level across all country but respectively for each province.

With all due respect this is not very sensible. If you were to do this then the workers would remain at the exact same position as they were. If wage increases equal inflation then the worker stays the same and does not better his standard of living. :jap: Which is the whole point of the exercise.

What needs to be done is develop a model that equates increased productivity with increased wages. When the worker increases output so that the business makes more money then he/she should share in the increased profits up to the 300 baht. Of course if an employee is very valuable then the business owner is free to establish a higher compensation. The model could freeze the level of profits that the owner keeps until the employees reach the 300 threshold. When output increases with wage increases then inflation is controlled and everybody is happy.

A model would be perfect except for one problem. ...... We are in Thailand

[DanR]

Is it possible to reproduce a few editorials which haven't been drafted by the Democrats? There's nothing wrong with being critical of the government but the stuff which gets posted here is ludicrously one-sided.

[Crushdepth]

Is it possible to reproduce a few editorials which haven't been drafted by the Democrats? There's nothing wrong with being critical of the government but the stuff which gets posted here is ludicrously one-sided.

Which parts of the article do you think are wrong? It's just the standard arguments against large wage increases.

[kuffki]

The most sensible option in my opinion would be to raise minimum wage in proportion with inflation. ie if inflation is at 5%, raise minimum wage by 5% and not to the same level across all country but respectively for each province.

With all due respect this is not very sensible. If you were to do this then the workers would remain at the exact same position as they were. If wage increases equal inflation then the worker stays the same and does not better his standard of living. :jap: Which is the whole point of the exercise.

What needs to be done is develop a model that equates increased productivity with increased wages. When the worker increases output so that the business makes more money then he/she should share in the increased profits up to the 300 baht. Of course if an employee is very valuable then the business owner is free to establish a higher compensation. The model could freeze the level of profits that the owner keeps until the employees reach the 300 threshold. When output increases with wage increases then inflation is controlled and everybody is happy.

A model would be perfect except for one problem. ...... We are in Thailand

What factors do you think are used to set a minimum wage?

Yes when inflation is up so should the wage be because prices rise.

Do you propose just to give people huge salary so they can afford to buy anything and everything?(i do not mean 300 baht but general)

The model you are talking about is called bonus or commission or pay per job it certainly has nothing to do with minimum wages

[ginjag]

Min. wage needs to be raised but it would cause havoc to the economy to raise it this much in one swoop of the pen. This would be approx. doubling it in many regions in Thailand. Doing this would also cause the cost of living to rise in areas where it is significantly less than in the cities. Older folks and others on fixed incomes would be hurt.

Stop the mass migration from rural areas to Bkk=Pattaya. Having a 2 tier wage structure is wrong, persons going for the larger minimum wage finds it is swallowed up by the higher costs of living. 1 flat rate nationwide, maybe then you may get the migration back from the favoured places to the home towns, and invest in more local trades instead of relying solely on rice and sugar cane.

When you get the locals finding the costs of city life compared with the wages,THEN YOU GET PERCENTAGES going into the sex trade to get more money. Prevention better than cure. I know vast amounts of people who initially went away to Bkk for more money, and found after they had paid their dues were no better off that rural work. And so many people complain about some of them seeking seedier employment, They have choices we know but the lure of bigger money is too tempting for some.

[ballpoint]

Is it possible to reproduce a few editorials which haven't been drafted by the Democrats? There's nothing wrong with being critical of the government but the stuff which gets posted here is ludicrously one-sided.

Are you telling us that the labour representatives, the academics and the employer groupings who attended this event didn't say what the article says they did? Or are you telling us the event didn't take place, and is totally made up by the evil "Democrats" at The Nation? Come on, share your knowledge with us.

[jayboy]

Much of the opposition to the minimum wage proposal simply reflects the rage and mean spiritedness of the Sino Thai political and business establishment who have built their fortunes on monopolies,protection and low wages.The current government has a genuine mandate and , though the devil is in the detail, will no doubt in due course implement its election pledge - though I suspected in an adapted form.

More enlightened elements in the elite such as the outgoing Finance Minister saw merit in the proposal as this interview from 2010 makes very clear:

http://www.smh.com.au/business/thailands-perfect-solution-20100811-11zup.html

Longer term (because countries like Bangladesh will dominate this niche) unless Thailand wishes to continue as a low labour cost lower added value economy this measure needs to be implemented along with radical reforms in the educational sector

[hellodolly]

There is no question about it the minimum wage should go up. It should go up at a rate greater than the cost of living goes up. It should not however be done all at once.

On another thread there was talk of a mandate. As has been noted in this article in the past a election promise is not really expected to come true.

This time how ever thanks to the red shirts movements the election promises are expected to be delivered. In this election the promise have become Mandates. In their planing the PT did not expect the population to take them seriously now they are stuck with an imposable situation. The only way out is to admit it was a ill thought out idea and imposable to do but as has been pointed out by the academics say raise it up in increments that do not paralyze business and are more than the cost of living.

The cost of living is in all reality not a good figure to use as it includes the cost of things many Thai's can not afford to have. Such as the cost of gas. Many Thai's can not afford a motor bike.

Also the article did not address the issue of some one who has worked many years to attain a certain level of pay and in walks a 17 year old starting off at the same pay rate.

[DanR]

It's an editorial. It has a political axe to grind. it is impossible to have a functional grasp of English and not notice that.

[kuffki]

Much of the opposition to the minimum wage proposal simply reflects the rage and mean spiritedness of the Sino Thai political and business establishment who have built their fortunes on monopolies,protection and low wages.The current government has a genuine mandate and , though the devil is in the detail, will no doubt in due course implement its election pledge - though I suspected in an adapted form.

More enlightened elements in the elite such as the outgoing Finance Minister saw merit in the proposal as this interview from 2010 makes very clear:

http://www.smh.com.a...0811-11zup.html

Longer term (because countries like Bangladesh will dominate this niche) unless Thailand wishes to continue as a low labour cost lower added value economy this measure needs to be implemented along with radical reforms in the educational sector

Actually opposition is from people who own business and know what they talking about compared to either theoretical assumptions and employees who could not care less if business went out of business, because their brain does not grasp the concept that they will be unemployed.

I am yet to meet 1 employee who got pay rises, bonuses and everything else during high times for the business but offered anything in return for the tough times.

[hellodolly]

Much of the opposition to the minimum wage proposal simply reflects the rage and mean spiritedness of the Sino Thai political and business establishment who have built their fortunes on monopolies,protection and low wages.The current government has a genuine mandate and , though the devil is in the detail, will no doubt in due course implement its election pledge - though I suspected in an adapted form.

More enlightened elements in the elite such as the outgoing Finance Minister saw merit in the proposal as this interview from 2010 makes very clear:

http://www.smh.com.a...0811-11zup.html

Longer term (because countries like Bangladesh will dominate this niche) unless Thailand wishes to continue as a low labour cost lower added value economy this measure needs to be implemented along with radical reforms in the educational sector

You say

quote

"will no doubt in due course implement its election pledge - though I suspected in an adapted form."

Sounds to me like you are saying they wont deliver on it. You are rite in that assumption as they have not yet taken the reigns into their hands and are all ready backing down on it.

[jubby]

300 baht is less than the minimum Hourly wage in places like Britain.

OK, you can't compare like for like but with inflation , especially food inflation 300 baht goes nowhere. Its just about enough to feed a Family. It probably buys what 150 baht did a couple of years ago. I really feel the Poor here are becoming Poorer.

Failure to implement this could really lead to some serious Social unrest IMNSHO.

[DP25]

Much of the opposition to the minimum wage proposal simply reflects the rage and mean spiritedness of the Sino Thai political and business establishment who have built their fortunes on monopolies,protection and low wages.

Good thing this new government isn't run by mean spirited Sino Thai political and business establishment who have built their fortunes on monopolies, protection, and low wages.

[scorecard]

Academics, caught in the middle, tried to walk the middle path, saying the current rates were too low but the promised Bt300 was virtually impractical.

I reckon the academics have it right on this one. Raising the minimum wage to 300 baht in one go would be near on impossible for many businesses.

Raising the minimum wage to the same level nation wide would have interesting consequences. On one hand, why would businesses that rely on transport locate themselves in distant provinces. On the other hand, why would workers move to Bangkok or other expensive provinces if they can get the same wage elsewhere without the expense.

What's also missing, is big picture policy aimed at creating / supporting work opportunities in the provinces.

Everybody migrating to the big cities is disaster, as proven in numerous other countries across the world, and now well proven to be a major contributor to disfunctional family structure. There is already quality research on this point in Thailand conducted by the sociology professionals from Chula university (and possibly other institutions). Their empirical research findings are clear and are disturbing, small examples:

- "yes I have a mother, but I only see her two days a year for a few hours"

- " I have no idea what my fatherd dies, I think he workd in a factory in Chonburi".

- Numerous parents when asked: 'Why do you only stay a couple of hours when you go home to your village." Others replied "I feel very uncomfortable, I don't really know my child / children at all, I don't know what to talk about".

The research also shows that children brought up in these cicumstances generally (not in very case) have poor school results), and more importantly they make poor parents themselves because they have no direct experience of the role / relationship between parents and children.

Edited July 31, 2011 by scorecard

[kuffki]

300 baht is less than the minimum Hourly wage in places like Britain.

OK, you can't compare like for like but with inflation , especially food inflation 300 baht goes nowhere. Its just about enough to feed a Family. It probably buys what 150 baht did a couple of years ago. I really feel the Poor here are becoming Poorer.

Failure to implement this could really lead to some serious Social unrest IMNSHO.

Minimum wage is enough to feed 1 person in any country in the world. Did you want Thai unskilled labor get minimum wage to be enough to buy BMW and take yearly holidays to Bahamas.

[jayboy]

Good thing this new government isn't run by mean spirited Sino Thai political and business establishment who have built their fortunes on monopolies, protection, and low wages.

There are some similarities I agree but also some differences.One key difference is they were voted in by the Thai majority and are not dependent or bound to feudalists, a corrupt military and old fashioned monopoly capitalists.

[geriatrickid]

The most sensible option in my opinion would be to raise minimum wage in proportion with inflation. ie if inflation is at 5%, raise minimum wage by 5% and not to the same level across all country but respectively for each province.

One is still left with an inadequate minimum wage. The fact remains that the current minimum wage is inadequate.

[jayboy]

Actually opposition is from people who own business and know what they talking about compared to either theoretical assumptions and employees who could not care less if business went out of business, because their brain does not grasp the concept that they will be unemployed.

I note you ignore the support given to the proposal by Khun Korn when he was Democrat Minister of Finance.

[kuffki]

While the intentions of some people here is noble, many need to try to own and run business in Thailand and i do not mean just internet "i have a business"

I own some hotels, and i can tell you, some people come for job interview in boxer shorts, without a shower, un-brushed hair, dirty cloths etc.

Some staff simply come to work and sit there doing nothing, and when i say nothing i mean NOTHING.

1 housekeeper i had, it took her 6 hours to clean 1 room and mind you she was on double the minimum wage.

I have written out point by point instructions on what needs to be done daily and still same employees do nothing. Some can not even answer the phone.

And some here believe those should get a pay rise? if anything, their pay should be half.

There is no work ethics in Thailand, no loyalty or desire to succeed especially when it come to unskilled labor.

I have 3 times the needed staff because they simply do not care, raising their wage will not make them work or care any more or harder, all it will do is cost me more money but than i will fire half of them.

[kuffki]

The most sensible option in my opinion would be to raise minimum wage in proportion with inflation. ie if inflation is at 5%, raise minimum wage by 5% and not to the same level across all country but respectively for each province.

One is still left with an inadequate minimum wage. The fact remains that the current minimum wage is inadequate.

Just like any other country in the world.

[jubby]

300 baht is less than the minimum Hourly wage in places like Britain.

OK, you can't compare like for like but with inflation , especially food inflation 300 baht goes nowhere. Its just about enough to feed a Family. It probably buys what 150 baht did a couple of years ago. I really feel the Poor here are becoming Poorer.

Failure to implement this could really lead to some serious Social unrest IMNSHO.

Minimum wage is enough to feed 1 person in any country in the world. Did you want Thai unskilled labor get minimum wage to be enough to buy BMW and take yearly holidays to Bahamas.

Are you a Thai Business person Kuffi ? With a BMW maybe ? ...... I think the minimum wage covers a few other things too. No. let them starve. throw some more chemicals at them too so they can't forage off the land as much as they used to .

[scorecard]

Much of the opposition to the minimum wage proposal simply reflects the rage and mean spiritedness of the Sino Thai political and business establishment who have built their fortunes on monopolies,protection and low wages.

Good thing this new government isn't run by mean spirited Sino Thai political and business establishment who have built their fortunes on monopolies, protection, and low wages.

Hey jayboy, what are you going to comment when inflation goes through the roof eroding any gain, other workers demand a higher salary to maintain the difference between labor jobs and professional jobs, and more?

And, by the way, you never recognize that a large percentage of the posters here who dislike the paymasters selfish manipulative circus will quickly and strongly agree that there is a big gap between the rich and the poor and it urgently needs structured attention to lower that gap a lot and attention by gaining a situation whereby a much much larger percentage of the Thai population can have a good quality of life through their own productivity.

So perhaps you'd like to share some details of the specific pt policies aimed at "....quality of life through their own productivity".

[kuffki]

300 baht is less than the minimum Hourly wage in places like Britain.

OK, you can't compare like for like but with inflation , especially food inflation 300 baht goes nowhere. Its just about enough to feed a Family. It probably buys what 150 baht did a couple of years ago. I really feel the Poor here are becoming Poorer.

Failure to implement this could really lead to some serious Social unrest IMNSHO.

Minimum wage is enough to feed 1 person in any country in the world. Did you want Thai unskilled labor get minimum wage to be enough to buy BMW and take yearly holidays to Bahamas.

Are you a Thai Business person Kuffi ? With a BMW maybe ? ...... I think the minimum wage covers a few other things too. No. let them starve. throw some more chemicals at them too so they can't forage off the land as much as they used to .

1. If you can not read, then just copy/paste. The name is K U F F "K" "I"

Yes i am a business person in Thailand and yes i do work double if not triple the hours of staff and yes i do have education and skills and no i do not own a BMW, I own what is within my means.

Edited July 31, 2011 by kuffki

[DP25]

Good thing this new government isn't run by mean spirited Sino Thai political and business establishment who have built their fortunes on monopolies, protection, and low wages.

There are some similarities I agree but also some differences.One key difference is they were voted in by the Thai majority and are not dependent or bound to feudalists, a corrupt military and old fashioned monopoly capitalists.

They were voted in by a minority of voters. And PTP epitomizes feudalism in Thailand. Most of their seats have been ruled the same feudal families for generations. There was no revolution in Isaan, they are electing the same corrupt and old fashioned leaders today that they elected 30 years ago. The 'revolution' was buying them all and forming them in to a single political block. And their leader is a monopoly capitalist to the core

I think the minimum wage should be raised. However the 300 baht per day was nothing but an empty promise in order to win votes in the handful of competitive constituencies. They are not going to do it, and there won't even be a backlash from red shirts

[jubby]

The most sensible option in my opinion would be to raise minimum wage in proportion with inflation. ie if inflation is at 5%, raise minimum wage by 5% and not to the same level across all country but respectively for each province.

One is still left with an inadequate minimum wage. The fact remains that the current minimum wage is inadequate.

Just like any other country in the world.

I can see you've not Travelled extensively Tuffty, sorry, Kufti whatever .