Few Will Be Laid Off Due To Wage Increase: Thai Officials

[webfact]

Few will be laid off due to wage increase: officials

The Nation

BANGKOK: -- The authorities believe that the imminent hike in minimum daily wage will likely cost some people their jobs but the number will be relatively low.

"Many industries are facing a shortage of labour," Labour Minister Phadermchai Sasomsap said Wednesday, adding that there were more than 300,000 vacancies across the country.

The minister was speaking after Chalee Loysoong, president of the Thai Labour Solidarity Committee, voiced concern that some employers might lay off their workers before January 1 in a bid to avoid paying higher severance pay. The Bt300 minimum daily wage goes into effect in 70 provinces from January 1.

However, Labour Welfare and Protection Department director-general Pakorn Amorncheewin said that as of Tuesday, only 1,072 workers at five factories had been laid off due to the initial wage increase in seven provinces in April.

"This number is relatively low," Pakorn said, adding that the upcoming wage hike would go into effect in a much wider area, but explained that the employers had about a year to adapt.

"Some entrepreneurs are already paying up to Bt320 per day," he said, adding that people should also work harder to justify their higher pay.

Though relevant authorities expect a relatively low number of workers to lose their jobs, Pakorn said they were monitoring the situation closely.

"We have planned several measures such as suspending employers' contributions to the social security fund and finding new jobs for those who have been laid off," he added.

-- The Nation 2012-11- 21

[OzMick]

I think it was a misprint, should have read

Few officials will be laid off due to wage increase: if any.

[sirchai]

The Bt300 minimum daily wage goes into effect in 70 provinces from January 1.

Guess I'm living in one of the other seven provinces....

"We have planned several measures such as suspending employers' contributions to the social security fund and finding new jobs for those who have been laid off," he added.

The same fund I'm already paying in since almost eight years.---

Edited November 21, 2012 by sirchai

[dcutman]

So over a thousand layoffs in 5 factories is no big deal. How many factories are there in Thailand? How many pay the average worker less than B300 a day? How many Cambodians and Burmese are willing to work for less than B300 a day?

How Many of these people that own these factories, have already or are willing to move to another country, to maintain their profit margins?

I think everybody has noticed, since Yingluck and her populous promises have kicked in. The price of everything from food to building supplies have gone up 5 to 15%+, and it not because the world economy is on fire.

[Rich teacher]

Empirical studies around the world have shown a very weak correlation between increasing the minimum wage and unemployment

[jaidam]

Empirical studies around the world have shown a very weak correlation between increasing the minimum wage and unemployment

Were these empirical studies done in countries that routinely have 5 or 6 giggling employees to assist a single regular customer at home mart for example. Thought not.

[DocN]

There is a moral and an economic side to this discussion and there is a point where both meat.

Morally, I think it is high time, that honest work sees an honest wage.

Economically there should be a program to keep certain small and middle sized buisinisses from hardship.

But if mega- companies like CP make only 1,5 bn baht profit at the end of a year instead of 2,5 bn... I am not joining the crying billionaires!

[Thai at Heart]

Empirical studies around the world have shown a very weak correlation between increasing the minimum wage and unemployment

Were these empirical studies done in countries that routinely have 5 or 6 giggling employees to assist a single regular customer at home mart for example. Thought not.

There are many studies that suggest its effect is minimal. However, this is a big jump, so let's see what the effect is.

[Pushit]

Cheap Burmese labour, fire the Thais'

[lizardtongue]

"Some entrepreneurs are already paying up to Bt320 per day," he said, adding that people should also work harder to justify their higher pay.

My wife and most of her family worked in factories, minimum 12 hrs a day 6 days a week, at 230 Bt a day (20 Bt an hour), compulsory overtime paid at 40 Bt an hour, 1 hour lunch and 2 fifteen minute breaks, I do not call that lazy? How much harder do they expect the people to work? Not to mention the working conditions/health and safety!

You are talking about an additional 5 Bt an hour! If a company cannot absorb that then in my humble opinion the company is not being run efficiently.

Like most of the worlds Governments they are not in touch with reality.

It may have been more realistic to raise just manual workers wages? And make it compulsory for shop owners to pay its staff a commission, this would perhaps promote better customer service?

[Mosha]

Those jobs the Thais won't do might start to look more attractive.

[transam]

Cheap Burmese labour, fire the Thais'

Hmmmmmm, could well happen, the Polish are doing very well now in the UK.

[asiawatcher]

So over a thousand layoffs in 5 factories is no big deal. How many factories are there in Thailand? How many pay the average worker less than B300 a day? How many Cambodians and Burmese are willing to work for less than B300 a day?

How Many of these people that own these factories, have already or are willing to move to another country, to maintain their profit margins?

I think everybody has noticed, since Yingluck and her populous promises have kicked in. The price of everything from food to building supplies have gone up 5 to 15%+, and it not because the world economy is on fire.

5-15% is way under. There are a lot higher examples and still rising.

[asiawatcher]

I think these people in Govt are way out of touch. The price hike will cause a lot of Thai owners to simply seek alternative labour. Numbers quoted here are just a fabrication in trying to justify the 'policy'. Laos and Burma are more than willing to supply at the present rates or less and whilst Thai's at large tend to mistreat these foreigners more from a social contempt attitude than physical abuse, when it hits Thai's in the pocket, the decisions will more than likely be a spontaneous reaction. The numbers in the next few months - if anyone can rely on the sanitised reporting of the Thai media - should rebuke Phadermchai's drivel and denial.

[philw]

Empirical studies around the world have shown a very weak correlation between increasing the minimum wage and unemployment

Try not to introduce logic, some on here cannot handle it...........

You are right though.

[transam]

My local big DIY store has zillions of staff standing around having a laugh doing nothing. BUT, they have an income. If it is raised, without a doubt half of them could be laid off with no affect on the running of the store.

[Rich teacher]

I think these people in Govt are way out of touch. The price hike will cause a lot of Thai owners to simply seek alternative labour. Numbers quoted here are just a fabrication in trying to justify the 'policy'. Laos and Burma are more than willing to supply at the present rates or less and whilst Thai's at large tend to mistreat these foreigners more from a social contempt attitude than physical abuse, when it hits Thai's in the pocket, the decisions will more than likely be a spontaneous reaction. The numbers in the next few months - if anyone can rely on the sanitised reporting of the Thai media - should rebuke Phadermchai's drivel and denial.

So how is the reduction in corporate tax from 30 to 23% (& to 20% next year) going to affect these businesses then?

[rubl]

"Many industries are facing a shortage of labour," Labour Minister Phadermchai Sasomsap said Wednesday, adding that there were more than 300,000 vacancies across the country.

Like in other countries there might be a slight mismatch between the skills set sought by employers and the skills set offered by unemployed. Mind you, if there is a match an unemployed farmhand will probably get government support to get that highly priced 300 Baht a day job down South ?

[OzMick]

Empirical studies around the world have shown a very weak correlation between increasing the minimum wage and unemployment

A link to one where the increase is in the order of 25-50% would be much more credible than your blanket statement.

[rakman]

I think these people in Govt are way out of touch. The price hike will cause a lot of Thai owners to simply seek alternative labour. Numbers quoted here are just a fabrication in trying to justify the 'policy'. Laos and Burma are more than willing to supply at the present rates or less and whilst Thai's at large tend to mistreat these foreigners more from a social contempt attitude than physical abuse, when it hits Thai's in the pocket, the decisions will more than likely be a spontaneous reaction. The numbers in the next few months - if anyone can rely on the sanitised reporting of the Thai media - should rebuke Phadermchai's drivel and denial.

So how is the reduction in corporate tax from 30 to 23% (& to 20% next year) going to affect these businesses then?

Remember, Corporations don't pay taxes, they raise their prices to pay the taxes. With competition, and a reduction in corporate tax rates (assuming no changes in deductions) the prices will go down, volume up and more money ends up in the treasury. Do the reverse and the treasury gets less.

[rubl]

I think these people in Govt are way out of touch. The price hike will cause a lot of Thai owners to simply seek alternative labour. Numbers quoted here are just a fabrication in trying to justify the 'policy'. Laos and Burma are more than willing to supply at the present rates or less and whilst Thai's at large tend to mistreat these foreigners more from a social contempt attitude than physical abuse, when it hits Thai's in the pocket, the decisions will more than likely be a spontaneous reaction. The numbers in the next few months - if anyone can rely on the sanitised reporting of the Thai media - should rebuke Phadermchai's drivel and denial.

So how is the reduction in corporate tax from 30 to 23% (& to 20% next year) going to affect these businesses then?

As the Corporate Tax reduction was rushed through in September 2011, it's more a question of 'how does it effect' rather than 'how will it'. No data available, I think. The reduction in Corp. Tax was meant to compensate for the 'to be implemented' 300 baht/day minimum wage, although the Government Policies for the first year only list "1.9 Reduce Corporate Income Tax to 23% in 2012 and to 20% in 2013 so as to generate competitiveness of the private sector, to broaden the tax base and to support entry to the ASEAN Community in 2015.". Personally I wouldn't be surprised if the companies which profit most from the Corp. Tax reduction are also the companies accounting for a only small percentage of labourers effected by the minimum wage increase. Maybe I'm just too cynical

[Soi Sauce]

Said it before; Screw the economy, devalue the baht, then buy the country up on the cheap.

Easy to see this has been the policy of ptp since day one.

Can anyone think of any country ever where the gov have systematically and deliberately downgraded the economy to line their own pockets and get votes? Rice pledging and minimum wage.

Also, can anyone think of any gov that wants to use its country's money to invest in expanding the economy of a neighbour and competitor when it could bulld the same on its own turf? Daweii and wherever on the massive Thai coastline.

Add your own examples. Run by a fugitive, fake reds, honest mistakes etc.

Be nice to hear them.

[fstarbkk]

"Many industries are facing a shortage of labour," Labour Minister Phadermchai Sasomsap said Wednesday, adding that there were more than 300,000 vacancies across the country.

Like in other countries there might be a slight mismatch between the skills set sought by employers and the skills set offered by unemployed. Mind you, if there is a match an unemployed farmhand will probably get government support to get that highly priced 300 Baht a day job down South ?

In Thailand there is a huge mismatch between the skill levels of the available labour-pool and the requirements of potential employers. This is a direct result of the abysmal education system.

Half the employees at our Thai subsidiary would not get a job at any of our overseas locations. We have to settle for the barely-qualified and invest massively in in-house training and redundant checking, to achieve acceptable results for export.

Yes, these people work for less, but a lot of this perceived economy is eaten up by poor skill and performance, compared to their peers abroad. And no, these are not 300 Baht factory jobs.

The government owes its people much more than populist handouts, like a decent education to prepare them for global competition. Any improvements in standard of living from the new minimum wage will evaporate within a year, from the inevitable inflation following in its wake.

The only people who benefit are the politicians who are "buying" votes with other people's money.

[hellodolly]

So over a thousand layoffs in 5 factories is no big deal. How many factories are there in Thailand? How many pay the average worker less than B300 a day? How many Cambodians and Burmese are willing to work for less than B300 a day?

How Many of these people that own these factories, have already or are willing to move to another country, to maintain their profit margins?

I think everybody has noticed, since Yingluck and her populous promises have kicked in. The price of everything from food to building supplies have gone up 5 to 15%+, and it not because the world economy is on fire.

O guess it is just a point of view as to the following Paragraph.

"However, Labour Welfare and Protection Department director-general Pakorn Amorncheewin said that as of Tuesday, only 1,072 workers at five factories had been laid off due to the initial wage increase in seven provinces in April"

To the Government it is small but what they failed to mention and is of great importance is that the provinces that made the raises are some of the highest paid in the country. Wait and see what the returns are after they implement it in the lowest paid provinces.

A big difference between a 20% raise and a 40% raise.

Look om the bright side 7/11s won't be crowded with workers at those wages.

Along with running off at the mouth about the 300,000 jobs available the Government might tell the workers where they are and are they for unskilled workers.

Do they expect the people to travel all over the country looking for these 300,000 jobs that is bound to be a low number when the new rates come in.

[Mosha]

In the OP, it doesn't say how many those 5 factories employed before the layoffs

[Moruya]

Thailand's work force is largely unskilled and used as a means of cheap labour.

The businesses that use this labour are very mobile. They can easily relocate. Some have already done so.

Some companies have increased wages but scaled back perks or increased working hours or layed off staff. For sure we will see more of this to some degree.

The proof of the pudding will be in the eating.

[metisdead]

Inflammatory and insulting posts have been removed as well as the replies.

[angsta]

If you can't afford to pay 300 baht a day then you shouldn't be in business in Thailand.

Some of the above responses would be funny if they were not being so serious.

If you don't like the price of things here then please do us all a favor and leave.

[caughtintheact]

This is not just about layoffs, which are bad enough. One has to look at the impacts on all groups, not just those addressed by the legislation. The people who get the minimum wage increases already hold jobs. How about the people looking for jobs that will not be hired because of the minimum wage increase? Who's thinking about these people? Apparently no one. Who needs the jobs the most? Usually the poor and the young and inexperienced. Who gets hurt the most? The answer is the same - the poor, young and inexperienced who need jobs for training so some day they will have skills that earn them more money.

The reason that some studies may show a weak correlation between minimum wage increases and unemployment is because those studies do not count people who can no longer get jobs because of higher costs caused by the minimum wage increase.

[Moruya]

If you can't afford to pay 300 baht a day then you shouldn't be in business in Thailand.

Some of the above responses would be funny if they were not being so serious.

If you don't like the price of things here then please do us all a favor and leave.

I think you need a cop of hot, sweet tea and a dose of reality.

Labour intensive businesses selling low mark-up products will take a big hit. That will include a lot of Thai SMEs

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