Higher Living Costs Eat Up Hike In Daily Wage: Thailand

[webfact]

PAY HIKE

Higher living costs eat up hike in daily wage

THE NATION

BANGKOK: -- The Labour Ministry will monitor the cost of living over the next three months to determine if any additional adjustment is needed to the minimum daily wage.

From April 1, workers in seven provinces have already earned at least Bt300 a day thanks to a significant hike pushed by the Pheu Thai-led government and approved by the Central Wage Committee.

And the daily minimum wage will soar to Bt300 in 70 other provinces from next January.

However, a recent survey suggests workers have not really benefited from the significant wage hike because product prices have also jumped.

"I have already signed an order instructing provincial labour chiefs to survey the cost of living in their respective provinces within three months," permanent secretary at the Labour Ministry Somkiat Chayasriwong said. This should |be done within three months.

"In July, we should obtain information to determine how to tackle problems relating to the cost of living."

The Bank of Thailand said yesterday inflation was expected to be 3.7 per cent over the next 12 months, up from 3.5 per cent in February.

ENERGY PRICE THE PROBLEM?

However, Somkiat yesterday sought to downplay growing criticism that the government policy to raise the daily minimum wage had pushed up the cost of living.

"The main factor behind the soaring cost of living is the increasing energy price," he said.

Somkiat said when the energy price rises, the electricity price, bus fares and transport costs climb too.

"But on the bright side, the increased wage has eased the expense burden on workers," he said.

Somkiat said workers would be suffering more if the daily minimum wage had not increased significantly.

He said the move to push for a Bt300 a day minimum wage took into account the fact workers have struggled with soaring costs in the past. "Their debt problems have accumulated over years."

While the Central Wage Committee planned to not raise the daily minimum wage for two years after the rate reached Bt300, the committee would review the plan if needed. "If the cost of living has drastically changed, a review is possible," he said.

Thailand Development Research Institute (TDRI) labour-development research director, Dr Yongyuth Chalamwong, said the current wage-hike policy could endanger many businesses and make workers uncomfortable.

The policy, after all, also involved two years of no wage hikes afterward.

"It won't be really fair to workers because the cost of living will keep rising," Yongyuth said.

He believed it would be better if the government gradually increased the wage as that would mean employers had more time to adjust.

Yongyuth recommended three options for authorities to consider. One was in line with a suggestion by the Federation of Thai Industries (FTI), which suggested the daily minimum wage of Bt300 should take effect across the country in January 2015. For provinces where the daily minimum wage was already above Bt300 by then, it should be adjusted up - in line with the consumer price index (CPI), which the Commerce Ministry compiles every year.

WAGE ADJUSTMENT CALLED FOR

Two other options recommended by Yongyuth also call for adjustment to the daily minimum wage based on the CPI. Without such adjustment, no matter how much the wage rate soared, it was possible remaining workers would become poorer.

Although there's much debate about true benefits of the government policy to provide the Bt300 daily minimum wage, Prime Minister Yingluck Shinawatra plans to highlight it today - Labour Day. "We have already raised the daily minimum wage to Bt300 in seven provinces. We are going to ensure the same rate for other provinces by 2013," she said.

The National Congress of Thai Labour and the Thai Labour Solidarity Committee are set to hold separate rallies and seminars to mark Labour Day. They are preparing to call attention to workers' grievances, especially soaring product prices.

More than 40 per cent of the labour force say they are facing greater hardship than last year after being affected by the great flood and the rising cost of living, according to the latest survey by a Suan Dusit Poll. The poll was conducted between April 25-30 and involved 1,440 workers in major provinces around the country.

Asked how their living conditions compared to 2011, 44 per cent said they faced more hardship as a result of last year's flood and the higher cost of living; 32 per cent said living conditions were about the same; and 24 per cent said things had improved following a wage rise and promotion.

-- The Nation 2012-05-01

[jackr]

This was always going to happen. Apart from the gov' with the extra tax revenue, all it does is make it tougher for everyone else, especially those who don't get the wage rise, while those that do will have no benefit in the long run.

[Unkomoncents]

Inflation is such a funny thing. So is globalization. You just can't manipulate your way out of these things.

Edited May 1, 2012 by Unkomoncents

[Mosha]

What did they expect? Philanthropist employers to absorb all the costs? As my boss used to say. "Shit travels down hill."

[OzMick]

Another Baldrick-like "cunning plan" from PTP. To quote Blackadder "Their head is emptier than a eunuch's underpants."

[Crushdepth]

Another home run from the government's "economic dream team". Inflation? Alai na?

[hellodolly]

Are these people really that stupid that they believe raising wages will not affect the cost of living.

Hooray for them they have raised wages in 7 provinces. I am betting these 7 provinces had the least amount of employes effected by the raise. And yet the 7 poorest provinces get nothing except a increase in the cost of living.

[whybother]

Are these people really that stupid that they believe raising wages will not affect the cost of living.

Hooray for them they have raised wages in 7 provinces. I am betting these 7 provinces had the least amount of employes effected by the raise. And yet the 7 poorest provinces get nothing except a increase in the cost of living.

Actually, the other 70 provinces got a 39.5% increase. That will go up to 300 baht in 2013, then no more rises anywhere until 2015.

[mic6ard]

on this situation.

[siampolee]

Just another little (?) hike in price,

Went to the barbers this morning price was 60 baht now it's 70 baht an increaseof some 16%.

Barbers comments, ' everything is getting expensive, my wife need extra money to feed the family and pay the bills.'

No increase in the cost of living according to this maladministration.

Well perhaps not if you're busy creaming of from all the projects that are being put into place. However poor old Mr. and Mrs. Somchai are certainly feeling the pinch in no uncertain manner.

Edited May 1, 2012 by siampolee

[how241]

Just another little (?) hike in price,

Went to the barbers this morning price was 60 baht now it's 70 baht an increaseof some 16%.

Barbers comments, ' everything is getting expensive, my wife need extra money to feed the family and pay the bills.'

No increase in the cost of living according to this maladministration.

Well perhaps not if you're busy creaming of from all the projects that are being put into place. However poor old Mr. and Mrs. Somchai are certainly feeling the pinch in no uncertain manner.

Inflation is everywhere. It seems to be part of the natural cycle.

[Ricardo]

Just went to get some 20-litre bottles of drinking-water, which have today increased from 10B to 15B, but inflation is still only 3.5% rising to 3.7%, according to the Bank of Thailand. Yeah ... right !

[nickjam]

This whole wage hike thing seems to have provided an opportunity for rich corporations to actually increase their profits. I suppose its only natural for a company to want to protect its profits but it would have been nice to see large successful businesses absorb some of the costs. In Thailand, you rarely see a price increase in line with inflation, its usually a 5 or 10 baht hike. Take milk for an example. It was 28 baht for a big meiji when I first came her in 04, now its 43 baht. Have labour/logistical costs really increased by 50% in that time to justify such a hike, nope its just pure greed and profiteering by people who are already loaded. Yes it goes on in the west but here they really do take the piss.

300 baht a day is still a pittance and it was about time there was an increase. Its just that it was all done in a "we'll promise you the world" slapdash manner.

[h90]

Just went to get some 20-litre bottles of drinking-water, which have today increased from 10B to 15B, but inflation is still only 3.5% rising to 3.7%, according to the Bank of Thailand. Yeah ... right !

Of course because iPhone and 1 GB Ram got a lot cheaper. Put enough of these things in your calculation and the world is OK

[siampolee]

That sack of promises that were promised by the politicians is indeed in grave danger of being overtaken by reality.

T

Edited May 1, 2012 by siampolee

[strollling]

I'm sure this will be the same as the flooding.

Prices double nationwide 'becaut wait hike make eferything more expensif, we no money, prite now double'.

[TeddyFlyfisherDavis]

Please don't worry...Yingy has a plan...dream...thought...brain fart...

[louse1953]

Are these people really that stupid that they believe raising wages will not affect the cost of living.

Hooray for them they have raised wages in 7 provinces. I am betting these 7 provinces had the least amount of employes effected by the raise. And yet the 7 poorest provinces get nothing except a increase in the cost of living.

Actually, the other 70 provinces got a 39.5% increase. That will go up to 300 baht in 2013, then no more rises anywhere until 2015.

Yeh,they have to wait a year to get it,meanwhile tread water as prices rise around them.

[hellodolly]

Are these people really that stupid that they believe raising wages will not affect the cost of living.

Hooray for them they have raised wages in 7 provinces. I am betting these 7 provinces had the least amount of employes effected by the raise. And yet the 7 poorest provinces get nothing except a increase in the cost of living.

Actually, the other 70 provinces got a 39.5% increase. That will go up to 300 baht in 2013, then no more rises anywhere until 2015.

No more raises in pay but the price of goods will go up partly in order to pay the wages.

[sparebox2]

Just another little (?) hike in price,

Went to the barbers this morning price was 60 baht now it's 70 baht an increaseof some 16%.

Barbers comments, ' everything is getting expensive, my wife need extra money to feed the family and pay the bills.'

No increase in the cost of living according to this maladministration.

Well perhaps not if you're busy creaming of from all the projects that are being put into place. However poor old Mr. and Mrs. Somchai are certainly feeling the pinch in no uncertain manner.

Inflation is everywhere. It seems to be part of the natural cycle.

No, not in Western countries and Japan.