Thai Academics Give Bt300 Wage The Nod

[webfact]

Academics give Bt300 wage the nod

By The Nation

Academics from various agencies, including the Thailand Development Research Institute (TDRI), yesterday expressed full support for the idea of raising the daily minimum wage to Bt300 across the country.

"The current wage is not sufficient for workers to avoid poverty," TDRI Labour Development Research Director Assoc Prof Dr Yongyuth Chalamwong said yesterday.

Yongyuth said while the cost of living has risen by 3.25 per cent over the past 10 years, the daily minimum wage has risen by just 2.84 per cent.

Ammorn Chavalit, an academic adviser to the Labour Ministry's Office of the Permanent Secretary, added that while product price had soared by 28.2 per cent over the past decade, the daily minimum wage had increased by 25.7 per cent only.

They were speaking at a seminar entitled, "What do you think about the Bt300 daily wage?"

Federation of Thai Industries representative Thaweekij Jatujarernkhun, warned that the sharp rise in the daily minimum wage might prompt many employers to relocate their manufacturing bases to a neighbouring country like Cambodia.

"The monthly wage for workers there is just a little over Bt2,000," he said.

Wanlop Kingcharnsin, who represents employers in the Central Wage Committee, urged the government to think about unregistered workers if the daily minimum wage suddenly rose.

"Product price will increase too and while more than 10 million registered workers who get the pay raise will be able to cope - what about the 24 million people outside the registered labour sector, such as farmers?" he asked.

-- The Nation 2011-09-05

[bushwacker]

If ..." the cost of living has risen by 3.25 per cent over the past 10 years," then how the hell can the Labour Ministry's Office of the Permanent Secretary, say, the " product price had soared by 28.2 per cent over the past decade".

Do these guys just say what ever number comes into their head while they are talking or is the drug problem really more sever than we imagined? :jap:

[whybother]

If ..." the cost of living has risen by 3.25 per cent over the past 10 years," then how the hell can the Labour Ministry's Office of the Permanent Secretary, say, the " product price had soared by 28.2 per cent over the past decade".

Do these guys just say what ever number comes into their head while they are talking or is the drug problem really more sever than we imagined? :jap:

I would expect that it is more of a reporting issue. It's probably an average of 3.25 per cent per year over the last 10 years.

[hammered]

Playing games with inflation figures is what governments arr good at to make them look good. The reality of life at the bottom is how much has street food, cooking oil, pork and vegetables etc gone up in the past decade. Street food has doubled as has pork and as for cooking oil. In the meantime minimum wage has nowhere near doubled. Of course a dramatic increase is needed

[OzMick]

I suspect some lousy reporting here. 2 experts give figures for the increase in minimum wage that differ by a factor of 10 - highly likely Yongyuth was quoting per annum figures.

From both, it looks like the minimum wage has slipped behind by around 3% over the last 10 years. Does that justify a rise in the 40-80% region, and possibly lesser flow-ons to those (currently) above minimum wage?

24 million Thais are outside the wage structure. Those that can will raise prices (hello inflation), those that can't suffer the consequences.

[rogerdee123]

I don't like Thaksin and believe the current Govt is a step backwards for THailand ...... But on this minimum wage issue ...

if they implement it (along with their other costly initiatives) ... it will probably bring inflation and a weakening of the Thai Baht ..... which should increase exports, etc etc etc ...

Yes of course prices for cooking oil, rice, sugar, oil and everything else etc will go up, but for the average laborer or construction worker he think's he's flush because he's making twice as much.

Also a significant weakening of the baht would help bail out the Govt's rice scheme.

Some number cruncher at the finance ministry only has to work out the formula, i.e. ..... if the baht falls to say 50 baht = 1 US$, then 300 baht ain't such a high wage for the multinationals that compete in this part of Asia.

Don't misunderstand me .... I think they are playing with fire and it's very risky for the economy when they make radical and sudden changes like this ... but run-away inflation or hyper inflation could indeed bail this Govt out re their campaign promises .... although it would be terrible for the country, although most people wouldn't understand this 'cause and effect' .... many would probably praise the Govt (and Thaksin) for ripping them off again.

[apalink_thailand]

What will be the knock on effect of raising the min. wage to 300? I mean, if small shops or restaurants now have to pay their staff more money then it is a sure bet that they will raise the price of their products/services hence possibly negating the effect of a salary increase. I am not an economist but aside from the effects on the manufacturing sector, there will surely be an knock-on effect on the local retail sector. The vast majority of businesses in Thailand are small family businesses and serve the local communities.

For those of us in the manufacturing sector, I can only hope that the government will come to its senses and if it raises salaries (which is fine) then it must help us to recoup the costs in some other way. Tax credits or perhaps a reduction in import duties on material needed for production. Yes, in theory we can reclaim duties on exports but what about products we manufacture and sell locally? Import duties are a major cash-flow hit for many companies. What about offering some sort of reasonable trade financing schemes? Otherwise, we have to raise prices and likely be uncompetitive in the export markets. Business lost = jobs lost.

In the log run, a simple "popularist" raise in salaries without some other scheme to support and sustain the raises is a recipe for disaster.

[taichiplanet]

The up-side with increasing wages is that the big retail stores will probably decrease the number of staff; that means less people wandering around getting in my way while they chat on their mobiles or blocking the aisles when they are chatting each other up!

Edited September 5, 2011 by taichiplanet

[ROMANOBA]

The minimum wage rule does not protect the workers anyway, at least not many of them.I know plenty of thai workers who DO NOT get the minimum wage.So the gap between official business and unofficial ( not registered) business will become bigger, and the official ones will bleed.Of course from a ethical point of view an increase in minum wage is overdue, but fact is; it does not work.Better a free economy where the market dictates the wages.

Playing games with inflation figures is what governments arr good at to make them look good. The reality of life at the bottom is how much has street food, cooking oil, pork and vegetables etc gone up in the past decade. Street food has doubled as has pork and as for cooking oil. In the meantime minimum wage has nowhere near doubled. Of course a dramatic increase is needed

[mdechgan]

I think 300 baht per day is reasonable. It is really difficult to live on just 200 baht or so per day. 3 meals at 40 baht per meal that leaves only 80 baht for transportation. What about rent?

However owners would probably cut the staff or work hours from 6 days a week to 5. Might also force them to be more productive like shorter breaks and cuts in benefits or bonuses.

I think Thailand has it lucky. Could you imagine the wages if the Thai workers were unioninzed? UAW workers average $75 per hour!

[Crushdepth]

Were any of these academics economists?

[Acharn]

What will be the knock on effect of raising the min. wage to 300? I mean, if small shops or restaurants now have to pay their staff more money then it is a sure bet that they will raise the price of their products/services hence possibly negating the effect of a salary increase. I am not an economist but aside from the effects on the manufacturing sector, there will surely be an knock-on effect on the local retail sector. The vast majority of businesses in Thailand are small family businesses and serve the local communities.

For those of us in the manufacturing sector, I can only hope that the government will come to its senses and if it raises salaries (which is fine) then it must help us to recoup the costs in some other way. Tax credits or perhaps a reduction in import duties on material needed for production. Yes, in theory we can reclaim duties on exports but what about products we manufacture and sell locally? Import duties are a major cash-flow hit for many companies. What about offering some sort of reasonable trade financing schemes? Otherwise, we have to raise prices and likely be uncompetitive in the export markets. Business lost = jobs lost.

In the log run, a simple "popularist" raise in salaries without some other scheme to support and sustain the raises is a recipe for disaster.

Well, in America conservatives think the answer is obvious. Raising the minimum wage means the cost of goods will rise, inflation will soar,employers will hire fewer low-wage people, and many jobs will be lost to lower-cost neighbors. The data and studies I've been able to find generally disagree, except those from right-wing "think-tanks." There are usually many exemptions to the minimum wage, not to mention that it's very hard to enforce so a lot of employers cheat anyway.

I don't think it's possible for the baht to weaken more than it is. The Bank of Thailand has been doing the best they can to keep it weak. This has been policy since the melt-down of 1997, the same as China, and for the reason they intend never to be again in the position where they have to go to the IMF, which was rightly seen as imposing demands on Thailand to open it up to looting by foreigners. Friends of mine speak of the days when the baht was 50 to the dollar; I was here then but don't remember it ever got that good. There is no way the baht is going to weaken that much in the foreseeable future, and I just hope the BoT continuew its policy of a weak baht, since my pension is in dollars (doing down, down, down).

[richardblanc]

IN FRANCE they make almost the same bullshit story,they raise the minimun wage,consequence

sugar coffe milk beef and everything else became so expensive

there is more poor peoples now

and the big factory still delocated to estern europe and asia where the minimun wage is so low

minimun wage workers are always fuc_k anywhere in the world

i really fell sorry for those thai workers REALLY

for becoming a rich country big factorys need to make more and more money

they don't care about workers

ONLY MONEY THEY WANT MORE AND MORE for what ?

self satifaction !!!! SEE U IN HELL

[pedro01]

Interesting stuff.

Does anyone have any figures on this?

How many people are earning the minimum wage?

By what percentage will the amount of money spent on food/consumables increase?

What is the projected impact on the cost of food/consumables because of this additional increase?

What percentage of people employed by foreign companies will benefit from this increase and what will this represent in terms of total cost increase by industry?

It's hard to talk about the knock-on effect, without some additional information in my opinion.

For sure, 300 Baht is a pittance. I personally doubt that we'd see hyperinflation because of the extra money in certain pockets.

[ginjag]

Interesting stuff.

Does anyone have any figures on this?

How many people are earning the minimum wage?

By what percentage will the amount of money spent on food/consumables increase?

What is the projected impact on the cost of food/consumables because of this additional increase?

What percentage of people employed by foreign companies will benefit from this increase and what will this represent in terms of total cost increase by industry?

It's hard to talk about the knock-on effect, without some additional information in my opinion.

For sure, 300 Baht is a pittance. I personally doubt that we'd see hyperinflation because of the extra money in certain pockets.

Academics say GIVE it--the government say we will when we get elected to then do a u turn and give us 6 months to get organised to-we will give it to some areas (Ha -that are already giving it). then we will phase it in over a period....ALL bul###t

[horsewell]

This is not inflation. Inflation is the erosion of the value of money because of an increase of money is in circulation. The value of each unit of currency will decrease as the new money is absorbed by the economy.

It's good that they are getting more money. It will probably result in the cost of living to go up in areas that they implement the wage rise which will probably wipe off all benefit and leave people outside the system worse off. There is also a possibility that some businesses will not open and others will move to countries with cheaper labour.

Wouldn't it be better to include the wages of the lowest paid workers and increase the wages slowly over the next few years?!? Then the government can manage the situation.

This will not help people out of poverty. People will probably still have to spend all their money on the cost of day to day life.

[somo]

Without pressure or a law demanding businesses pay a decent wage thai workers will continue to live in virtual slavery.

Thailand has to make the transition from low wage economy and share the wealth the fast growing economy is generating.

If the fat cats get squeezed a bit then so be it as the alternative to the current suppression is more rioting and possible revolution. Forcing poverty on a large section of society will always bring a reckoning. Many thai companies are run inefficiently because labour is so cheap. Perhaps this and inevitable future wage hikes will make them think about improving efficiency. The minimum wage should also be index linked to inflation + say 5% to ensure the process continues. Leaving it to the free market will only ensure further misery and the inevitable explosion.

[rogerdee123]

Quote "Inflation is the erosion of the value of money because of an increase of money is in circulation" UnQuote

Not necessarily .... "The term "inflation" originally referred to increases in the amount of money in circulation, and some economists still use the word in this way. However, most economists today use the term "inflation" to refer to a rise in the price level." Wikipedia.

..... "An increase in the money supply may be called monetary inflation, to distinguish it from rising prices, which may also for clarity be called 'price inflation'." ...... Wikipedia continued

This is not inflation. Inflation is the erosion of the value of money because of an increase of money is in circulation. The value of each unit of currency will decrease as the new money is absorbed by the economy.

It's good that they are getting more money. It will probably result in the cost of living to go up in areas that they implement the wage rise which will probably wipe off all benefit and leave people outside the system worse off. There is also a possibility that some businesses will not open and others will move to countries with cheaper labour.

Wouldn't it be better to include the wages of the lowest paid workers and increase the wages slowly over the next few years?!? Then the government can manage the situation.

This will not help people out of poverty. People will probably still have to spend all their money on the cost of day to day life.

[scotbeve]

What will be the knock on effect of raising the min. wage to 300? I mean, if small shops or restaurants now have to pay their staff more money then it is a sure bet that they will raise the price of their products/services hence possibly negating the effect of a salary increase. I am not an economist but aside from the effects on the manufacturing sector, there will surely be an knock-on effect on the local retail sector. The vast majority of businesses in Thailand are small family businesses and serve the local communities.

For those of us in the manufacturing sector, I can only hope that the government will come to its senses and if it raises salaries (which is fine) then it must help us to recoup the costs in some other way. Tax credits or perhaps a reduction in import duties on material needed for production. Yes, in theory we can reclaim duties on exports but what about products we manufacture and sell locally? Import duties are a major cash-flow hit for many companies. What about offering some sort of reasonable trade financing schemes? Otherwise, we have to raise prices and likely be uncompetitive in the export markets. Business lost = jobs lost.

In the log run, a simple "popularist" raise in salaries without some other scheme to support and sustain the raises is a recipe for disaster.

Well, in America conservatives think the answer is obvious. Raising the minimum wage means the cost of goods will rise, inflation will soar,employers will hire fewer low-wage people, and many jobs will be lost to lower-cost neighbors. The data and studies I've been able to find generally disagree, except those from right-wing "think-tanks." There are usually many exemptions to the minimum wage, not to mention that it's very hard to enforce so a lot of employers cheat anyway.

I don't think it's possible for the baht to weaken more than it is. The Bank of Thailand has been doing the best they can to keep it weak. This has been policy since the melt-down of 1997, the same as China, and for the reason they intend never to be again in the position where they have to go to the IMF, which was rightly seen as imposing demands on Thailand to open it up to looting by foreigners. Friends of mine speak of the days when the baht was 50 to the dollar; I was here then but don't remember it ever got that good. There is no way the baht is going to weaken that much in the foreseeable future, and I just hope the BoT continuew its policy of a weak baht, since my pension is in dollars (doing down, down, down).

In 1997, I remember the Thai baht was as "low" as 52 baht : 1 USD for 2 hours..... The BOT is trying to keep the baht weak.... Hmmm. I wonder how much was spent on this "shoring up" during the last 1.5 to 2 years? And how much was borrowed from the IMF / intl community to do so?

[Farang0tang]

What will be the knock on effect of raising the min. wage to 300? I mean, if small shops or restaurants now have to pay their staff more money then it is a sure bet that they will raise the price of their products/services hence possibly negating the effect of a salary increase. I am not an economist but aside from the effects on the manufacturing sector, there will surely be an knock-on effect on the local retail sector. The vast majority of businesses in Thailand are small family businesses and serve the local communities.

For those of us in the manufacturing sector, I can only hope that the government will come to its senses and if it raises salaries (which is fine) then it must help us to recoup the costs in some other way. Tax credits or perhaps a reduction in import duties on material needed for production. Yes, in theory we can reclaim duties on exports but what about products we manufacture and sell locally? Import duties are a major cash-flow hit for many companies. What about offering some sort of reasonable trade financing schemes? Otherwise, we have to raise prices and likely be uncompetitive in the export markets. Business lost = jobs lost.

In the log run, a simple "popularist" raise in salaries without some other scheme to support and sustain the raises is a recipe for disaster.

Well, in America conservatives think the answer is obvious. Raising the minimum wage means the cost of goods will rise, inflation will soar,employers will hire fewer low-wage people, and many jobs will be lost to lower-cost neighbors. The data and studies I've been able to find generally disagree, except those from right-wing "think-tanks." There are usually many exemptions to the minimum wage, not to mention that it's very hard to enforce so a lot of employers cheat anyway.

I don't think it's possible for the baht to weaken more than it is. The Bank of Thailand has been doing the best they can to keep it weak. This has been policy since the melt-down of 1997, the same as China, and for the reason they intend never to be again in the position where they have to go to the IMF, which was rightly seen as imposing demands on Thailand to open it up to looting by foreigners. Friends of mine speak of the days when the baht was 50 to the dollar; I was here then but don't remember it ever got that good. There is no way the baht is going to weaken that much in the foreseeable future, and I just hope the BoT continuew its policy of a weak baht, since my pension is in dollars (doing down, down, down).

errr? but the Baht is currently strong.

[dancw3]

I don't like Thaksin and believe the current Govt is a step backwards for THailand ...... But on this minimum wage issue ...

if they implement it (along with their other costly initiatives) ... it will probably bring inflation and a weakening of the Thai Baht ..... which should increase exports, etc etc etc ...

Yes of course prices for cooking oil, rice, sugar, oil and everything else etc will go up, but for the average laborer or construction worker he think's he's flush because he's making twice as much.

Also a significant weakening of the baht would help bail out the Govt's rice scheme.

Some number cruncher at the finance ministry only has to work out the formula, i.e. ..... if the baht falls to say 50 baht = 1 US$, then 300 baht ain't such a high wage for the multinationals that compete in this part of Asia.

Don't misunderstand me .... I think they are playing with fire and it's very risky for the economy when they make radical and sudden changes like this ... but run-away inflation or hyper inflation could indeed bail this Govt out re their campaign promises .... although it would be terrible for the country, although most people wouldn't understand this 'cause and effect' .... many would probably praise the Govt (and Thaksin) for ripping them off again.

All these complaint about raising the minimum wage remind me of the talk before minimum wage increases in the USA Every time an increase is considered, the business interests warn that it will result in inflation, lost j jobs etc. But there is no data to back up those arguments. There have been quite a few minimum wage increase in the USA and the data doesn't show that any of them resulted in inflation or lost jobs. If anything it appears that the economy has done better after each minimum wage increase. Businesses just don't like minimum wages or minimum wage increase, so they argue that there will be all these dire consequences, despite having no data to back it up, knowing not many people are going to ask about the data anyway.

[mdechgan]

Bottom line is if the minimum wage goes up business and factory owners have to put up and shell out more money on pay days.

[moe666]

Even at 300baht that is about 1.25 US an hour for 8 hour day, that is what my father made in the 1950s. Let them have the raise and see what happens, will it be inflation more money chasing fewer goods, or more money chasing more goods, no inflation.

Since the UAW has been brought in to the discussion, the unions have given up big time on wages the average wage is about 25 dollars an hour with new workers making 15 an hour entry level.

The one thing I find interesting in this 300baht thing is nothing being said about raising the wage over say a 2 or 3 year period which will difuse the increase over a period of time and make it easier for business to absorb the increase.

[BuffaloRescue]

The costo living has gone up by 3.8% in 10 years? I dont believe that for a minute. More like its gone up 50+%

[KKK]

300 baht/day would at todays prices seem fair to me. But what effect would this wage increase have on prices?

Could we be possibly heading for a wage increase = inflation = wage increase = inflation etc etc spiral that never ends.

[mic6ard]

What will be the knock on effect of raising the min. wage to 300? I mean, if small shops or restaurants now have to pay their staff more money then it is a sure bet that they will raise the price of their products/services hence possibly negating the effect of a salary increase. I am not an economist but aside from the effects on the manufacturing sector, there will surely be an knock-on effect on the local retail sector. The vast majority of businesses in Thailand are small family businesses and serve the local communities.

For those of us in the manufacturing sector, I can only hope that the government will come to its senses and if it raises salaries (which is fine) then it must help us to recoup the costs in some other way. Tax credits or perhaps a reduction in import duties on material needed for production. Yes, in theory we can reclaim duties on exports but what about products we manufacture and sell locally? Import duties are a major cash-flow hit for many companies. What about offering some sort of reasonable trade financing schemes? Otherwise, we have to raise prices and likely be uncompetitive in the export markets. Business lost = jobs lost.

In the log run, a simple "popularist" raise in salaries without some other scheme to support and sustain the raises is a recipe for disaster.

I totally agree with you there, and with regards to your questions about the recouping the differences, the gov't was mention reducing tax from 30% to 23% or somthing like that for businesses. Still I doubt that it'll make up the differences once the material costs goes up.

You are in the manufacturing sector, so of course you will take some of the impact, but I'm in the service sector which will have to cope with the increasing costs and is in direct contact with the customers. Right now I had to change my price 3 times this year alone.

I'm in chiang mai, where the min.wage is not that great, just under 200bht. When you guys increase your price, it's a nation wide thing, so I hope that the wage increase is nation wide, so the pricing is justified. Otherwise those area with lower min.wage would get killed by the increase in living costs. Or is the gov't going to put a price cap on certain goods within certain areas??? This is going to be a crazy time for businesses.

[otherstuff1957]

The costo living has gone up by 3.8% in 10 years? I dont believe that for a minute. More like its gone up 50+%

Reading the OP, I believe that they mean 3.8% per year, which would agree with other figures that I've heard. 3.8% per year would be about 50% inflation over 10 years.

[Crushdepth]

The costo living has gone up by 3.8% in 10 years? I dont believe that for a minute. More like its gone up 50+%

You have to make some allowances for crappy reporting. If it involves numbers or statistics, forget it.

[connor6063]

I doubt this will stick too well. I bet alot of people will continue to be payed under 300baht a day.

[connor6063]

I doubt this will stick too well. I bet alot of people will continue to be payed under 300baht a day.

While i was in pattaya i hung out with a few agogo girls for a while and their monthly salary was 3000 baht with 1 day off a week. So this increase would be big step for alot of people. Also would this apply to all types of work? Or only things like construction and factory jobs?