Thai Court Gives Green Light To Wage Hike

[Thaddeus]

And I bet the Department of Labour Protection and Welfare director-general Arthit Issamo is already thinking "oh crap, this was a really bad idea"

The worthy gentleman will probably regret at least this remark "Employees already earning higher than Bt300 will neither demand more nor stage wage protests"

It does come across like Davros saying 'you will obey'

As I have said many times, governments fiddling with economic factors that have nothing to do with them .... whooooops.... there goes the economy.

[rubl]

And I bet the Department of Labour Protection and Welfare director-general Arthit Issamo is already thinking "oh crap, this was a really bad idea"

The worthy gentleman will probably regret at least this remark "Employees already earning higher than Bt300 will neither demand more nor stage wage protests"

It does come across like Davros saying 'you will obey'

As I have said many times, governments fiddling with economic factors that have nothing to do with them .... whooooops.... there goes the economy.

Being from the Netherlands I may like government influence / gudance in economical issues a bit more than you. Still, all within reason, in open discussions, for the common good, etc., etc. Very close to Utopia, I must admit

[Thaddeus]

And I bet the Department of Labour Protection and Welfare director-general Arthit Issamo is already thinking "oh crap, this was a really bad idea"

The worthy gentleman will probably regret at least this remark "Employees already earning higher than Bt300 will neither demand more nor stage wage protests"

It does come across like Davros saying 'you will obey'

As I have said many times, governments fiddling with economic factors that have nothing to do with them .... whooooops.... there goes the economy.

Being from the Netherlands I may like government influence / gudance in economical issues a bit more than you. Still, all within reason, in open discussions, for the common good, etc., etc. Very close to Utopia, I must admit

Don't get me wrong my friend, I have no problem with any government giving advice or guidance to the private sector, but when they start to dictate how a business should be run just to score brownie points for themselves, they are way out of line.

Especially if the long term effects will be detrimental to not just that business but also its employees.

[Buchholz]

Higher Wage Feared to Drive Food Inflation Up

TMB Analytics expects food inflation to accelerate significantly to 13 percent after the new daily minimum wage of 300 baht is implemented.

TMB Bank's research center, TMB Analytics, launched its analysis on the impact of the government's planned daily minimum wage hike to 300 baht, which will go into effect in seven provinces on April 1.

TMB Analytics stated that this is the sharp increase of 40 percent in just one year and four months from the last pay rise in the beginning of last year. Each operator will be differently affected by the wage hike, depending on structure of each industry and their ability to pass on higher costs to customers.

It believes that operators may decide not to raise product prices to cover higher costs as doing so will make them less competitive compared to competitors in neighboring countries with lower wage costs and that could lead to a 20-percent drop in profit.

TMB Analytics has calculated that SMEs' labor cost accounts for about 16 percent of the total production cost. They are likely to be hardest hit by the wage increase as intense competition among them makes it difficult to raise prices. Labor cost for large-scale operators represents 13 percent of their total cost and they have better bargaining power on prices with customers.

The center's study found that every 100-baht rise in minimum wage would cause operators to bear the burden of 80 baht. Another 20 baht will be a burden on customers. However, the steep rise planned by the government could lead to a change to the ratio, especially to food prices.

In the first two months of this year, the food and beverage price index went up by 7.4 percent while the instant food price index rose by 9.2 percent compared to the same period last year. TMB Analytics is concerned that the higher pay would accelerate food inflation by four percent to 11 to 13 percent this year.

It also said that the wage hike in a short period of time would drive up the cost of living. Operators are not given time to adjust. They will have no choice but pass on the cost to customers. Ultimately, it will be customers who will be burdened by the higher cost.

Provinces across the country will see a maximum of 40 percent daily wage increase on April 1. The wage increase will be applied to the current minimum wage rate in each province.

-- Tan Network 2012-03-27