Small Firms Will Struggle With Wage Hike: Tdri

[Lite Beer]

Small firms will struggle with wage hike: TDRI

The Nation on Sunday

BANGKOK:-- TDRI researcher Dilaka Lathapipat said the wage hike could help cut income inequality, and boost workers’ quality of life. But the measure threatened to have a serious negative impact on SMEs that weren’t ready to pay their workers more, he said.

The minimum wage policy took effect in 7 provinces on April 1.

In his statement, Dilaka said that SMEs, or those which employ 10-99 workers, would be hit severely. Some could shut down buisness.

TDRI supported the wage hike. It research covering average wages during 1996-2010 shows that the inflation-adjusted wage had declined substantially after the financial crisis in 1997.

"Raising the minimum wage is a good policy. However, a sudden increase without supporting measures could send worse-than-expected impacts particularly to young workers (aged below 25) who possess low skills. They could lose jobs or being pushed to unofficial sectors, which pay the below-minimum wage and offer no welfare benefits," he said.

TDRI’s wage model shows that every 1 per cent increase in wage would raise the actual wage of workers in non-agricultural sectors by 0.87 per cent.

However, Dilaka noted that the benefits would fall only to those who are able to hold their jobs. It is necessary to take into account the unemployment as well as job mobility.

His research focused on low-skill workers, with high school or below-high school education level. It shows that SMEs, which employ few workers, then to lay off the workers and they could be forced to serve household business without any pay or serve small agricultural business of which pay structure is unclear.

The research shows that as the minimum wage is raised by 40 per cent, the ratio of workers aged 15-24 would drop from 81 per cent of total workforce to 70 per cent. Half of the affected would be unemployed and the rest would be forced out of the labour market.

"This populist policy seems to be fair to workers, but a sudden increase could backfire particularly to weak SMEs. There must be measures to help them enhance productivity, to avoid lay-offs. All issues must be taken into account or this may turn to an honest blow to workers," Dilaka said.

-- The Nation 2012-04-08

[Bakseedaa]

Really , its a lot of <deleted> about this wage hike... I dont know of one Thai worker getting less than 300 bahts per day already and some much more.Unless of course they happen to be unskilled , and that of course was of their own choosing...!

[chrisinth]

Really , its a lot of <deleted> about this wage hike... I dont know of one Thai worker getting less than 300 bahts per day already and some much more.Unless of course they happen to be unskilled , and that of course was of their own choosing...!

That really is an arrogant statement. I don't doubt that you don't know of one Thai worker paid less than 300 baht a day. You really need to get out of your office more!

And to say that being an unskilled worker is off their own choosing? There is no reply I could give to that which would be accepted by the mods of this forum.

[tlansford]

"Raising the minimum wage is a good policy. However, a sudden increase without supporting measures

like cutting the taxes owed by business ?

Already done.

TDRI should stop their whining.

[thaicbr]

"Raising the minimum wage is a good policy. However, a sudden increase without supporting measures

like cutting the taxes owed by business ?

Already done.

TDRI should stop their whining.

are you sure it's done already???

[tlansford]

"Raising the minimum wage is a good policy. However, a sudden increase without supporting measures

like cutting the taxes owed by business ?

Already done.

TDRI should stop their whining.

are you sure it's done already???

If there is a question in your mind regarding the corporate tax reduction - if there is really a question in your mind - then google is your friend.

[h90]

Really , its a lot of <deleted> about this wage hike... I dont know of one Thai worker getting less than 300 bahts per day already and some much more.Unless of course they happen to be unskilled , and that of course was of their own choosing...!

That really is an arrogant statement. I don't doubt that you don't know of one Thai worker paid less than 300 baht a day. You really need to get out of your office more!

And to say that being an unskilled worker is off their own choosing? There is no reply I could give to that which would be accepted by the mods of this forum.

Most of the workers are very unreliable and hardly 300 Baht worth...In the west they would be just unemployed. The problem is the education system which is not repaired from any government.

Abhisit did a little bit, but nothing great.

[chrisinth]

Really , its a lot of <deleted> about this wage hike... I dont know of one Thai worker getting less than 300 bahts per day already and some much more.Unless of course they happen to be unskilled , and that of course was of their own choosing...!

That really is an arrogant statement. I don't doubt that you don't know of one Thai worker paid less than 300 baht a day. You really need to get out of your office more!

And to say that being an unskilled worker is off their own choosing? There is no reply I could give to that which would be accepted by the mods of this forum.

Most of the workers are very unreliable and hardly 300 Baht worth...In the west they would be just unemployed. The problem is the education system which is not repaired from any government.

Abhisit did a little bit, but nothing great.

But that is the entire point of companies coming to countries like Thailand, for the cheap labour. At least here they have a job, unlike the west, as you rightly say where they would be unemployed.

As for the education system, couldn't agree more! However, the people who are currently under the minimum wage limit probably couldn't even afford the uniforms to attend school or would be helping the family concerns through harvest time to ensure the family survive.

The comment from Bakseedaa; "Unless of course they happen to be unskilled , and that of course was of their own choosing...!" shows ignorance and a complete lack of understanding of what happens in this country outside the commercial areas.

The company I work for in Thailand employs nobody under the minimum wage. Given proper education, I would like to see where some of the personnel would have ended up; this education was never available to them where they were growing up.

Edit: I am still not sure if I am biting at Bakseedaa's post; if it was a bite, good one.

[hellodolly]

Really , its a lot of <deleted> about this wage hike... I dont know of one Thai worker getting less than 300 bahts per day already and some much more.Unless of course they happen to be unskilled , and that of course was of their own choosing...!

That really is an arrogant statement. I don't doubt that you don't know of one Thai worker paid less than 300 baht a day. You really need to get out of your office more!

And to say that being an unskilled worker is off their own choosing? There is no reply I could give to that which would be accepted by the mods of this forum.

He probably cleans his own toilet bowl so he won't have to meet some one making less than300 baht a day. For sure never goes in to a 7 11 and more than likely has his personal driver fuel up when he is not there so he won't have to meet some one making less than 300 baht a day.

[hellodolly]

"Raising the minimum wage is a good policy. However, a sudden increase without supporting measures

like cutting the taxes owed by business ?

Already done.

TDRI should stop their whining.

I thought that was only for big business. Are you sure the 7 11s are getting their tax cut?

[hellodolly]

Really , its a lot of <deleted> about this wage hike... I dont know of one Thai worker getting less than 300 bahts per day already and some much more.Unless of course they happen to be unskilled , and that of course was of their own choosing...!

That really is an arrogant statement. I don't doubt that you don't know of one Thai worker paid less than 300 baht a day. You really need to get out of your office more!

And to say that being an unskilled worker is off their own choosing? There is no reply I could give to that which would be accepted by the mods of this forum.

Most of the workers are very unreliable and hardly 300 Baht worth...In the west they would be just unemployed. The problem is the education system which is not repaired from any government.

Abhisit did a little bit, but nothing great.

Imagine what he could have accomplished if he had the red shirts backing his efforts to improve education.

[hellodolly]

I liked this and I am posting it as it was writen ot taking it out of text.

"His research focused on low-skill workers, with high school or below-high school education level. It shows that SMEs, which employ few workers, then to lay off the workers and they could be forced to serve household business without any pay or serve small agricultural business of which pay structure is unclear"

The election promise was quite clear. Now they the Government are blurring the picture.