Better Skills Will Make Bt300 Wage Worth It: Thai Labour Ministry

[webfact]

Better skills will make Bt300 wage worth it

By The Nation

In order to make Bt300 daily minimum wage fair on employers, a skill-enhancement exercise and evaluation strategies should be put in place in large provinces before the hike can take effect nationwide, the Labour Ministry told a Bangkok seminar yesterday.

Workers and employers should try to make compromises in the meantime because the higher wages will possibly burden employers and likely force tens of thousands of small businesses to immediately close down, permanent secretary Somkiat Chayasriwong said. Therefore, he added, skill enhancement and evaluation should become part of the national agenda and be implemented throughout 2012.

The Bt300 daily wage should then be introduced in Bangkok in 2013 and in other large cities before it is extended to the rest of the country, he said. The Labour Ministry will propose to the government that it tentatively make 2012 the "year of increased productivity" and make skill enhancement and evaluation part of the national agenda.

"More skilled labour will make employers feel it is worthwhile having to shoulder higher expenses because they will get better returns," he added.

A budget of Bt3 billion is being sought to improve the ministry's 12 skill-development institutes and 65 provincial skill-training centres. More emphasis will be placed on regional centres to develop labourers' skills in relevant fields, such as planting and producing rubber in Region 12 based in Songkhla, and in the assembly of vehicles and machinery in Region 1 based in Samut Prakan.

Under a planned joint cooperation between the Labour Ministry and waterworks and electricity agencies, small- and medium enterprises that agree to pay a daily wage of Bt300 to workers who undergo training will be given discounts in utilities as well as tax incentives, he said.

Asst Prof Wichai Thosuwannajinda from Kasem Bundit University (KBU) said government subsidies for SMEs should be a short-term measure because it would not be fair to taxpayers.

He said another populist policy guaranteeing that every university graduate would make a minimum monthly salary of Bt15,000 would result in fewer students studying arts and humanities and more focusing on skills needed in the employment market.

Anusorn Thamjai, dean of KBU's Economics Faculty, said he was all for increasing the daily wage to Bt300 because it would lift the standard of living and help cut down problems associated with poverty. He called for cost-related incentives for SMEs and government-assisted improvement of logistical structure for them.

Meanwhile, a clay-doll factory with no labour union in Nakhon Pathom is planning to cut down on work incentives and meal subsidies once it starts paying the Bt300 daily wage, local labour counsellor Daorueng Chanok said.

-- The Nation 2011-09-08

[patjem]

Ain't gonna work, for a long time yet until the education system has been fixed first.

[siampolee]

Under a planned joint cooperation between the Labour Ministry and waterworks and electricity agencies, small- and medium enterprises that agree to pay a daily wage of Bt300 to workers who undergo training will be given discounts in utilities as well as tax incentives, he said.

Where might the funds be coming from to fund this particular farce ?

Possibly it's a case of, "up goes your income and being only a little person you pay more tax," unlike the big people who ignore taxation totally courtesy of the revenue department as has been so plainly seen of late..

Beware P.T.P. the worm will turn.

[whybother]

Under a planned joint cooperation between the Labour Ministry and waterworks and electricity agencies, small- and medium enterprises that agree to pay a daily wage of Bt300 to workers who undergo training will be given discounts in utilities as well as tax incentives, he said.

Where might the funds be coming from to fund this particular farce ?

Possibly it's a case of, "up goes your income and being only a little person you pay more tax," unlike the big people who ignore taxation totally courtesy of the revenue department as has been so plainly seen of late..

Beware P.T.P. the worm will turn.

More to the point, what tax incentives can you give someone that doesn't pay tax?

[Thai at Heart]

Most of the people on minimum wage are performing jobs that require very little skill for which there hasn't or never will be a machine invented to replace. It is a very sad state of affairs that labour intensive industry has been allowed to continue to dominate politically, so that the minimum wage has barely been ratcheted up to keep in touch with inflation for a very very long time.

Now the cat is out of the bag with even so called "academics" saying it is statistically justified to raise it, which will cause a huge shock to the system. All it would have taken would have been for any of the last governments to pass a law that the minimum wage must raise every year by inflation + a given percentage. This would have given companies a chance to plan around it, eventually close or move. What they have now, is that the owners of these companies have been able to make excessive profits, and they are bitching like crazy about the raise in wages.

Just imagine if the wages had simply been going up by a reasonable rate every year. Factories would have relocated out of the higher priced areas to the cheaper ones up country, companies would have invested in more technology to increase efficiency etc etc. The whole thing would have been handled in a much more orderly fashion. Instead, the low minimum wage has become the cornerstone of the business plan of many companies.

Raising skill sets and and creating or attracting companies into the country to absorb these new skills takes years, not weeks.

[bushwacker]

I like this idea of increased the skill level. Of course if you increase the skill level then you need less people so many will loose their jobs. If this works then in the future when I walk around Lotus instead of seeing 40 workers picking their noses, pimples and ass maybe I will only see 15. I wonder how happy the 25 newly unemployed are politically going to feel?

[scorecard]

Increased skill levels / skill enhancement. Nice words but totally hollow.

Government run 'skill enhancement' programs have been suggested / conducted many times before, all a total waste of money.

- Too many government people creating rules (for the skill enhancement program), processes, procedures, multiple forms to be completed.

- Large percentage of people who might benefit can't attend because they have to go to work.

- Lack of focus in the programs, lack of quality content, lack of quality presenters / teachers.

and the list goes on.

And of course, the funds all used but with holes in the transparency of where the money went.

In the meantime pt has no policy whatever to change the big picture so that a large percentage of all Thais gain a better quality of life through their own productivity.

treading water at best.

[timber]

I like this idea of increased the skill level. Of course if you increase the skill level then you need less people so many will loose their jobs. If this works then in the future when I walk around Lotus instead of seeing 40 workers picking their noses, pimples and ass maybe I will only see 15. I wonder how happy the 25 newly unemployed are politically going to feel?

I think this point is pretty significant. In going to a lot of big construction

orientated stores if the people on the floor knew what they were selling

and how to sell they would need 50 to 75% less staff on the floor. I would

think that when wages become higher they stores will simply cut back on

staff. There are a lot of improvement to sales in the store that can cut

back on the amount of staff on the floor. Although, inventory control would

pay the increase also. But, the first step is cut back staff.

[OzMick]

I'm very interested to know what skill enhancement courses will be offered, and how they will increase the productivity of floor sweepers, check out operators, rice planters........................and all the other no-brainer jobs that are paid minimum wage

[scorecard]

I'm very interested to know what skill enhancement courses will be offered, and how they will increase the productivity of floor sweepers, check out operators, rice planters........................and all the other no-brainer jobs that are paid minimum wage

The list of 'skill areas' which have connection wages which would come up to the 300Baht mark is hundreds.

A course for every 'skill area'? somehow it all seems impossible.

[quiksilva]

I can see the argument, higher wages will lead certainly to redundancies and less recruitment, but if those who have lost their jobs are given the skills which industry is currently short of it and requires, it could help move Thailand further up the value chain.

The fact is Thailand's not insignificant manufacturing sector is still mostly low skilled labour intensive assembly work, even in the high tech sectors, where the real magic happens overseas.

You can't just turn this around overnight, sure they could bring in more automation but manufacturers had that option in their home countries before they left to set up their factories here.

Also even if it happened who exactly will be doing all this training, who is training the trainers, where will this happen, and how much will it all cost?

Edited September 8, 2011 by quiksilva

[scorecard]

Under a planned joint cooperation between the Labour Ministry and waterworks and electricity agencies, small- and medium enterprises that agree to pay a daily wage of Bt300 to workers who undergo training will be given discounts in utilities as well as tax incentives, he said.

Where might the funds be coming from to fund this particular farce ?

Possibly it's a case of, "up goes your income and being only a little person you pay more tax," unlike the big people who ignore taxation totally courtesy of the revenue department as has been so plainly seen of late..

Beware P.T.P. the worm will turn.

More to the point, what tax incentives can you give someone that doesn't pay tax?

Plus, another budget for someone to get their sticky fingers into.

[Payboy]

I'm very interested to know what skill enhancement courses will be offered, and how they will increase the productivity of floor sweepers, check out operators, rice planters........................and all the other no-brainer jobs that are paid minimum wage

Guess we need to start with an iPad for each unskilled worker.

[jamora]

It's about time that someone starts to focus on increasing Thai labor productivity. Over the past decade, Thai wages have annually grown by nearly one percent more than productivity, and for Thailand to be able to stay competitive towards other regional low-cost countries, such as India, Philippines and Sri Lanka, they have to do something. An instant wage hike to 300Baht, would pretty much put Thailand in the bottom of the entire region, when it comes to productivity/wage ratio!

Edited September 8, 2011 by jamora

[mic6ard]

People are talking about incentives, be it tax or reduce utilities bills, but would that actually be enough to cover the increase in wages??

I would like to see some one come up with realistic numbers if only to reassure the SMEs that the incentives will make up the differences.

[Pib]

Sounds like the PTP is now devising a Bt300 minimum wage implementation policy/strategy that will take a long time to implement, with lot of head fakes, smoke-and-mirors, etc., along the way....but a full implementation/goal reached date of 6 months before the next election. Election promoise kept (just late)...vote for the PTP again!

[puipuitom]

Ain't gonna work, for a long time yet until the education system has been fixed first.

AND.. the Thai's learnt to take any decission, use their own eyes and brains, and do one step more as their boss orders them to do..

Now, if an order confirmation is sent in, like: 1 x fcl.. NO THAI is able to find out, after shipping a 20 years a 150 containers a year, how much can be loaded in a container as.. never went out of the office to see 250 mtrs away, how much actually can be loaded.

normally standard 1700 crt x 3 kg =5,4 tons , but now different packed....1500 kg or.. or.. 10,5 tons or .. 21 tons. NO IDEA !

OR.. calls herself export manager.. already 7 x at SIAL (Paris) / ANUGA ( Cologne) food exhibition ( every second year), so.. over 15 years in that job.

But.. only saw.. exhibution booth, bus from hotel to exhibition field and back, and airport.

NEVER any booth of non-Thai competitors, never any shop or office or distribution centre of a customer abroad. NOTHING. NO idea.. Never saw anything abroad except out of the windows of a bus, hotel, plane.

Compare that with a Chinese exporter: 2 persons 1 week to UK, 2 other to Germany, 2 other to France, 2 other to NL + Belgium. All back to Paris, evaluate, mix up in persons, and go back one week to verify, find answers for raised questions, visit potential customers etc., buy a LOT of samples to evaluate back home in China.

Thais... buy only some "tax free" items at the airport when they fly home, exactly the evenig of the last day, as.. just imagine, his emperial whisdom, her indefinite cleverness, called ZHE BOZZ, has to pay 12 hours overtime..

[Oberkommando]

I have a wise and very rich Chinese-Thai friend that has a several businesses in Thailand as well as other countries. He pays all of his Thai employees the bare minimum except for a few middle management people. I asked him if he could increase productivity among his workforce by paying them a better wage. "There's no point" was his answer, "they are not going to try to improve themselves or work harder". His solution to increasing productivity is simply to hire more Thais to do more work. "They are not worth the investment" was his final word on the matter.

[samtam]

I have a Thai friend who runs a small business emlpoying about 15 people. By being forced to pay THB300 minimum to these people he would have to increase the price of his goods by about 30%. He will either go out of business, or his business and others who do the same will have an incredible effect on inflation. I don't think anyone thought this through, (and through).

[Pib]

I have a Thai friend who runs a small business emlpoying about 15 people. By being forced to pay THB300 minimum to these people he would have to increase the price of his goods by about 30%. He will either go out of business, or his business and others who do the same will have an incredible effect on inflation. I don't think anyone thought this through, (and through).

Oh, the PTP thought it through. 1 business owner equals possibly 1 vote for the PTP or 15 employees equals possibly 15 votes for the PTP. That's what you call "how to get elected math."

[wintermute]

If you walk into some place like Central dept store in Thailand and observe what the staff are doing at any given moment it's hard to justify even paying Thai staff what they are currently making. It's going to be interesting to see how the businesses compensate for the 300 bt wage hike. I imagine it's unenforceable in the long run. It's either that or run the place on barebones staff (not gonna happen) or replace everyone with Burmese (more likely.)

[pastitche]

Increased skill levels / skill enhancement. Nice words but totally hollow.

Government run 'skill enhancement' programs have been suggested / conducted many times before, all a total waste of money.

- Too many government people creating rules (for the skill enhancement program), processes, procedures, multiple forms to be completed.

- Large percentage of people who might benefit can't attend because they have to go to work.

- Lack of focus in the programs, lack of quality content, lack of quality presenters / teachers.

and the list goes on.

And of course, the funds all used but with holes in the transparency of where the money went.

In the meantime pt has no policy whatever to change the big picture so that a large percentage of all Thais gain a better quality of life through their own productivity.

treading water at best.

A very interesting rant but where is the evidence other than your own (possibly prejudiced opinion)?

[Oberkommando]

Increased skill levels / skill enhancement. Nice words but totally hollow.

Government run 'skill enhancement' programs have been suggested / conducted many times before, all a total waste of money.

- Too many government people creating rules (for the skill enhancement program), processes, procedures, multiple forms to be completed.

- Large percentage of people who might benefit can't attend because they have to go to work.

- Lack of focus in the programs, lack of quality content, lack of quality presenters / teachers.

and the list goes on.

And of course, the funds all used but with holes in the transparency of where the money went.

In the meantime pt has no policy whatever to change the big picture so that a large percentage of all Thais gain a better quality of life through their own productivity.

treading water at best.

A very interesting rant but where is the evidence other than your own (possibly prejudiced opinion)?

To be fair it's a spot on assessment.

[cardholder]

Increased skill levels / skill enhancement. Nice words but totally hollow.

Government run 'skill enhancement' programs have been suggested / conducted many times before, all a total waste of money.

- Too many government people creating rules (for the skill enhancement program), processes, procedures, multiple forms to be completed.

- Large percentage of people who might benefit can't attend because they have to go to work.

- Lack of focus in the programs, lack of quality content, lack of quality presenters / teachers.

and the list goes on.

And of course, the funds all used but with holes in the transparency of where the money went.

In the meantime pt has no policy whatever to change the big picture so that a large percentage of all Thais gain a better quality of life through their own productivity.

treading water at best.

A very interesting rant but where is the evidence other than your own (possibly prejudiced opinion)?

To be fair it's a spot on assessment.

As indeed was your post #18.

It is like printing money and changing the face value of the note from 180 Baht to 300 Baht - you have gained nothing, simply raised the bar.

[12DrinkMore]

To be fair it's a spot on assessment.

Yes, quite sad, but true.

The interesting question is why?

I could write a huge post on this, but I don't have the time.

But I'll take your post above

I have a wise and very rich Chinese-Thai friend that has a several businesses in Thailand as well as other countries. He pays all of his Thai employees the bare minimum except for a few middle management people. I asked him if he could increase productivity among his workforce by paying them a better wage. "There's no point" was his answer, "they are not going to try to improve themselves or work harder". His solution to increasing productivity is simply to hire more Thais to do more work. "They are not worth the investment" was his final word on the matter.

I disagree partly with his statement, as I know several Thais, that have been given then opportunity, have worked hard to improve themselves and work harder.

But this then creates an issue for the Chinese business owners, who do not want to see their money disappearing into the pockets of the Thais, but would rather have it spent on educating their own children in the US and Australia and, of course, supporting their own lifestyle and amassing large numbers in their bank accounts.

And they would not be able to afford housekeepers, gardeners, drivers and have someone fill up their fuel tank, further impacting on their rather pleasant lifestyle, which is essentially far better than the wealthy of Europe.

I believe that this is also tied into the rents charged for workers' accommodation, the rents are cheap and often, IMO, do not reflect the price of the land. But if the rents were raised, then the salaries would have to be raised, impinging on the business profits. Whereas at the moment they can take on cheap labour and also book the land price inflation. In some way I guess there is some social function in all this, the rich provide cheap accommodation to allow the low cost employees somewhere to live.

A sort of updated serfdom.

Edited September 8, 2011 by 12DrinkMore

[letitbe]

Ain't gonna work, for a long time yet until the education system has been fixed first.

spot on you dont fix low skill level by raising wages. I do agree with the minimum wage if country can afford it. But maybe to pay for it they should start getting taxes from those better off. Not a chance since getting that would mean hurting elite For example why does no one here pay tax on rental income or nearly no one. Simple because rich thais own a lot of property they let out. Why no property tax which was proposed and tried to be implemented by Dems. Simple elite would suffer and thats all of current clan in power. No one here seems to have any idea of using their brains to solve a problem. Schools here just dont teach problem solving skills and culture does not let people try because if they do and it goes wrong they loose face. I have yet to met a thai who ever comes up with a solution to a problem other than dont know. Its very depressing and why they will probably never earn any proper money. That and it suits those at top to keep those under totally unable to improve their skill level. i do however believe someone who works hard deserves 300 baht a day. We pay our maid well over that and our gardener but then they would deserve much much more and although they only really do manual jobs are far more able than most of so called Thais with useless degrees. Thais and forang berate us for paying what we do but I counter with why not we can afford it and thery deserve a decent life. I would not say that about most of work shy who just loaf around with no spirit or care for doing a decent days work. I could also say much same for a lot in west.

[Pib]

If you walk into some place like Central dept store in Thailand and observe what the staff are doing at any given moment it's hard to justify even paying Thai staff what they are currently making. It's going to be interesting to see how the businesses compensate for the 300 bt wage hike. I imagine it's unenforceable in the long run. It's either that or run the place on barebones staff (not gonna happen) or replace everyone with Burmese (more likely.)

Sounds like when you walk into a HomePro, Lotus or many other large Thai stores...Many, many sales assistants standing around watching the customers. That is the sales assistants job, to stand around and look at the customers, right? OK, I'm being harsh, occassionally one does come over to ask if they can provide assistance.

[samtam]

To be fair it's a spot on assessment.

Yes, quite sad, but true.

The interesting question is why?

I could write a huge post on this, but I don't have the time.

But I'll take your post above

I have a wise and very rich Chinese-Thai friend that has a several businesses in Thailand as well as other countries. He pays all of his Thai employees the bare minimum except for a few middle management people. I asked him if he could increase productivity among his workforce by paying them a better wage. "There's no point" was his answer, "they are not going to try to improve themselves or work harder". His solution to increasing productivity is simply to hire more Thais to do more work. "They are not worth the investment" was his final word on the matter.

I disagree partly with his statement, as I know several Thais, that have been given then opportunity, have worked hard to improve themselves and work harder.

But this then creates an issue for the Chinese business owners, who do not want to see their money disappearing into the pockets of the Thais, but would rather have it spent on educating their own children in the US and Australia and, of course, supporting their own lifestyle and amassing large numbers in their bank accounts.

And they would not be able to afford housekeepers, gardeners, drivers and have someone fill up their fuel tank, further impacting on their rather pleasant lifestyle, which is essentially far better than the wealthy of Europe.

I believe that this is also tied into the rents charged for workers' accommodation, the rents are cheap and often, IMO, do not reflect the price of the land. But if the rents were raised, then the salaries would have to be raised, impinging on the business profits. Whereas at the moment they can take on cheap labour and also book the land price inflation. In some way I guess there is some social function in all this, the rich provide cheap accommodation to allow the low cost employees somewhere to live.

A sort of updated serfdom.

I have heard about this quite strong dislike of Sino-Thais recently. One wonders whether there will ever be any backlash against the Sino-Thai families, or whether they are too integrated. As we know Malaysia has huge racial problems, which appear to be worsening. Here they are masked as (socio economic) class issues, (as in rich vs. poor), but perhaps they are racial too. Certainly some of the Sino-Thais I have met are anti-farang, (perhaps fearing their threat of intelligent thought), and they are extremely arrogant.

[elgato]

Next thing you know it will be mandatory to attend secondary school

Edited September 9, 2011 by elgato