Wage Rise Will Sink 10 pct Of SMEs: Thai Chamber Of Commerce

[geriatrickid]

Actually you are completely wrong here and this is out of context. When you let the MARKET decide what to pay workers, better quality workers will gravitate to higher paying employers. However, the current government policy, just put the cart before the horse, i.e. used the law to implement minimum wage without investing anything into education or taking any steps to improve labor productivity. Since it is now a level playing field, the above no longer applies.

I believe that you are unfair. Much of the country's agriculture industry is mechanized and has high productivity. Hard to believe I know because everyone thinks rice is grown on small plots in Surin and Issan. The poultry business is big business in Thailand and I suggest you visit some of the facilities. Same for rice. Not all rice is grown on small plots. There are some big modern operations. Thailand could not achieve the results it has with rice yields if it had not modernized long ago. Have a look at some of the major fish exporters. A good example is the tuna canning facilities. Look at a can of tuna available in a western store: Product of Thailand.

Yes, I know that Thailand's education system gets slammed alot. However, in comparison to its neighbours of Burma, Laos, Cambodia and Vietnam it is still much better. Thai skilled labour gets high marks in this region. Thailand has its problems/weaknesses, but it is still a regional powerhouse.

[pattayaorganic]

GK - But that research focuses on low paid work in the US ("low wage work in rich countries" - para 1.). The situation here is low wage work in a poor(er) country, so it isn't entirely directly comparable with this situation.

I agree entirely that a minimum wage of 300 baht is a perfectly reasonable expectation however I feel that many Thai workers feel that this new wage is their right (as they voted for it) and is not (in their mind) linked to their increased productivity. It is in effect a reward for their vote and that is a real concern

I don't know about the mindset of the Thai worker, but I can share a real life example. (BTW I am not arguing against your point because I think it's a reasonable question.)

My friend's room rent here in Patong was 5500 baht/month 2 years ago +water & electricity. Last year it increased to 6500 baht. The landlady wants 7500 baht this year. He is trying to negotiate it down because he just doesn't have the income. His salary has not increased in 2 years. He makes a modest Thai salary of just under 16,000 baht. On this salary he has to support a crippled father (from a work injury) and a mother with a serious heart condition. He lives a modest lifestyle with no partying etc. He is still paying off his student loan with a balance in excess of 100,000 baht. Food is expensive in Phuket. His girlfriend is a university student with a part time job that goes to pay her tuition and subsistence. She' can't contribute to the rent. That's the face of the typical Thai worker. He lives stressed out every day trying to make ends meet.

To all those foreigners that are dismissing the concept of an attempt to provide a living wage, I suggest that they try to live on 300 baht in Phuket. It's not much of a life. I know I couldn't do it.

This example is not making any arguments for minimum wage and is totally unrelated. Your guy in Patong can't make ends meet at 16,000B. How does the new minimum wage affect him? Well for starters, companies that have to bear increased costs will pass those on to the consumers and now his 16,000B will be worth even less! He should be the one lobbying heavy AGAINST any increase in minimum wage.

You see the real enemy that you are describing is inflation which is rampant all over the world right now. Raising the minimum wage does nothing but exacerbate inflation. Once prices adjust to the new labor cost, you have even more money chasing the same amount of goods and services. That is the definition of inflation. I wish they taught more economics in basic schooling so people could understand this better.

There is no free lunch. The only way to create a win-win situation is to improve labor productivity and the only way to do that is through education. The upside is that Thai labor is so terrible, there is a lot of possible upside if somebody could teach them how to actually do something productive.

The situation in my company is that there is actually a shortage of labor. In order to get reliable workers that don't just decide not to show up for work en masse, we have to pay double the minimum wage and even then we still cannot get reliable workers. So our company since last year, is embarking on a massive upgrade to automated production systems that will reduce our need for labor by about 80 to 90%.

It is dangerous to generalize my personal situation, but I talk with other farmers and people involved in agri/aquaculture and I believe the Thai worker of late is NOT someone who is overly exploited, but overly expectant of free handouts without any sense of duty. This problem exists from Chantaburi, Petchaburi, Issan, etc. Quite a widespread geographic area. Every farm owner I have spoke with reaffirms my personal sentiment.

People can sit in their condos in BKK and Pattaya and Phuket and poo pooh about the poor Thai worker, but in my mind the Thai worker of late is just unemployable. The minimum wage law in my case forced my investment into automation and I will not be hiring more workers in the future. Don't get me wrong, I am happy with the result for my personal business/farm, but I fear social unrest is coming and much worse when the effects of this policy eventually trickle down.

That is why I support strongly education/re-education not populist vote getting meaningless or harmful policies.

[pattayaorganic]

Actually you are completely wrong here and this is out of context. When you let the MARKET decide what to pay workers, better quality workers will gravitate to higher paying employers. However, the current government policy, just put the cart before the horse, i.e. used the law to implement minimum wage without investing anything into education or taking any steps to improve labor productivity. Since it is now a level playing field, the above no longer applies.

I believe that you are unfair. Much of the country's agriculture industry is mechanized and has high productivity. Hard to believe I know because everyone thinks rice is grown on small plots in Surin and Issan. The poultry business is big business in Thailand and I suggest you visit some of the facilities. Same for rice. Not all rice is grown on small plots. There are some big modern operations. Thailand could not achieve the results it has with rice yields if it had not modernized long ago. Have a look at some of the major fish exporters. A good example is the tuna canning facilities. Look at a can of tuna available in a western store: Product of Thailand.

Yes, I know that Thailand's education system gets slammed alot. However, in comparison to its neighbours of Burma, Laos, Cambodia and Vietnam it is still much better. Thai skilled labour gets high marks in this region. Thailand has its problems/weaknesses, but it is still a regional powerhouse.

I am sorry if you believe I am unfair, but I actually own and operate several farming operations and my background is in agriculture policy NGO, so I know what I am talking about. I have built and operated a chicken house under contract with CP for the last 7 years. One of the worst investments I have ever made. The FARMER doesn't make shit in this country, just has to smell it. CP makes all the money. The size of the plot actually has no relation to the productivity in terms of production/Hectare. Some studies have actually showed a reverse correlation with plot size and area productivity.

Anyway, you are totally missing the point. Agriculture is the largest employment sector in the country and including direct and indirect agri-jobs it employs more than half of the country. The market says you are making too much rice and is giving you the signal by lowering the price. SO what does the government do? Thailand's problem is NOT that is has not enough rice, but too much. By flipping that price signal on its head, the result is even more (unneeded) rice. What farmers facing a low rice price should be doing (and a responsible agri-policy making government should be doing) is to encourage farmers to grow alternative, higher value crops. Learning how to grow a new crop would make the labor involved with the growing of that crop more valuable.

Finally, in the irony of ironies, you mention the tuna industry. I do daily business with the tuna canners and often visit their factories. There are only a few Thai workers (managers) and all the workers are almost exclusively Burmese. If you were to invest in a new tuna canning factory, how many Thai workers do you think you could hire, even paying in excess of minimum wage? I will tell you: ZERO.

If the Thai government stopped allowing Burmese workers in these factories, you would see a massive migration of these companies to other countries.

[Soi Sauce]

3 mill unemployed in the UK. 4.5 in Spain.

Why? Wages too high. All manufacturing has been shipped somewhere cheaper; not maybe better.

Ain't hard to unnerstan, unless you like to pay 50% more for summat than you would at the shop next door.

[SNGLIFE]

It boggles the mind that there is no mention at all about the coming inflation and rise in poverty and crime as those who do not have jobs still have to deal with the higher cost of living...

[WackySomchai]

Thailand has its problems/weaknesses, but it is still a regional powerhouse.

Regional power-house - at what planet do you live ?

The fugitive's administration got no interest in improving education or life of the Thai people, they only want to pocket as much as possible before they get kicked out again.

[MILT]

My wife and I currently employ 363 people. We look forward to the wage hike because it will allow us more control over productivity and efficiency. In other words you want the 300 baht per day then actually work for it. Now this brings up a question or two. We employ Thai, Burmese, Thai Yai, Each of these groups work at different paces and at different efficiency's. Do they all deserve the 300 baht per day? Like when I walk into any Big C, Home Mart et. most of the employees are just milking the hrs. away. I recently walked into a Yok's which is a new grocery chain. I counted 12 female employees standing around talking to each other. or talking on the phone, playing on their smart phones. I made a comment when passing by them. I said are you working hard? or hardly working? One of the girls understood what I had said and quickly told her co- workers and the expression of disgust was quite evident. But you know what as I continued to browse the store almost all of those employees were back working. 300 baht is what $10.00 a day? Most companies if not all can handle this.

[OzMick]

My wife and I currently employ 363 people. We look forward to the wage hike because it will allow us more control over productivity and efficiency. In other words you want the 300 baht per day then actually work for it. Now this brings up a question or two. We employ Thai, Burmese, Thai Yai, Each of these groups work at different paces and at different efficiency's. Do they all deserve the 300 baht per day? Like when I walk into any Big C, Home Mart et. most of the employees are just milking the hrs. away. I recently walked into a Yok's which is a new grocery chain. I counted 12 female employees standing around talking to each other. or talking on the phone, playing on their smart phones. I made a comment when passing by them. I said are you working hard? or hardly working? One of the girls understood what I had said and quickly told her co- workers and the expression of disgust was quite evident. But you know what as I continued to browse the store almost all of those employees were back working. 300 baht is what $10.00 a day? Most companies if not all can handle this.

What on earth makes you think that productivity and efficiency will be any greater after the pay rise than before?

If you want to improve both, start handing out a few DCMs. (Don't Come Monday ie at all)

[hellodolly]

Keeping in mind that the Chamber of Commerce represents business, it is not an unbiased organization... I have seen this same, tired argument from U.S.companies over the past 40 years of steady increase of the minimum wage. Each time, the mantra was "Jobs will flee; woe is us". Yeah, the job market collapsed recently, but not because of wages. It was due to the greed & overextending of banks & big business.

In the end, higher wages = increased consumption which is something every business owner should embrace. If they could see two inches beyond their immediate payroll spreadsheet.

Actually it has resulted in a number of jobs being shipped out of country. Do you really think all the parts in your computer are made in the states? Companies can absorb so munch and at that point it ether loose money and pi-s there investors off or look for lower costs.

[Sing_Sling]

Keeping in mind that the Chamber of Commerce represents business, it is not an unbiased organization... I have seen this same, tired argument from U.S.companies over the past 40 years of steady increase of the minimum wage. Each time, the mantra was "Jobs will flee; woe is us". Yeah, the job market collapsed recently, but not because of wages. It was due to the greed & overextending of banks & big business.

In the end, higher wages = increased consumption which is something every business owner should embrace. If they could see two inches beyond their immediate payroll spreadsheet.

Actually it has resulted in a number of jobs being shipped out of country. Do you really think all the parts in your computer are made in the states? Companies can absorb so munch and at that point it ether loose money and pi-s there investors off or look for lower costs.

You make a valid point but a Thai livable minimum wage is hardly comparable to the US economy's manufacturing sector's decline

[hellodolly]

Wow, they are using the outdated arguments that really have never been proven in other countries when minimum wages increased.

Don't lose site of the fact that many of these marginal businesses are local and they exist by undercutting other firms that invest in product quality, responsible management and ethical HR practices. It would do the economy some good to be rid of a large number of marginal inefficient and/or bad companies.

China is currently experiencing labour issues as workers demand higher wages. Even, Vietnam is seeing wages increase and suffers from inflation. Please do not play the "but the jobs will leave" song as it won't apply. BTW there is a labour shortage in Thailand with too much reliance on the exploitation of Burmese labourers. It is time for many Thais and foreign businesses to stop being so greedy. (And for the record I am a fiscal conservative and am not a commie.)

Economist John Schmitt says it best;

A lot of small businesses are focused on local markets. They prosper as the local economy prospers. One of the best ways we can jump start that is get more money into the hands of low- and middle-income consumers, who spend all that they get.

"There are a lot of ways to run a business that is profitable. One way: Take the low road and pay employees poorly, and you have high turnover. So you pay in cost and productivity. Meanwhile, firms that operate on the high road strategy pay more, but in exchange they have…good workers who stick around and have good productivity.’’

http://www.openforum...policy-research

" It would do the economy some good to be rid of a large number of marginal inefficient and/or bad companies."

Would that include small scale rice-farmers?

Do you remember your post where you claimed to "selectively obey" Thai laws?

????

Small rice farmers will not be impacted by the wage increases as the labour is almost always family. One of my temps from Issan always returns for rice growing season. Small subsistence farm.

Personally, I think it would not be so bad to get rid of some of the smaller rice farms or at least organize them into co-ops.

BTW the terms of my employment require me to obey the law. Any serious criminal act anywhere in the world could cost me my job. When there is a conflict in the law, the governing jurisdiction is my employer's.

I thought the government was going to give them 20,000 baht a ton.

I take it you are against Thai culture in general. Westernize them put more people on the streets.

[tlansford]

In the above discussion, some posters are talking about wages and productivity and letting the market decide.

That is all well and good for wages in a general business situation.

But when talking about minimum wages, first of all the impact to most companies is not the same relative to costs and productivity as with general wages, and second, let the market decide the minimum wage and it will be a race to the bottom and approach something close to 0Bh/day which is why minimum wages exist in the first place.

[MILT]

In the above discussion, some posters are talking about wages and productivity and letting the market decide.

That is all well and good for wages in a general business situation.

But when talking about minimum wages, first of all the impact to most companies is not the same relative to costs and productivity as with general wages, and second, let the market decide the minimum wage and it will be a race to the bottom and approach something close to 0Bh/day which is why minimum wages exist in the first place.

I am not suggesting letting the market decide, I am suggesting that regardless of a companies cost and productivity that 300 baht is not that great of impact. Chiangmai min. wage is 251 baht per day. Chiangrai is 230 baht and so as you look at most provinces the min. wage would change by a slight margin. Again most companies could absorb the hike. Productivity is still a major hurdle to jump in Thailand. In all sectors one can see where productivity is marginal at best.

[tlansford]

In the above discussion, some posters are talking about wages and productivity and letting the market decide.

That is all well and good for wages in a general business situation.

But when talking about minimum wages, first of all the impact to most companies is not the same relative to costs and productivity as with general wages, and second, let the market decide the minimum wage and it will be a race to the bottom and approach something close to 0Bh/day which is why minimum wages exist in the first place.

I am not suggesting letting the market decide, I am suggesting that regardless of a companies cost and productivity that 300 baht is not that great of impact. Chiangmai min. wage is 251 baht per day. Chiangrai is 230 baht and so as you look at most provinces the min. wage would change by a slight margin. Again most companies could absorb the hike. Productivity is still a major hurdle to jump in Thailand. In all sectors one can see where productivity is marginal at best.

Hi Milt, actually, I agree with you - it is not that much of an impact as you and I have both stated, and your posts above are quite clear. And like you, I also think that people should be doing their job while at work, whether that is 300B/D or 30,000B/D.

My point was more to the posts regarding "high wages cause industry to leave developed nations" as an argument (somehow) against a slightly higher minimum wage in Thailand. Being two completely unrelated issues, it doesn't make sense to me for people to use one to discuss the other.

[TAWP]

In the above discussion, some posters are talking about wages and productivity and letting the market decide.

That is all well and good for wages in a general business situation.

But when talking about minimum wages, first of all the impact to most companies is not the same relative to costs and productivity as with general wages, and second, let the market decide the minimum wage and it will be a race to the bottom and approach something close to 0Bh/day which is why minimum wages exist in the first place.

Thinking the average salary for a basic position would race down to close to 0 baht/day shows a severe lack of understanding of how salaries are negotiated by a free market place.

[TAWP]

What? Instead of doing 95% profit they will make only 90%? I understand how unbareble that must be!

What business is this? Sounds like something one should get into. Why are you not in this business making hands over fists of money? Sounds magical.

[tlansford]

In the above discussion, some posters are talking about wages and productivity and letting the market decide.

That is all well and good for wages in a general business situation.

But when talking about minimum wages, first of all the impact to most companies is not the same relative to costs and productivity as with general wages, and second, let the market decide the minimum wage and it will be a race to the bottom and approach something close to 0Bh/day which is why minimum wages exist in the first place.

Thinking the average salary for a basic position would race down to close to 0 baht/day shows a severe lack of understanding of how salaries are negotiated by a free market place.

Really?

Not at all, but it shows that your reading comprehension is a bit off today.

I did not say the average salary for a basic position, but the minimum wage. Look at the variations in the minimum wage worldwide

http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

Guess what ?

The minimum wage hits the minimum allowed wage in every single country in the world. Some of them are approaching OBt / day.

[Skywalker69]

Actually you are completely wrong here and this is out of context. When you let the MARKET decide what to pay workers, better quality workers will gravitate to higher paying employers. However, the current government policy, just put the cart before the horse, i.e. used the law to implement minimum wage without investing anything into education or taking any steps to improve labor productivity. Since it is now a level playing field, the above no longer applies.

I believe that you are unfair. Much of the country's agriculture industry is mechanized and has high productivity. Hard to believe I know because everyone thinks rice is grown on small plots in Surin and Issan. The poultry business is big business in Thailand and I suggest you visit some of the facilities. Same for rice. Not all rice is grown on small plots. There are some big modern operations. Thailand could not achieve the results it has with rice yields if it had not modernized long ago. Have a look at some of the major fish exporters. A good example is the tuna canning facilities. Look at a can of tuna available in a western store: Product of Thailand.

Yes, I know that Thailand's education system gets slammed alot. However, in comparison to its neighbours of Burma, Laos, Cambodia and Vietnam it is still much better. Thai skilled labour gets high marks in this region. Thailand has its problems/weaknesses, but it is still a regional powerhouse.

I am sorry if you believe I am unfair, but I actually own and operate several farming operations and my background is in agriculture policy NGO, so I know what I am talking about. I have built and operated a chicken house under contract with CP for the last 7 years. One of the worst investments I have ever made. The FARMER doesn't make shit in this country, just has to smell it. CP makes all the money. The size of the plot actually has no relation to the productivity in terms of production/Hectare. Some studies have actually showed a reverse correlation with plot size and area productivity.

Anyway, you are totally missing the point. Agriculture is the largest employment sector in the country and including direct and indirect agri-jobs it employs more than half of the country. The market says you are making too much rice and is giving you the signal by lowering the price. SO what does the government do? Thailand's problem is NOT that is has not enough rice, but too much. By flipping that price signal on its head, the result is even more (unneeded) rice. What farmers facing a low rice price should be doing (and a responsible agri-policy making government should be doing) is to encourage farmers to grow alternative, higher value crops. Learning how to grow a new crop would make the labor involved with the growing of that crop more valuable.

Finally, in the irony of ironies, you mention the tuna industry. I do daily business with the tuna canners and often visit their factories. There are only a few Thai workers (managers) and all the workers are almost exclusively Burmese. If you were to invest in a new tuna canning factory, how many Thai workers do you think you could hire, even paying in excess of minimum wage? I will tell you: ZERO.

If the Thai government stopped allowing Burmese workers in these factories, you would see a massive migration of these companies to other countries.

The best post I read today, 100% agreed, than you.

[Skywalker69]

Thailand has its problems/weaknesses, but it is still a regional powerhouse.

Regional power-house - at what planet do you live ?

The fugitive's administration got no interest in improving education or life of the Thai people, they only want to pocket as much as possible before they get kicked out again.

[Skywalker69]

What? Instead of doing 95% profit they will make only 90%? I understand how unbareble that must be!

What business is this? Sounds like something one should get into. Why are you not in this business making hands over fists of money? Sounds magical.

Me too.

[Skywalker69]

Lets talk %.

What would happen if you raiced workers-salary 30-50% in the US or in EU?

[nurofiend]

Lets talk %.

What would happen if you raiced workers-salary 30-50% in the US or in EU?

considering the us and eu economies are in tatters at the moment, it would be a bullet to the head for both...

but minimum wage - relative to cost of living - is a hell of a lot fairer in both the eu and us for the most part.

[Thai at Heart]

Lets talk %.

What would happen if you raiced workers-salary 30-50% in the US or in EU?

Considering that any raise to minimum wages in Europe is normally calculated on an hourly wage rate as opposed to a daily wage rate, I would suggest that the effect in Europe would be considerably greater than in Thailand. However, many countries have mandated automatic increases in minimum wage to keep up with inflation anyway, which isn't the case in Thailand.

[TAWP]

In the above discussion, some posters are talking about wages and productivity and letting the market decide.

That is all well and good for wages in a general business situation.

But when talking about minimum wages, first of all the impact to most companies is not the same relative to costs and productivity as with general wages, and second, let the market decide the minimum wage and it will be a race to the bottom and approach something close to 0Bh/day which is why minimum wages exist in the first place.

Thinking the average salary for a basic position would race down to close to 0 baht/day shows a severe lack of understanding of how salaries are negotiated by a free market place.

Really?

Not at all, but it shows that your reading comprehension is a bit off today.

I did not say the average salary for a basic position, but the minimum wage. Look at the variations in the minimum wage worldwide

http://en.wikipedia....ages_by_country

Guess what ?

The minimum wage hits the minimum allowed wage in every single country in the world. Some of them are approaching OBt / day.

Clearly your understanding is off - by 'basic position' it was implied it was covering all jobs that may be around the current minimum wage level. I.e. not doctors, taxi-drivers, 7/Eleven store clerks or message delivery boys.

And you last sentence is language comedy. Yes, jobs paying minimum wage do indeed hit the minimum wage 'limit'. Hence the term...

But nothing you say in the post does in any shape or form prove your assertion that not having a minimum wage limit would drive wages close to zero.

[Sing_Sling]

Lets talk %.

What would happen if you raiced workers-salary 30-50% in the US or in EU?

Why do you think that workers' wages are being hiked by 30-50%?

[geriatrickid]

Lets talk %.

What would happen if you raiced workers-salary 30-50% in the US or in EU?

A percentage is an inappropriate comparison. If the pay is 100 units, but the subsistence level is 200 units, and increase to 150 units would be a 50% increase. However, the pay would still be inadequate and below subsistence level.

How about this, if it is acknowledged that the minimum wage should actually be closer to 500 baht on Phuket and is now 300 baht, why don't we slash minimum wages in the USA and EU accordingly and see what happens?

[tlansford]

In the above discussion, some posters are talking about wages and productivity and letting the market decide.

That is all well and good for wages in a general business situation.

But when talking about minimum wages, first of all the impact to most companies is not the same relative to costs and productivity as with general wages, and second, let the market decide the minimum wage and it will be a race to the bottom and approach something close to 0Bh/day which is why minimum wages exist in the first place.

Thinking the average salary for a basic position would race down to close to 0 baht/day shows a severe lack of understanding of how salaries are negotiated by a free market place.

Really?

Not at all, but it shows that your reading comprehension is a bit off today.

I did not say the average salary for a basic position, but the minimum wage. Look at the variations in the minimum wage worldwide

http://en.wikipedia....ages_by_country

Guess what ?

The minimum wage hits the minimum allowed wage in every single country in the world. Some of them are approaching OBt / day.

Clearly your understanding is off - by 'basic position' it was implied it was covering all jobs that may be around the current minimum wage level. I.e. not doctors, taxi-drivers, 7/Eleven store clerks or message delivery boys.

And you last sentence is language comedy. Yes, jobs paying minimum wage do indeed hit the minimum wage 'limit'. Hence the term...

But nothing you say in the post does in any shape or form prove your assertion that not having a minimum wage limit would drive wages close to zero.

TAWP if you want to say that the average salary for a basic job negotiated in the free market is implied to relate to the minimum wage, then I disagree. The minimum wage is by definition the floor. It is not set by the free market. All other wages above the minimum wage are set by the market / negotiation.

You acknowledge that wages hit the "floor" in every country. Like water, wages in unregulated capitalism seek the lowest level.

As for approaching zero, please look at the list provided. One country has a minimum wage that is around 27x lower than the old minimum wage in Thailand - that would put it under 10Bhat / day. I would call that "approaching zero bhat / day".

[TAWP]

TAWP if you want to say that the average salary for a basic job negotiated in the free market is implied to relate to the minimum wage, then I disagree. The minimum wage is by definition the floor. It is not set by the free market. All other wages above the minimum wage are set by the market / negotiation.

You acknowledge that wages hit the "floor" in every country. Like water, wages in unregulated capitalism seek the lowest level.

As for approaching zero, please look at the list provided. One country has a minimum wage that is around 27x lower than the old minimum wage in Thailand - that would put it under 10Bhat / day. I would call that "approaching zero bhat / day".

Yes, the minimum wage is the government intrusion into the free market and hence not set by the free market - but it is bad for completely different reason than you seem to think.

The wages don't hit the 'floor', that is nonsense.

Wages lands around the levels that companies offer and prospect employees accept them at.

If you think it is a one-side scenario, then I suggest you start your own company and try to hire people for peanuts and see how many applicants you get.

[xthAi76s]

Thai workers need to be more productive. If the wage increases are not met with increased productivity, it will be bad for business. It's that simple. They need to stop the nonsense of having 4 or 5 people for the job that 1 should be able to do rather easily. Of course the SMEs are worried. As an SME (or large enterprise) in Thailand, you need to hire 500% more workers than you would in many, many other economies, and these workers or woefully inefficient. How do you compel them to move more quickly and to be more efficient after the arbitrary wage increase??

[swillowbee]

Thai workers need to be more productive. If the wage increases are not met with increased productivity, it will be bad for business. It's that simple. They need to stop the nonsense of having 4 or 5 people for the job that 1 should be able to do rather easily. Of course the SMEs are worried. As an SME (or large enterprise) in Thailand, you need to hire 500% more workers than you would in many, many other economies, and these workers or woefully inefficient. How do you compel them to move more quickly and to be more efficient after the arbitrary wage increase??

... can't argue with that ... but, some of the responsibility rests squarely on the shoulders of the SME owners themselves ... they reinvest nothing in their own businesses

... we looked at buying the NPL's of Thai manufacturing SME's and concluded that this class of Thai business was so hopeless we wouldn't venture even a 10 cents on the dollar risk ... I was just stunned ... it was like peering into 19th century industrial Europe ... Thai SME's are the worst of traditional family business meets lack of education meets corrupt/incompetent business practices ... one manufacturer ran his business on 40+ year old, obsolete, junked machines he 'smartly' bought by the kilo from defunct Taiwanese industries (who were then re-tooling and educating themselves for higher value-added manufacturing) and they put the junked machines back together with bailing wire ... his employees had no education and no training and no tools to be productive ... their workers were a tattered, pathetic lot, as pictured in the sweat shops of industrial Europe ... this was not an uncommon story.

... the bad news is that 10% of Thai SME's should go under, and that many hopelessly unskilled workers will be unemployed ... probably far more that 10% should go under, and good riddence to them ... the good news is that their failures will not even register on the overall economy and will punish bad economic behaviors of the SME owners, the 'barons' of Thailand's modern-day feudal system.

... so .. then ... the question is, what responsibiity does the succession of Thai governments (since forever) have for guiding the nation's economic development to create opportunities for the Thais who lose their jobs as a consequence of this healthy pruning of inept family-owned SME's.

... Thai government policy has long favored cheap labor export manufacturing and agriculture ... meanwhile, young Thais are graduating in unprecedented numbers with college degrees for which there is no demand ... ("Welcome to Somchai na Ayudtaya' s House of Noodles, may I take you order?") ... and unskilled, uneducated laborers and farmers (40+% of the Thai workforce) still suffer lives of desperation without hope of a better future for themselves, their children, or their nation ... the benefits of this system inure only to the privileged, elite ruling Thai families.

... Thai economic policy has been based (still is) upon exploiting cheap labor to benefit the Thai elitists, who ... want ... no ... change ... this part is important: resisting change is a fundamental Thai cultural value ... it protects their positions at the top and freezes in place any challenge to their privileged status.

... Thailand, hub of education? ... Thailand, hub of technology? ... Thailand, hub of higher level anything? ... oh, pul-leaze!

... change is surrounding Thailand, and it is happening fast ... the Thai SME's and unfortunately the Thai working class will be the victims of Thailand's failure as an enlightened, spiritual nation.

... it appears to me that the values Thai practice and the society they have built for themselves is really best suited for agriculture ... in the long term, being an nation of farmers might be Thailand's best and highest use and its saving grace ... but without land reform, it would benefit only the entited elites, as land continues to be hoarded by the wealthy feudal Thai families.

... the King's Sufficiency Economy Theory is a bit of prescience ... assuming, cultural enlightenment does not come to Thailand, this appears to me as the only way for poor, passified Thais to declare independence from feudal enslavement that is modern-day Thailand ... he knows much about what is possible in Thailand, and what is not possible.

... it is all really quite remarkable, Thai culture, and the society they have fashioned for themselves ... 'they' being the Thai privileged elite families (everyone else is thoroughly passified and along for the ride only) ... 'Amazing Thailand', yes, but not in an 'Amazing Thailand' good sort of way at all.

Edited April 6, 2012 by swillowbee