Across-The-Board Hike Of 40% Likely Today: Thailand Minimum Wage

[webfact]

MINIMUM-WAGE RISE

Across-the-board hike of 40% likely today

The Nation

Labour permanent secretary confident of Bt300 by 2013

The Central Wage Committee looks set to approve a 40-per-cent hike in the daily minimum wage across the country at its meeting today, according to the Labour Ministry's permanent secretary Somkiat Chayasriwong.

With the committee's approval, the significant pay raise will take effect on January 1.

Moreover, Somkiat said he was confident that the government would be able to push the daily minimum wage to Bt300 around the country by the start of 2013.

"I have already spoken to representatives of the government, the employers and the workers," he said.

During the recent election campaign, the Pheu Thai Party promised to immediately raise the daily minimum wage to Bt300 across the country. Since Pheu Thai now heads the government, labour organisations have been pushing hard for it to deliver on its promise. Leaders of labour organisations will call on Prime Minister Yingluck Shinawatra to discuss the matter on Friday.

In response to their planned visit, Somkiat said yesterday he was confident that they would listen to his explanation of the issues involved.

"I believe they will understand the impacts if we push for an immediate hike to Bt300 a day," he said.

As it is, relevant authorities are now preparing to ensure that affected small- and medium-sized enterprises have access to soft loans. The Social Security Office (SSO) board will soon be asked to grant Bt10 billion in soft loans to affected entrepreneurs via commercial banks, he said.

The SSO will charge commercial banks a 1-per-cent interest rate, and the banks will impose a 2.5-per-cent interest rate on the entrepreneurs. Only entrepreneurs participating in the social-security scheme can seek soft loans under this project. Those outside the social-security scheme will be able to seek soft loans from the Small Business Credit Guarantee Corporation's fund.

Somkiat said the government also proposed that the SSO reduce employers' contributions to the social security fund from 5 per cent to just 3.5 per cent of the amount equivalent to employees' salaries.

The maximum salary recognised by the scheme is no more than Bt15,000 a month.

Somkiat said the decrease would affect the amount of money allocated for employees' benefits in the event of illnesses, disabilities, childbirth and deaths.

"The drop in employers' contributions is just a temporary measure for about one or two years only. This is if the SSO board agrees and the Cabinet approves the plan," Somkiat said.

As for the government's contributions to the social-security scheme, Somkiat said it would be proposed that the government make up the 1.5-per-cent contribution the SSO would not longer receive from employers, and that this be directed to employees' benefits in the event of illnesses, disabilities, childbirth or deaths, to employees' benefits in the event of unemployment, and to pensions.

-- The Nation 2011-10-05

[whybother]

"I believe they will understand the impacts if we push for an immediate hike to Bt300 a day," he said.

Where were these impacts when 300 baht was promised "immediately" just 3 months ago?

[bhakta]

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

[whybother]

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

The cost of living in Thailand is very low. That's because and why the wages are very low.

[siampolee]

Somkiat said the decrease would affect the amount of money allocated for employees' benefits in the event of illnesses, disabilities, childbirth and deaths.

In reality the workforce are funding their own minimum wage and not the employers. Thus there should be no increase in the end consumer costs as reduced levies for the S.S.O. will counterbalance the increased wages payments.

Ah !! . Reality , something that the P.T.P. (Personal Thaksin Property) have no conception of.

Edited October 5, 2011 by siampolee

[bhakta]

Hmmm. "Cost of living is very low".. I personally beg to disagree, I find with the exception of some labor charges the cost of practically everything here is higher than it is in the United States, what to speak of nearby places like India, Cambodia, Laos, Vietnam, Burma, Bangladesh, etc. Check the cost of cars, trucks, petrol, clothing, and particularly food. Thailand was really a fabulous place 20-30 years ago when I first arrived, but it is not any real bargain any longer. Of course, life in the village where my wife is from, and life here in the city are different stories.

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

The cost of living in Thailand is very low. That's because and why the wages are very low.

[jackr]

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

The cost of living in Thailand is very low. That's because and why the wages are very low.

Low compared to what, North Korea? It's only low when you're low end, such as mediocre housing rental or dining out noodles on the street, but for anything of substance, such as quality food & wines, car imports, or mortgages and loans for vehicles, proper internet, it is the same, if not more, than the West. I agree with the post above yours, although those buying votes are clever as they know full well the masses are too stoopid to know what they're buying into.

[whybother]

Hmmm. "Cost of living is very low".. I personally beg to disagree, I find with the exception of some labor charges the cost of practically everything here is higher than it is in the United States, what to speak of nearby places like India, Cambodia, Laos, Vietnam, Burma, Bangladesh, etc. Check the cost of cars, trucks, petrol, clothing, and particularly food. Thailand was really a fabulous place 20-30 years ago when I first arrived, but it is not any real bargain any longer. Of course, life in the village where my wife is from, and life here in the city are different stories.

If the cost of living is so high in Thailand, how does anyone survive on $6 a day? In the west, that wouldn't even buy you a meal.

Yes, the cost of western foods and other goods are similar prices to the US or Aus, but the cost of labour is MUCH cheaper and that is reflected in the costs of services and locally made goods.

As an example, in Aus, it costs 100 baht to get into a taxi, and 50 baht per km. In Thailand, it costs 35 baht and about 5 baht per km. Public transport costs about 180 baht minimum in Melbourne, compared to as little as 10 baht here. Eating out is much cheaper here, mainly because the the staff are paid so little.

I'm not sure of the costs of ASEAN countries, but they would all be relative to the wages that are being paid there.

[whybother]

Low compared to what, North Korea? It's only low when you're low end, such as mediocre housing rental or dining out noodles on the street, but for anything of substance, such as quality food & wines, car imports, or mortgages and loans for vehicles, proper internet, it is the same, if not more, than the West. I agree with the post above yours, although those buying votes are clever as they know full well the masses are too stoopid to know what they're buying into.

Eating noodles off the street makes it extremely cheap, but even eating in restaurants is relatively cheap. Ofcourse, if you're wanting to eat imported foods, then you have to pay for that, but that's mostly due to import taxes.

I have proper internet here costing me 640 baht. It would cost me twice that in Aus.

I ate out last night at a reasonable restaurant - 800 baht for 2 people, including some beers. You wouldn't get that in the west.

[scorecard]

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

The cost of living in Thailand is very low. That's because and why the wages are very low.

It may be low for you, but to the large sector of Thais on survival wages the cost of living is very high and has been increasing.

[scorecard]

Hmmm. "Cost of living is very low".. I personally beg to disagree, I find with the exception of some labor charges the cost of practically everything here is higher than it is in the United States, what to speak of nearby places like India, Cambodia, Laos, Vietnam, Burma, Bangladesh, etc. Check the cost of cars, trucks, petrol, clothing, and particularly food. Thailand was really a fabulous place 20-30 years ago when I first arrived, but it is not any real bargain any longer. Of course, life in the village where my wife is from, and life here in the city are different stories.

If the cost of living is so high in Thailand, how does anyone survive on $6 a day? In the west, that wouldn't even buy you a meal.

Yes, the cost of western foods and other goods are similar prices to the US or Aus, but the cost of labour is MUCH cheaper and that is reflected in the costs of services and locally made goods.

As an example, in Aus, it costs 100 baht to get into a taxi, and 50 baht per km. In Thailand, it costs 35 baht and about 5 baht per km. Public transport costs about 180 baht minimum in Melbourne, compared to as little as 10 baht here. Eating out is much cheaper here, mainly because the the staff are paid so little.

I'm not sure of the costs of ASEAN countries, but they would all be relative to the wages that are being paid there.

None of your comparisons make any sense.

The bottom line is that a large percentage of the Thai populace so just survive on $6.00 a day. I repeat 'just survive'. In the main they have very sub-standard housing, they eat / share very simple meals, they have very limited clothing etc. They have to watch every Baht because there is no back.

Not nice, but it's the reality of the situation.

[whybother]

None of your comparisons make any sense.

The bottom line is that a large percentage of the Thai populace so just survive on $6.00 a day. I repeat 'just survive'. In the main they have very sub-standard housing, they eat / share very simple meals, they have very limited clothing etc. They have to watch every Baht because there is no back.

Not nice, but it's the reality of the situation.

That's my point. They survive.

I'm not saying it's a good thing, but the fact is there is no chance of them surviving on $6 a day in the west because the cost of living is much higher there.

[OzMick]

Employers want the B300 to include overtime. How many hours / day do you have to work to get B300? Pick a number between 10 and 24.

OR sorry, no overtime today, wages reduced proportionately.

And how does reducing SS contributions by 1.5% of salary do much to offset a 40+% salary increase? All it will do is maintain roughly the same contributions to the scheme.

Pay B200 SS @ 5% = B10

Pay B280 SS @ 3.5 % = B9.8

[pedro01]

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

The cost of living in Thailand is very low. That's because and why the wages are very low.

Low compared to what, North Korea? It's only low when you're low end, such as mediocre housing rental or dining out noodles on the street, but for anything of substance, such as quality food & wines, car imports, or mortgages and loans for vehicles, proper internet, it is the same, if not more, than the West. I agree with the post above yours, although those buying votes are clever as they know full well the masses are too stoopid to know what they're buying into.

Economies of scale.

The products you talk of are consumed in much lower quantities here and so their unit price is higher.

When Somchai the building labourer starts quaffing Chateauneuf Du Pape with his friends at lunch time, you can be assured the price will drop.

[terryp]

No further increases for 3 YEARS...these people must be insane to agree to this or just plain stupid.

Thailand the Inflation free Hub///...just look at basic Food prices over the past 12 months

[jalansanitwong]

The minimum wage deal is a nonense anyway. Wealthy employers pay their staff what they want expecially to upcountry or Burmese workers. Monthly pay minus board and rice 3,500 baht /month or 120 day !!! In Bangkok jewelry industry. Now we all know why its so easy for foreign men to come to Thailand and marry a local 'farm girl'.

Girls dont want to work in factories anymore. Go to Pattaya,Hua Hin or Phuket and find an old farang with a good heart (lots of money) and marry him. He will buy houses and o/seas travel. There is no comparison. Thailand is turning into the worlds biggest wife procurement centre.

[DP25]

So the definition of minimum wage changed to include living expenses and other compensation. What a surprise Somchai factory worker, with the cost of your dormitory, meals, and transportation to the factory you're already making 300 per day!

[siampolee]

I ate out last night at a reasonable restaurant - 800 baht for 2 people, including some beers. You wouldn't get that in the west.

At a daily wage of 300baht the 800 baht equates to two and two thirds days of work.

We are in case you hadn't noticed not in the West either.

With all due respect I am inclined to think, nay believe that you have little or no contact with Mr. and Mrs. Somchai who make up the average Thai workforce, let alone their lifestyle

Edited October 5, 2011 by metisdead
30) Do not modify someone else's post in your quoted reply, either with font or color changes.

[KRS1]

Hmmm. "Cost of living is very low".. I personally beg to disagree, I find with the exception of some labor charges the cost of practically everything here is higher than it is in the United States, what to speak of nearby places like India, Cambodia, Laos, Vietnam, Burma, Bangladesh, etc. Check the cost of cars, trucks, petrol, clothing, and particularly food. Thailand was really a fabulous place 20-30 years ago when I first arrived, but it is not any real bargain any longer. Of course, life in the village where my wife is from, and life here in the city are different stories.

Totally incorrect, Thailand was not designed for foreigners (except for sukhumvit) Thailand is designed for Thais and priced accordingly. There's a Thailand outside of BKK while overpriced western amenities arent the standard for Thais, and why should it be? There are products which are every bit as good as the overpriced objects you are eluding to being overpriced, youre simply a victim of English speaking marketing tactics engineered to extract money from you by design.

I've been to Cambodia, and its very clear that you have never been there. Cambodia is much much more expensive than Thailand, a bowl of street noodles is literally 2-3 times as much, bottle of Johnny $100 in a club, company for the night same price. Cambodia is an overpriced shithole that was booming and drove up prices, while a small group reaped the benefits.

[siampolee]

Cambodia is an overpriced shithole that was booming and drove up prices, while a small group reaped the benefits.

No wonder Thaksin and Hun Sen are bosom buddies.

Buy off the man in the street and when the man in the street realises his folly he is to late he, has castrated himself by the selling of his soul to Thaksin and his cronies.

300 baht a day, a wonderful bargain especially when the people receiving the money are actually funding their own debt bondage.Thaksin must have studied Ponzi and Madoff methods ind depth.

Edited October 5, 2011 by siampolee

[Bakseedaa]

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

Another Big effect of this policy will be mass layoffs of workers... and heavier workloads for those stil lucky enough to have a job. One of my friends is now in the process of closing his Bangkok factory and moving to Jakarta.He told me the coming pay rise is the last straw... All good for us remaining Farangs, more bahts to our dollars and more young girls for our bahts as daughters flood to Bangkok to find work in the bars.... Miracle Thailand... Thank you Mr Thaksin...

[Bakseedaa]

Hmmm. "Cost of living is very low".. I personally beg to disagree, I find with the exception of some labor charges the cost of practically everything here is higher than it is in the United States, what to speak of nearby places like India, Cambodia, Laos, Vietnam, Burma, Bangladesh, etc. Check the cost of cars, trucks, petrol, clothing, and particularly food. Thailand was really a fabulous place 20-30 years ago when I first arrived, but it is not any real bargain any longer. Of course, life in the village where my wife is from, and life here in the city are different stories.

If the cost of living is so high in Thailand, how does anyone survive on $6 a day? In the west, that wouldn't even buy you a meal.

Yes, the cost of western foods and other goods are similar prices to the US or Aus, but the cost of labour is MUCH cheaper and that is reflected in the costs of services and locally made goods.

As an example, in Aus, it costs 100 baht to get into a taxi, and 50 baht per km. In Thailand, it costs 35 baht and about 5 baht per km. Public transport costs about 180 baht minimum in Melbourne, compared to as little as 10 baht here. Eating out is much cheaper here, mainly because the the staff are paid so little.

I'm not sure of the costs of ASEAN countries, but they would all be relative to the wages that are being paid there.

Yes whybother , thats good for Taxis , but if you want a lifestyle such as we have when at home in the west, its damned expensive here in Thailand and impossible to have anywhere but Bangkok... so, if you want to come here and live like a Thai... you are onto a good thing... but to keep up a reasonable lifestyle ... expensive..!!!

[lovelomsak]

None of your comparisons make any sense.

The bottom line is that a large percentage of the Thai populace so just survive on $6.00 a day. I repeat 'just survive'. In the main they have very sub-standard housing, they eat / share very simple meals, they have very limited clothing etc. They have to watch every Baht because there is no back.

Not nice, but it's the reality of the situation.

That's my point. They survive.

I'm not saying it's a good thing, but the fact is there is no chance of them surviving on $6 a day in the west because the cost of living is much higher there.

You are right there is no chance of survival on $6 in the west. In the west we also have social assistance to the point poor uneducated ,unemployed live better than hard working Thais in their own country.

But the people surving on $6 here are gathering food from the jungle(vegetables mostly just green leaves off plants}. Eat stickyrice grown by themselves or relatives,with the vegetables and nam phit(smashed up chillies with fish bits in it). The whole family sleeping on the floor in one room.and being eaten by bugs and mosquitoes. These people cannot even afford noodles.

So you see no need for these people to have a better life? I would like to see how long you could last at that level with out wanting a little more from life.

[whybother]

I ate out last night at a reasonable restaurant - 800 baht for 2 people, including some beers. You wouldn't get that in the west.

At a daily wage of 300baht the 800 baht equates to two and two thirds days of work.

We are in case you hadn't noticed not in the West either.

With all due respect I am inclined to think, nay believe that you have little or no contact with Mr. and Mrs. Somchai who make up the average Thai workforce, let alone their lifestyle

I am not trying to suggest that Mr & Mrs Somchai can afford that. I am making a comparison between the cost of living in Thailand and the west.

You would probably find that someone on minimum wage in the west couldn't go out and have a similar meal there. It would cost much more than $25.

[Bakseedaa]

I ate out last night at a reasonable restaurant - 800 baht for 2 people, including some beers. You wouldn't get that in the west.

At a daily wage of 300baht the 800 baht equates to two and two thirds days of work.

We are in case you hadn't noticed not in the West either.

With all due respect I am inclined to think, nay believe that you have little or no contact with Mr. and Mrs. Somchai who make up the average Thai workforce, let alone their lifestyle

I ate out last night at the Penninsula Hotel, 3000 bahts for the buffet for 2 peoples, +1300 bahts for a reasonable red wine, free transport accross the river... about the same I pay in New York... what did you eat for 800 bahts.. native cusine no doubt..? Thats ok if its why you came to Thailand... and if your partner is from a poor Thai area.. But if you want to keep some class in your life, Bangkok is not cheap anymore.. only Singapore in Asia is more expensive. But probabaly worth it...

[zorro1]

Hmmm. "Cost of living is very low".. I personally beg to disagree, I find with the exception of some labor charges the cost of practically everything here is higher than it is in the United States, what to speak of nearby places like India, Cambodia, Laos, Vietnam, Burma, Bangladesh, etc. Check the cost of cars, trucks, petrol, clothing, and particularly food. Thailand was really a fabulous place 20-30 years ago when I first arrived, but it is not any real bargain any longer. Of course, life in the village where my wife is from, and life here in the city are different stories.

Totally incorrect, Thailand was not designed for foreigners (except for sukhumvit) Thailand is designed for Thais and priced accordingly. There's a Thailand outside of BKK while overpriced western amenities arent the standard for Thais, and why should it be? There are products which are every bit as good as the overpriced objects you are eluding to being overpriced, youre simply a victim of English speaking marketing tactics engineered to extract money from you by design.

I've been to Cambodia, and its very clear that you have never been there. Cambodia is much much more expensive than Thailand, a bowl of street noodles is literally 2-3 times as much, bottle of Johnny $100 in a club, company for the night same price. Cambodia is an overpriced shithole that was booming and drove up prices, while a small group reaped the benefits.

'$100 in a club, company for the night same price"

Sorry but your the one being screwed

[whybother]

You are right there is no chance of survival on $6 in the west. In the west we also have social assistance to the point poor uneducated ,unemployed live better than hard working Thais in their own country.

But the people surving on $6 here are gathering food from the jungle(vegetables mostly just green leaves off plants}. Eat stickyrice grown by themselves or relatives,with the vegetables and nam phit(smashed up chillies with fish bits in it). The whole family sleeping on the floor in one room.and being eaten by bugs and mosquitoes. These people cannot even afford noodles.

So you see no need for these people to have a better life? I would like to see how long you could last at that level with out wanting a little more from life.

OMG ... where have I said that these people shouldn't have more? Where have I said that the people on minimum wage are not doing it tough? But do you think the poor in the west have it easy?

All I have said is that it is more expensive to live in the west. And that, IMO, is mainly because wages are much higher.

[thaicbr]

Hmmm. "Cost of living is very low".. I personally beg to disagree, I find with the exception of some labor charges the cost of practically everything here is higher than it is in the United States, what to speak of nearby places like India, Cambodia, Laos, Vietnam, Burma, Bangladesh, etc. Check the cost of cars, trucks, petrol, clothing, and particularly food. Thailand was really a fabulous place 20-30 years ago when I first arrived, but it is not any real bargain any longer. Of course, life in the village where my wife is from, and life here in the city are different stories.

Okay, they raise the wages for the people who a making the things we need, hence the producers must simultaneously raise the price of their products, hence the net benefit to the workers will be nothing, but the government will certainly increase its revenue as the amount of VAT collected increases, along with all other taxes. It seems people interested in buying votes, do not think these matters through very well. The only net affect will be everything in Thailand becomes more costly, as though the cost of living here is not high enough today.

The cost of living in Thailand is very low. That's because and why the wages are very low.

You can not use the US as a guide. It is the country with the cheapest consumer goods in the world, pretty much EVERYTHING is cheaper than EVERYWHERE.

[kutjebu]

Low compared to what, North Korea? It's only low when you're low end, such as mediocre housing rental or dining out noodles on the street, but for anything of substance, such as quality food & wines, car imports, or mortgages and loans for vehicles, proper internet, it is the same, if not more, than the West. I agree with the post above yours, although those buying votes are clever as they know full well the masses are too stoopid to know what they're buying into.

Eating noodles off the street makes it extremely cheap, but even eating in restaurants is relatively cheap. Ofcourse, if you're wanting to eat imported foods, then you have to pay for that, but that's mostly due to import taxes.

I have proper internet here costing me 640 baht. It would cost me twice that in Aus.

I ate out last night at a reasonable restaurant - 800 baht for 2 people, including some beers. You wouldn't get that in the west.

For you and me is that cheap.But not when you got 300 baht a day.Try one week to live from that.Pay your house rent,maybe motorbike,food,pay fot your children etc.

[Steely Dan]

No further increases for 3 YEARS...these people must be insane to agree to this or just plain stupid.

Thailand the Inflation free Hub///...just look at basic Food prices over the past 12 months

This is it in a nutshell. The 'success' of the minimum wage implementation will be directly proportional to the decline in the buying power of the Baht. Note that exchange rate fluctuations are an excellent way of hiding inflation so imported goods should get even more expensive, but for westerners with most of their savings offshore any increase in the price of local goods should be offset by getting more baht for your dollar/Euro or whatever.