Minimum Wage Proposal Causing Great Anxiety

[473geo]

As for the self employed, if your line of business does not pay above the minimum wage....I would suggest retraining for a profession that does.....

I think that is a line against having a minimum wage at all - if you think you are underpaid, re-train and get another profession?

Nope.....it is a line for commonsense.....in the real term of self employed...as in a professional self employed business person scenario, one would hope that the choice of profession paid more than the minimum wage.......if not retrain.......or go work for somebody who is paying the minimum wage.......

[473geo]

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.

Come on Dude, its not about the consequences... its the question of bal*s... She has to give those gam-ma-gawn 300bahts a day or she loses face... This is Thailand, Amazing..

Yep and over the term of government I reckon they will achieve the 300 baht minimum.......despite the crocadile tears being shed by the Tvisa 'business sector'

[monkfish]

Not sure about others but my minimum what I pay is 7500

I do not think I could find anyone work for 4000 and would not pay that because thats ridiculously low.

9 hour days, 6 days per week

I have a couple questions to those foreigners paying Thai's the minimum wage.

1. How much do you pay your staff per month?

2. How many hours do they work for that salary.

The lowest minimum salary in Thailand I believe is THB 151 per day and to my calculations based on a 6 day working week equates to THB 3624 per month !!

In Phuket I believe the minimum salary is THB 204 per day which equates to THB 4896 per month

In my opinion this is nothing but slave labour!

In that case the new minimum wage will not effect your business as you already pay MORE than the new minimum wage.

I don't think it will effect many businesses South of Bangkok unless they own a sweat shop up North.

Indeed it would also be impossible to find workers here in Pattaya for THB 4000 per month, even Illegal Burmese workers get 6000.

I agree it is ridiculously low and that's with a 6 day week and not 5 like the west.

Incorrect! the new minimum wage would be 9000 per month compared to 7500(what i pay now) to make my staff more appreciated and go in line with the pay rise, i would need to pay them 11000. So thats almost double to my wage expense.

plus the useless ones now would be up to 9000, so total monthly wages would double, no choice but to either fire half or put up the prices-same will be in all other businesses.

Take big C for example where they have hundreds on staff on payroll for each store, now add approx 300 000-500 000 to their monthly wages and watch prices grow over night.

Did I miss something? 6x4=24x300 = 7200

Or do your staff work 7 days per week and not 6 days as quoted above?

and even if so how is going from 7500 to 9000 double the salary??

[whybother]

The current minimum wage is between about 3,840 and 5,280 baht per month (based on a 6 day week). The new national minimum wage will be 7,200 baht per month.

If companies are currently paying their staff well above the minimum wage, will they also increase their wages by between 2,000 and 3,000 baht per month?

This large increase over a short time won't just affect companies paying minimum wage. It will affect all companies. Companies will need to cover the extra costs and they will do this by other cutting other costs or increasing prices.

The cost cutting will mostly be in the form of reducing staff or increasing prices.

Unemployment and inflation.

Increasing minimum wage in Thailand is a necessity, but doing it with such an large immediate increase will only cause problems.

[MaiChai]

The Thai working society is broken up in Burmese/Cambodian/Lao immigrant workers, Thais, middle class Thais, and the business owners and super rich. If the lowest paid workers (Burmese/Cambodian/Lao) are to be paid 300 baht, then the Thais who refuse to do the jobs the immigrants do will want more than 300 baht. If you think Thailand is getting expensive, then it will be getting more expensive very soon! Figure a huge hike in inflation, factory workers striking, some business closing and relocating and probably a devaluation of the Baht.

Thailand does not have the educated middle class that Malaysia and Singapore has. This means its somewhere between these more advanced countries and China. In a way Thailand competes with China. Personally I think if someone was looking for a cheap manufacturing base, you would not choose Thailand.

The west is getting poorer and the east is getting richer; how long before they start to come on a par?

Edited July 31, 2011 by MaiChai

[jackr]

Just plain irresponsible and banana republic-esque by those coming in - Thailand cannot become something it's not overnight. Do those folk harping on about the lower end being exploited really think this would improve their lot! They may end up with more baht in their pocket, but what's the point when prices go up wholesale.

[kuffki]

Did I miss something? 6x4=24x300 = 7200

Or do your staff work 7 days per week and not 6 days as quoted above?

and even if so how is going from 7500 to 9000 double the salary??

hmmm, why do you have 24 day? month has 4.3 weeks so its more like 26 days.

My calculations are based on the fact that all my staff are on salary and have a paid day off, so in fact it is 9000 baht.

Now if my new minimum is 9000 but now i am paying 30% more, that means i would need to pay 30% more on 9000 making it 11700.

As i said its almost a double from 7500.

[scorecard]

If the minimum wage increase leads to higher prices everybody will want a wage increase, again leading to higher prices..... Most likely every business will be effected.

And those not employed, doing casual jobs (payed per job, not hour etc), retired...will end up losing.

Not to mention lost jobs, work relocating for economic reasons. an inflation spiral etc etc .. but hey ... promise anything .....

Good point about work relocation, and one more point - foreign investment. I'm aware of a giant German engineering company who have recently again looked at Thailand to open another massive manufacturing plant (premium car parts).Thailand lost out to Vietnam for two reasons:

- Lack of productivity and quality.

- Instability in local economic factors, including overall unpredictable labor costs, but with a strong expectation that direct labor costs will rise substantially over the next few years, plus raw materials costs will go up substantially, again mostly because of labor costs.

Yes there is a giant gap between the rich and the poor and it urgently needs attention, but big pay jumps is not the answer.

The paymaster and his economics folks do know how to reduce the gap, but they have no intention to take the right decisions and go down the path which would really bring a better quality of life for a lot more Thais through their own productivity.

[Ricardo]

Yep and over the term of government I reckon they will achieve the 300 baht minimum.......despite the crocadile tears being shed by the Tvisa 'business sector'

The PTP promise is an immediate national-wage of 300B, not in 4 years' time, even the Dems were promising phased-increase over only a couple of years, so "over the term of government" doesn't quite cut it.

Did I miss something? 6x4=24x300 = 7200

Or do your staff work 7 days per week and not 6 days as quoted above?

and even if so how is going from 7500 to 9000 double the salary??

An average month has more-than 4 weeks, as every quarter has 13 weeks (4 times 13 = 52 weeks in-a-year), which is why many businesses run on a 13-month/4-week budget or accounting-year.

[Nisa]

There is no way they will raise the min. wage to 300 in one adjustment. It would have a terribly negative effect on so many people if it did, especially the elderly receiving a fixed monthly allowance out in the sticks were current min. wage is about 150 baht.

Can you imagine the devastation this would cause in any country/region to double the minimum wage overnight? Then consider how labor intensive Thailand is and how little automation there is because of this cheap labor.

In addition to greatly increasing the cost of basic needs such as food, you would also see an increase in unemployment as companies expect more from their workers and move towards automation and/or hiring more workers from neighboring countries willing to work for significantly less.

Thailand needs to continue to move to create more opportunity and increase education while taking responsible and incremental steps to raising the minimum wage.

A initial 20% increase would still cause prices to rise on such things as cheap food, that have already been rising, but would be a good start and certainly appreciated by workers. But trying to have a national minimum wage would be insane at this juncture given where Thailand is at. It would basically make the cost of living in rural areas near the same as the cities while the farmers actually make less because their overhead goes up.

[cjars]

Speaking as an employer here, who employs upto 400 unskilled Thai staff at a time in Chiang Mai.... We have always tried to pay above the daily minimal wage (in CNX THB 180), perhaps THB 190 to start and that increases once probationary period ends, to become a monthly salary of THB 5400 minimal wage in CNX by law. This wages goes upto a basic of circa. THB 11,000 / pcm with the highest roles of responsibility.

Over the past 9 years of working and seeing changes to the labour departments laws and minimal wages, I have always followed the law on this one, and increased wages by however many baht... but I have also taken an interest in the quality of lifestyle the majority decide/ are able to live... and would say that our basic salary gets shared in these ratios: your basic bedsit accomodation (THB 1000-2000/pcm), fuel (bike THB 200 / Car THB 1500), food for the month (THB 2000 - 3000) and the rest is spent on paying off loans, booze, lottery tickets, toiletries and clothes. Somehow, 70% of our staff manage to save betwenn 15-25% of their salary a month, depending on which months - which shows me that minimal wage is sufficient to live a quality of lifetyle. Whether or not is it the lifestyle they aspire too?, The remaing 30% of staff who save no/little money are wanting new bikes, phones etc...they will always find a use for more, and live beyond their means... but this is only something I have started seeing with Thai employees in the past 2-3 years, since the coming of credit cards/ ease to get credit on goods. On the most part our staff turnover is very low, which says for the work envolved, the payment is good enough. That or there isn't much work around, and they have no choice - which is <deleted>, plety of work and higher paid jobs in CNX.

We have invested you may say, my 'best' staff, giving bonus as we feel like it, giving certain privalidges, taking certain teams out to dinner/out on day trips - which is much appreciated, and makes for a pleaseant working relationship.

If wages were to increase to THB 300/ day or approx. THB 8100/pcm then this would mean basic increase of 20-40%, depending on the employee, which given the competitiveness of our 'friends' over in China (despite their recent inflationary/wage hike issues) - would see us pretty much F**ked!

We could absorb costs upto 10% perhaps, and cut number of employees down to barebones production, but that will means lots of people out of work - which is never good for staff moral. Would I then get the Burmese and Thai-Yai in instead? - again never good for the Thai nationals moral.

Our remaining staff costs would have to passed onto the end customer , Our international customers would not the benefit from working with a Thai company, and just buying on price... they would then go to China - which I really hate by da way!

I am a firm believer in what Thaksin stands for as a businessman, and what his Phua-Thai legacy is trying to do for the country - and am much happier being under their political rule... more so than the Democrats anyways... but thinking of the small business owners like myself whom play an import part in society with employment for unskilled labour, then perhaps the suggestion of easing us into this situation, in increments of THB 7 / day (3-4% even) every few months may take the pain away, and give us some time to scale down our operations - if indeed that is the solution.

I feel this is certain death for Thai manufacturers/exporters. OK so it boost national spending what with all the expendable wealth, but what gain is to be had to exporters like myself and even the tourism industry. ...

I believe people visit Thailand for many reasons, but many of them do because it's cheaper than having a holiday in Europe, US etc.. or well it was in 1997or even upto 6-7 years ago, but strong baht/ weaker currencies combined with higher wages to restaurant/hotel staff and other tourism service sectors will all have to be passed on too end customer too, making Thailand a 'less choice' destination for all us cheap Bas*ards and alike.

Rant over. Peace.

[lungmi]

In my area we have a system of pork farms.Thai boss was veterinary, his wife from Denmark pork grower dynasty. They pay BHT 169 for everyone, the basic wage. But they provide clean working clothes, free food at the

staff restaurant, insurance for accidents and 1 to 2 kg of good meat every day to take home (and sell in their home village)

I saw the factory, western standard, I thought they produce computer chips.

The boss can pay 300 BHT, no problem, but I won't have high quality fillet steak.

[livinthailandos]

I'm sure this has got to be at least the 5th time about the minimum wage topic being discussed. by looking through so many of the postings about this issue i'm already bored about this topic. the reality is the thai government lives in some fantasy land only looking out for themselves ( actually now that I really think about it all politicans are the same in this regard ) I'm for sure that the business community or lobbyists or whatever thailand has probably has been screaming, kicking or whatever there doing to get this new government to find another way to implement changes. anyways good thailand for improving the minimum wage and doing nothing else to make any real serious change to anything. examples are

Nothing to actually enforce any real rules or regulations

Nothing about fixing scams

Zero effort to actual have a real education system ( I do realize they don't want their citizens having a real education that would be bad for them )

No actual progress if making any dent in problems in the south

Good news

tablets for school children I'm sure the thai kids would learn the art of being better skilled at playing video games

[jdinasia]

Yep and over the term of government I reckon they will achieve the 300 baht minimum.......despite the crocadile tears being shed by the Tvisa 'business sector'

The PTP promise is an immediate national-wage of 300B, not in 4 years' time, even the Dems were promising phased-increase over only a couple of years, so "over the term of government" doesn't quite cut it.

Did I miss something? 6x4=24x300 = 7200

Or do your staff work 7 days per week and not 6 days as quoted above?

and even if so how is going from 7500 to 9000 double the salary??

An average month has more-than 4 weeks, as every quarter has 13 weeks (4 times 13 = 52 weeks in-a-year), which is why many businesses run on a 13-month/4-week budget or accounting-year.

4.25 weeks in the month for calculations always works well.

[noahvail]

Yep and over the term of government I reckon they will achieve the 300 baht minimum.......despite the crocadile tears being shed by the Tvisa 'business sector'

The PTP promise is an immediate national-wage of 300B, not in 4 years' time, even the Dems were promising phased-increase over only a couple of years, so "over the term of government" doesn't quite cut it.

Did I miss something? 6x4=24x300 = 7200

Or do your staff work 7 days per week and not 6 days as quoted above?

and even if so how is going from 7500 to 9000 double the salary??

An average month has more-than 4 weeks, as every quarter has 13 weeks (4 times 13 = 52 weeks in-a-year), which is why many businesses run on a 13-month/4-week budget or accounting-year.

4.25 weeks in the month for calculations always works well.

4.33 weeks works even better

[dutchweller]

I decided I would post some snaps I took over the last few days.

Both Instances gave me a jolly good chuckle.

and thinking to myself..

As an employer would you want to be paying each of these workers 300 THB for this type of productivity?

I think Thai workers will get a serious shock if this 300 THB is implemented as any Sane employer will be cutting staff levels to counter the increase in wages (Just as my Employer has already started to do 100 jobs Axed )

and each worker will be expected to be more productive to fill the void.

More money per work = less workers on the Job + same work output expected.

I wonder what the crime rate will be like when all the unemployed turn to less legal means to put food on the tables?

Oh well I guess the BIB will be happy think of all the kick backs for the "blind Eyes" they will be getting..

Note:

The Ladies doing the painting were in a government office they took approximately 4 hours to collectedly paint 2 x 3 Meter wall.

Uploaded with ImageShack.us

The 8 men took 8 hours to screw recycled corrugated "ASPESTOS!" to a pre erected fence.

It mostly fell down 4 days later after a rain storm I was told they were a Building company building a 10 floor apartment next door.... So I believe they were probably all Immigrant workers but hey they are going to want a bit of this 300 THB action too.

Uploaded with ImageShack.us

[gregb]

I hear many people complaining that the current minimum wage is too low. Well, that is all relative. Thais on minimum wage today still live remarkably better than peasants did in Thailand 1000 years ago. So obviously it is a "liveable wage", just not pleasant according to our standards.

What everyone is really complaining about is that they want the wealth of the country distributed in a more egalitarian fashion. That is a commendable goal, but I just don't think this is going to happen the way everyone expects. The world is entering a period of economic decline and collapse. The market for all goods and services except for low cost necessities is shrinking. Overproduction and malinvestment are already serious problems in all countries. Most of the electronics manufacturers I know in Thailand have been cutting hours and no longer giving overtime to their employees. They are losing customers due to lack of demand. Raising the minimum wage will almost certainly put them out of business. There is absolutely no reason to use a Thai manufacturer when the Chinese do the job just as good, at a lower cost, and currently have a bunch of spare capacity.

The wealth will be shared more fairly alright...everyone will get the same...nothing. Not saying this is good or bad, it is just reality. Everyone needs to learn to start living with less, not more, and accept that this is going to be the way it is for the rest of your life. If you think today's minimum wage is bad, you are going to be horrified at what labor is worth tomorrow. As the global industrial economy slide deeper into decline, the commodity that is going to be least in demand is labor.

Despite what everyone thinks, we all are extremely wealthy today...and that includes the Thais working at the existing wage scale. In 20 years the poor will look back and reminisce on how good they had it in 2011.

[tomahawk]

I think the problem will be that whether this proposal is sensible or not, this pay raise is a promise and the majority of workers will consider it broken if they do not get the 300 bt. raise. it is too late to back out of it now, in my opinion. Somebody should maybe have thought this whole thing out better before they announced it. Now it is too late and I think the govt. is going to be stuck with it, regardless of consequences.

[JimGant]

Sure, it will probably get implemented -- it just won't be enforced. Same as always happens when nonsensical laws are enacted that counter market forces -- you get "black (or grey) markets." In this case, it'll be the labor market.

In some cases, like in North Korea, where labor laws are part of sacred doctrine, black marketeers are, for the most part, six feet under. Other nations, more pragmatic than doctrinaire, learn to treat unrealistic laws with a wink and a nod -- even, in some cases, setting up "special" industrial zones. Thailand is certainly of the pragmatic persuasion.......

Non enforcement in Thailand will work best with casual laborers. But even those in large factories -- and organized -- will find, after a few of these factories shut-down or move, that in order to have a job, it will be best not to piss into the wind.

Even a less draconian minimum wage implementation will feel the rudder of market forces guiding it.

[TAWP]

I hear many people complaining that the current minimum wage is too low. Well, that is all relative.

I have tried to get any of the proponents to outline exactly what a 'fair' wage is, but none have done so sofar. They rather talk about big and evil businesses.

[Galong]

So, (admittedly being selfish) should I hold on to my US dollars and wait for the Thai economy to crash so I'll get a better exchange rate or will the US economy crash and make this an invalid issue?

[JimGant]

I have tried to get any of the proponents to outline exactly what a 'fair' wage is, but none have done so sofar. They rather talk about big and evil businesses.

Well, the market wage is where the supply and demand curves intersect. If somehow society deems this too low to be "fair," well, that's where society wickers the tax structure to give "credits" to amend for the unfairness. If that means property taxes -- for the first time -- so be it.

Don't, however, phuck with the market wage. Elementary Econ 101, as someone has already pointed-out. (In fact, as I re-read the above, I'm already hearing an echo -- so, sorry to be repetitive.)

[Bkkorupcountry]

So, (admittedly being selfish) should I hold on to my US dollars and wait for the Thai economy to crash so I'll get a better exchange rate or will the US economy crash and make this an invalid issue?

It depends on whether you listen to lettibe who is still busy (after two months) getting ALL his money out of Thailand or SichonSteve who is delighted the baht is strengthening relative to the pound.

If I were you, I would change all my US dollars to Renminbi.

[Gary A]

Most international companies and many progressive Thai companies already pay more than 300 baht per day. Companies that are not able to pay the 300 baht minimum wage must either change their way of doing business or find a new product. How many farangs here could live on 300 baht per day?

If the companies paying slave labor wages go out of business, so be it. Keep in mind that I am talking about industry and NOT small mom and pop businesses. The days of big business owners becoming incredibly wealthy on the blood and sweat of slave wage employees should and must come to an end.

[Galong]

So, (admittedly being selfish) should I hold on to my US dollars and wait for the Thai economy to crash so I'll get a better exchange rate or will the US economy crash and make this an invalid issue?

It depends on whether you listen to lettibe who is still busy (after two months) getting ALL his money out of Thailand or SichonSteve who is delighted the baht is strengthening relative to the pound.

If I were you, I would change all my US dollars to Renminbi.

Thanks buddy. I'm in a bit of a fix with almost $30K in a PayPal account and they seem to offer the worst exchange rates of all. I'll look into the Renminbi though. Thanks for the suggestion. What's going to happen to that currency when the US gov inevitably falls completely apart and stops paying back their debt to the People's Republic....hmmm?

[Nisa]

Most international companies and many progressive Thai companies already pay more than 300 baht per day. Companies that are not able to pay the 300 baht minimum wage must either change their way of doing business or find a new product. How many farangs here could live on 300 baht per day?

If the companies paying slave labor wages go out of business, so be it. Keep in mind that I am talking about industry and NOT small mom and pop businesses. The days of big business owners becoming incredibly wealthy on the blood and sweat of slave wage employees should and must come to an end.

If the minimum wage is doubled in some areas, as this would do, it would cause the rise in price of many essentially needed goods to rise 25% to 50% causing huge problems for many many people when it comes to basic living items such as food.

If you want companies to go out of business because of high salaries then you must realize that this would result in many people no longer making 150 or 200 baht a day but making nothing and having to deal with significantly hire prices for things like food.

I can't imagine a "farang" surviving on minimum wage in the US in any big city or most small ones for that matter. Minimum wage should not be a goal for anyone but should actually encourage people to get an education, work hard and move up in their careers but we all have to start somewhere.

Yes, incomes need to continue to grow in Thailand as Thailand continues to grow and modernize but a huge single jump in increase would have terrible effects including Thailand going from having a very tiny unemployment rate to having a much larger one.

[whatsupdoc]

Most international companies and many progressive Thai companies already pay more than 300 baht per day. Companies that are not able to pay the 300 baht minimum wage must either change their way of doing business or find a new product. How many farangs here could live on 300 baht per day?

If the companies paying slave labor wages go out of business, so be it. Keep in mind that I am talking about industry and NOT small mom and pop businesses. The days of big business owners becoming incredibly wealthy on the blood and sweat of slave wage employees should and must come to an end.

Many international and progressive Thai companies need skilled labor, and yes, they already pay more than 300 baht. However, a lot of companies provide work for a relatively unskilled workforce and pay the minimum wage or a little above.

Most companies in Thailand do not make huge profits (same as anywhere in the world). They might never even get a positive return on their investment, struggling to keep afloat.

So with the 300 baht minimum wage a lot of businesses will need to fold or increase their prices. Will being out of a job help the poor employees? And clearly, everybody who says that the current minimum wage rate is like slavery doesn't mind to pay more as an end consumer?

[Bkkorupcountry]

So, (admittedly being selfish) should I hold on to my US dollars and wait for the Thai economy to crash so I'll get a better exchange rate or will the US economy crash and make this an invalid issue?

It depends on whether you listen to lettibe who is still busy (after two months) getting ALL his money out of Thailand or SichonSteve who is delighted the baht is strengthening relative to the pound.

If I were you, I would change all my US dollars to Renminbi.

Thanks buddy. I'm in a bit of a fix with almost $30K in a PayPal account and they seem to offer the worst exchange rates of all. I'll look into the Renminbi though. Thanks for the suggestion. What's going to happen to that currency when the US gov inevitably falls completely apart and stops paying back their debt to the People's Republic....hmmm?

I reckon that China will then actually be providing financial support and bailing out the US. Mind you, the RMB is still artificially being kept low.