Public Sector May Gain From Thai Graduate Pay Rise

[webfact]

Public sector may gain from graduate pay rise

By WANNAPA KHAOPA

THE NATION

But people concerned move will spur higher living costs

The new government's promise to pay a minimum salary of Bt15,000 to university graduates is likely to change the labour market, as positions in the public sector will be more attractive than in the private sector, according to Chatphong Wongsuk, president of the Personnel Management Association of Thailand.

Chatphong expected the public sector would have an advantage over the private firms in personnel selection, as its starting salary level was likely to be more competitive - as it will rise from Bt8,000 or nearly Bt9,000 to Bt15,000 a month.

People expect the policy will be enforced with public agencies as the first to adopt the new rate.

"Labour law used with the private sector only covers daily minimum wages paid for workers, and doesn't include monthly salaries," Chatphong told The Nation.

"Small companies are likely to be affected if the policy takes effect, especially those paying employees less than Bt15,000. Job applicants, including ones with high potential will pay more attention to public agencies, so more applicants will apply for jobs with them. Thus, public agencies will be able to recruit people with higher potential," he said.

Because of this, Chatphong said he expected some private firms would also increase salaries to attract good employees.

It's not only new graduates who are expected to enjoy higher pay - current staff are also expected to enjoy a rise in salary. But Chatphong said the government salary moves would cause a big budget burden.

The burden of salary hikes could also have a negative impact on some in the private sector, if small firms are unable to hire new employees or face the threat of having to close down. But he said it was still too early to say how things would play out.

However, Chatphong said he personally agreed with the policy, as it would improve public servants' quality of life. But he said they should also improve the quality of their work.

Nimitz Modrakee, chief executive officer of 124 Communications Consulting, agreed that the government should be given a chance to boost graduates' wages. "If they implement this policy and later it doesn't work, later it will end."

Nimitz said his company normally paid graduates more than Bt15,000 a month, as he believed high salaries attract people of higher potential to the firm, and it recruited no more than five new employees a year. So, they would not be directly affected by the policy.

"Each company has to have business plans to prepare for changes and find solutions," he said. "Higher pay is not the only thing that helps lure qualified applicants, but good teamwork and opportunities are also crucial," Nimitz said.

Meanwhile, graduates voiced concerns about higher commodity prices since the policy would cause employers to have higher costs.

Nonlanee Panthachotirat, a graduate from Thammasat University, said: "I disagree with this policy because it may cause higher living costs."

She said people with different specific skills should be paid differently. She preferred the current system of various pay rates for employees with different skills.

"Although, I told a Bangkok company I applied for a job with that I would like Bt16,000 in salary, I don't mind if I am paid less than that as I don't have work experience," Nonlanee said.

Anis Phongprasert, a graduate from Mahidol University, said she agreed with the policy, but she was also worried about price rises.

She applied for a job with a bank in Pattani and said she told them she would be satisfied with Bt12,000 to Bt13,000 in salary.

"If I get the salary I sought, that's okay for me as I'd live in an upcountry province," Anis said.

However, with higher living costs for people working in Bangkok, those working in the capital should be paid more, she said.

-- The Nation 2011-08-08

[apetley]

Just a quick thought on this.

My Thai wife used to work in a Govt office. A graduate, her salary was about 8 or 9k bht per month. 5 other workers all got the same.

Now if a new entrant comes in and earns 15k per month will the other 5 all get a 6 to 7k bht pay rise or will they all be paid substantially less than the newby despite years of experience?

[Thai at Heart]

Big problem here is that largely, 300 baht a day is 9,000 baht a month. Not easy to reconcile having daily labour earning the same as a uni graduate in a government office. That said, it would be a lot easier to pay 15 k if 30% of each government contract wasn't siphoned off for a select few to benefit from.

I lived in a country where it was deemed as the best job in the country to work for the government. I see Greece has a few problems these days. I think the best way to appear to move the salary to 15k would be to give better benefits as opposed to railing the salary up to that level in one go.

I wonder if the average government office in Thailand has ever really implemented performance related bonuses? Would probably help to cut corruption, and go some way to improving service.

Edited August 8, 2011 by Thai at Heart

[DP25]

The new government's promise to pay a minimum salary of Bt15,000 to university graduates is likely to change the labour market

It's not going to change anything because it won't actually happen

[OzMick]

ABAC says 47% (+/- 7%) are waiting, considering that the most important election promise, pretty close to their % of the vote. If it don't happen fur will fly!

OTOH - massive blowout in public service budget, a lot of excluded teachers VERY annoyed, private firms forced to increase salaries to compete, inevitable price rises and inflation, the last boosted by the B300/day.

Oh what a tangled web we weave when we tell the bar-nocks what they want to believe! (Sorry Wally!)

[REM]

I see a few scenarios that could happen.

The first is that people won't hire the grads. This is unlikely, but they will probably expect more from them, like English proficiency or for them to be more outgoing. I think it will definitely change the hiring market.

The second is that there will be an income gap. Of course they're not going to give raises to the older employees. Why pay more for the same work? This could also cause some problems of it's own.

The third is that prices will start to go up. Employers will know that people have more disposable income, and they will want it.

These things happen all of the time, no matter what country. I think this is the grand plan, with a raise in VAT + increased spending power. It could work if you take corruption out of the mix, but we all know that won't happen. Who could we pay off to have that happen???

[animatic]

Looks like a huge expansion of the Government Bureaucracy sector...

Just what the nation needs; even more bureaucrats, with larger salaries,

with their hands out for tea money.

And yes there WILL be massive dissension when the inexperience Uni-Grad-Newbies make 40% more than people with 10 years in the job, and still don't know their job descriptions ass from elbow, except in theory.

[SomTumTiger]

Just a quick thought on this.

My Thai wife used to work in a Govt office. A graduate, her salary was about 8 or 9k bht per month. 5 other workers all got the same.

Now if a new entrant comes in and earns 15k per month will the other 5 all get a 6 to 7k bht pay rise or will they all be paid substantially less than the newby despite years of experience?

Increases would have to rise across the board. My (Thai) wife is CFO of an American textile manufacturer, and said that a rise to 300 baht would increase her labor costs 30-40 percent because everyone would have their rate adjusted, so that the new people didnt' make the same as those with more time on the job. I don't mind increasing, but this 80 percent increase in one go seems to be too drastic. I would increase in stages to give the market time to absorb the change.

[TAWP]

Expanding the public sector always ends up bad for the nation in the end. Do we have to point to EU and US to prove it?

[wongnasty]

Looks like a huge expansion of the Government Bureaucracy sector...

Just what the nation needs; even more bureaucrats, with larger salaries,

with their hands out for tea money.

And yes there WILL be massive dissension when the inexperience Uni-Grad-Newbies make 40% more than people with 10 years in the job, and still don't know their job descriptions ass from elbow, except in theory.

Several readers have completely overlooked: "It's not only new graduates who are expected to enjoy higher pay - current staff are also expected to enjoy a rise in salary."

The fact that minimum wage hike would basically be bump every employee's wage up (relative to the new wage) complicates the situation even further, as SomTumTiger points out. I wouldn't necessarily worry about older workers losing out on a wage hike, but more about them losing their job if the business they work for tanks/lays off workers.

Word.

[wongnasty]

Expanding the public sector always ends up bad for the nation in the end. Do we have to point to EU and US to prove it?

That's an incredible simplification... and a dichotomy that pundits rely on too often. What about Korea, Sweden, Germany, and many other strong economies with large meddling states (even socialist...). I don't love government (not at all...), but I don't love the neo-liberal "free" market either.

[TAWP]

Expanding the public sector always ends up bad for the nation in the end. Do we have to point to EU and US to prove it?

That's an incredible simplification... and a dichotomy that pundits rely on too often. What about Korea, Sweden, Germany, and many other strong economies with large meddling states (even socialist...). I don't love government (not at all...), but I don't love the neo-liberal "free" market either.

Is that a joke? My nordic home-country has a vastly over-sized public sector, designed by the social democrat party to be used as a source of scare-mongering in times of elections with 'the others wanting to reduce it, you will all lose your jobs', guaranteeing life-time employment no matter how under-efficient, over-paid or not necessary the employed person is. As long as they vote in the socialists in power.

That is what created the financial crises in my nation some time back and finally lead to a real break in the socialist's almost 80 year old reign on the nation as they started losing elections...

That is the path you wish to walk, seeing the governments expenditure increase astronomically and the combined tax level for a normal worker to be well over 65%? It is nuts.

[cup-O-coffee]

Just one comment; not one sentence using the word "qualified" in that entire article! Most of the crap verbage was about people enjoying a higher salary! How about doing the dam_n job and making the customers happy? And how do you do that? How do you make customers happy? Maybe they should hire some of the local girls and forget the slip shod Uni's.