Operators Seek Bt140 Billion To Offset New Minimum Wage Losses

[webfact]

Operators seek Bt140 billion to offset new minimum wage losses

By Digital Media

BANGKOK, Dec 24 - Almost one million private enterprises in Thailand are unready to cope with the Bt300 daily minimum wage, effective January 1 nationwide, and risk having to close down, a university survey disclosed today.

At least 640,000 workers will be laid off – many of whom may turn to the agricultural sector while some will be forced to work outside the legal employment system.

The survey was conducted by Dhurakij Pundit University (DPU) with a sample size of 1,344 people and in-depth interviews with 50 operators of small- and medium- enterprises (SMEs) in 21 provinces.

Kiat-anan Luankaew, DPU Research Centre director, said a comparison in September 2011 and this year found 640,000 more workers leaving their jobs for the agricultural sector despite the National Statistical Office’s earlier report of over 300,000 persons newly employed in the country this year.

In September this year, 510,000 workers in the hospitality/food service and 400,000 others in the automotive/motorcycle maintenance sector lost their jobs, some were re-employed in other industrial sectors and the remainder turned to agriculture.

According to the survey, nearly 87 per cent of operators deferred making new employments, nearly 75 per cent slashed expenditures on long-term investment, 62 per cent improved their employee efficiency and 57 per cent increased the prices of their products and services.

Establishing a fund to offset the increased amount of the daily wage is seen by 62 per cent of the operators as the best solution.

The operators proposed a staggered system with a payment ratio between the government and the private sector at 75:25 next year, 50:50 in 2014 and 25:75 in 2015. If implemented, the government’s total subsidy for the three-year scheme will be Bt140 billion.

They said the government, running out of time, should enforce the best solution by setting up the fund which will help SME operators cope with the changes and strengthen the country’s economic system.

“This is not a populist policy. If the measure fails to materialise, it will accelerate the demise of SMEs while newly-emerged SMEs will turn to technology, not labour force, in their production,” operators were quoted as saying.

“Rural factories will be moved to suburban Bangkok, a shift that will contribute to urban and rural disparities and worsen upcountry employment in the next five years.”

Mr Kiat-anan said Thailand’s economic growth will be 3.9-4.2 per cent next year thanks to the government’s consumption stimulation measures but the global economic slowdown which will continue to have an impact on Thailand’s exports remains a concern. (MCOT online news)

-- TNA 2012-12-24

[whybother]

They've had 18 months to prepare. If they're not ready now, they'll never be ready.

[Kilgore Trout]

Like any other law in los, will it be enforced or just arbitrarily enforced against those w/out connections?

Sent from my GT-S5660 using Thaivisa Connect App

[Thait Spot]

Sounds to me like the Thai government has been gilding the lily with its employment figures and financial reporting.

Sent from my Nexus 7 using Thaivisa Connect App

[bhakta]

It appears to me that prices on more or less everything have already been raised. Everytime I go out and am pretty amazed at how costly Thailand has become

Over the years the LOL has become the land of greed, like many other so-called developed countries. No one can tell me that Thailand is a sweeter place than it was 30 years ago when I arrived.

[impulse]

This ought to solve the looming labor shortage they ran up the flagpole last week...

http://www.thaivisa....h&fromMainBar=1

Edited December 24, 2012 by impulse

[Thai at Heart]

140 bn, 1mn businesses.

5k USD per company?

[ChrisY1]

The Thb300 daily wage will come into effect on January 1.......but...very few...if any companies will abide the ruling.

How could the authorities enforce these rulings on something like ~1Mill. small businesses....what are the implications of not complying....even if there have been months for the preparation of these new wage limits...this is Thailand....mai phen rai

[Bluespunk]

I don't like PT nor their jackboot approach to politics but the 300 baht a day policy is one of their few good points. Employers rarely want to raise wages, but it is wrong to employ people at poverty level wages and unless workers are given a decent wage then demagogues like the red shirt leadership will continue to find followers.

Edited December 24, 2012 by Bluespunk

[siampolee]

Very easy to spend other people money so as to enhance election results.

This current P.T.P. influenced coalition maladministration have indeed proved yet again that their puppet master and the general membership group in Parliament elected or otherwise are intent on only one thing. Self gratification financially and power wise , the road to this end has and still is robbing the the electorate and the state coffers yet again.

[MaxLee]

New Years' resolution?

- Get more corrupt

- get even more corrupt until the no ends...

- get more into debts, with the rice scams, the first car-scam, the wage hike SCAM, FAKE MEGA FLOOD PROJECT SCAMS

- continue to mindf***** kids and students with the ongoing education system by adding more complicated condition to make exams and entrance to universities even harder, not smarter

- continue to promote the greatest Mafia the TAT and encourage even more SCAMS, continue to delay the 3G Finalization process, , just in order to delay it to another FINAL FINAL FINAL VERSION, to delay it fro another century

- continue to support the feudalistic systems and try to disclose themselves from the modern economy, in order to preserve and hide FACE more thanever

New Year's resolution

[noob7]

Is there any survey, checking on prices, that these 1 million 'unready' companies are charging their customers now/next year??

Wouldn't be surprised, if it is only the payment side unready, but not the charging side!

I see the idea, rising the salary of the workers on cost of the taxpayers, instead of the employees, here.

Another copy from the first world systems?

[mic6ard]

so let me get this straight,

1. people will lose their job so that employer can pay the remaining employee more

2. people will be either a: enter into unemployment which results in the state paying them benefits.

b: enter another sector - the best option really

c: go back to farming - not even guaranteed to get 300/d wage as most would be returning to their family.

3. decrease taxes on various areas (decrease taxes on the rich so they can pay the poor people more???)

to summarize: the state is decreasing intake (taxes), and paying more (unemployment benefits)????

[Pib]

They've had 18 months to prepare. If they're not ready now, they'll never be ready.

My bet is on the "...they'll never be ready."

[kimamey]

I don't like PT nor their jackboot approach to politics but the 300 baht a day policy is one of their few good points. Employers rarely want to raise wages, but it is wrong to employ people at poverty level wages and unless workers are given a decent wage then demagogues like the red shirt leadership will continue to find followers.

Whilst I agree that it's a good idea to raise the wages of the lower end of the workforce I don't think this is the right way. But then again I suspect that the real reason was to tempt the poorer voters with the promise of a large pay rise so they would vote for the PTP.

This policy was obviously flawed from the start as everything has been done the wrong way. A point which would have or should have been known by those in business who proposed it.

If you want to raise the minimum wage the best way is to raise it slowly at a rate slightly above the rate of other pay rises. That way it's not such a huge impact on the businesses concerned. I know this is the way it was done in the UK and is probably the way it's done elsewhere. Clearly this isn't such a good way to get voters to vote for you.

When you do this it should be done on the hourly rate not daily so that if you have someone who only works for instance 6 hours a day they aren't paid the same as another who works 8 hours. I don't know of another country who has changed their minimum wage in this way.

This 300 baht minimum only applies to Thais as far as I know. This probably looks as though the government is looking after Thais rather than foreign low paid workers which of course isn't the case. What it does is it makes it better for a business to employ foreign workers who can legally be paid less. I'm told some companies are moving their operations closer to the borders to take advantage of cheaper labour from neighbouring countries.

So what looks like a good policy for the low paid in Thailand, which is deserved, will most likely do nothing of the sort.

Of course as many have said companies will just get round it by increasing hours, getting rid of workers or just ignoring it. I know in the UK there is great difficulty enforcing the minimum wage, particularly amongst immigrant workers who may not be aware of the rules or unwilling to push for their rights. In Thailand with less rights and a lower and probably corruptible enforcement structure I would think that this policy will have been a success only in what it was intended to do in getting the PTP elected.

Edited December 24, 2012 by kimamey

[lemoncake]

The hard truth is a number of provinces already have had the 300 baht wage and we managed. HOWEVER staff did not increase their productivity or performance , if anything other way around.

Paying less than the minimum is impossible because its hard enough to find employees as is.

So the only outcome I am expecting is a huge jump in prices across all sectors

[tingtongfarang]

I don't like PT nor their jackboot approach to politics but the 300 baht a day policy is one of their few good points. Employers rarely want to raise wages, but it is wrong to employ people at poverty level wages and unless workers are given a decent wage then demagogues like the red shirt leadership will continue to find followers.

Whilst I agree that it's a good idea to raise the wages of the lower end of the workforce I don't think this is the right way. But then again I suspect that the real reason was to tempt the poorer voters with the promise of a large pay rise so they would vote for the PTP.

This policy was obviously flawed from the start as everything has been done the wrong way. A point which would have or should have been known by those in business who proposed it.

If you want to raise the minimum wage the best way is to raise it slowly at a rate slightly above the rate of other pay rises. That way it's not such a huge impact on the businesses concerned. I know this is the way it was done in the UK and is probably the way it's done elsewhere. Clearly this isn't such a good way to get voters to vote for you.

When you do this it should be done on the hourly rate not daily so that if you have someone who only works for instance 6 hours a day they aren't paid the same as another who works 8 hours. I don't know of another country who has changed their minimum wage in this way.

This 300 baht minimum only applies to Thais as far as I know. This probably looks as though the government is looking after Thais rather than foreign low paid workers which of course isn't the case. What it does is it makes it better for a business to employ foreign workers who can legally be paid less. I'm told some companies are moving their operations closer to the borders to take advantage of cheaper labour from neighbouring countries.

So what looks like a good policy for the low paid in Thailand, which is deserved, will most likely do nothing of the sort.

Of course as many have said companies will just get round it by increasing hours, getting rid of workers or just ignoring it. I know in the UK there is great difficulty enforcing the minimum wage, particularly amongst immigrant workers who may not be aware of the rules or unwilling to push for their rights. In Thailand with less rights and a lower and probably corruptible enforcement structure I would think that this policy will have been a success only in what it was intended to do in getting the PTP elected.

I think the minimum wage was based on a daily rate because 300bht sounds better than 37.5bht per hr,

Not sure if it applies to registered foreign workers but i do know thai nationals who get less than 70bht per day in bkk,

[kimamey]

I don't like PT nor their jackboot approach to politics but the 300 baht a day policy is one of their few good points. Employers rarely want to raise wages, but it is wrong to employ people at poverty level wages and unless workers are given a decent wage then demagogues like the red shirt leadership will continue to find followers.

Whilst I agree that it's a good idea to raise the wages of the lower end of the workforce I don't think this is the right way. But then again I suspect that the real reason was to tempt the poorer voters with the promise of a large pay rise so they would vote for the PTP.

This policy was obviously flawed from the start as everything has been done the wrong way. A point which would have or should have been known by those in business who proposed it.

If you want to raise the minimum wage the best way is to raise it slowly at a rate slightly above the rate of other pay rises. That way it's not such a huge impact on the businesses concerned. I know this is the way it was done in the UK and is probably the way it's done elsewhere. Clearly this isn't such a good way to get voters to vote for you.

When you do this it should be done on the hourly rate not daily so that if you have someone who only works for instance 6 hours a day they aren't paid the same as another who works 8 hours. I don't know of another country who has changed their minimum wage in this way.

This 300 baht minimum only applies to Thais as far as I know. This probably looks as though the government is looking after Thais rather than foreign low paid workers which of course isn't the case. What it does is it makes it better for a business to employ foreign workers who can legally be paid less. I'm told some companies are moving their operations closer to the borders to take advantage of cheaper labour from neighbouring countries.

So what looks like a good policy for the low paid in Thailand, which is deserved, will most likely do nothing of the sort.

Of course as many have said companies will just get round it by increasing hours, getting rid of workers or just ignoring it. I know in the UK there is great difficulty enforcing the minimum wage, particularly amongst immigrant workers who may not be aware of the rules or unwilling to push for their rights. In Thailand with less rights and a lower and probably corruptible enforcement structure I would think that this policy will have been a success only in what it was intended to do in getting the PTP elected.

I think the minimum wage was based on a daily rate because 300bht sounds better than 37.5bht per hr,

Not sure if it applies to registered foreign workers but i do know thai nationals who get less than 70bht per day in bkk,

I think your comment on 300 baht sounding better than 37.5 baht per hour is spot on and backs up what I said myself.

[TPI]

Sounds to me like the Thai government has been gilding the lily with its employment figures and financial reporting.

Sent from my Nexus 7 using Thaivisa Connect App

The Thai government gilding the lily! Oh come now, that would mean that they are lying to all of us! Shame on you.

[belg]

store and restaurants and everything else, just keep increasing their prices, so the 300 baht raise will end up in ... more inflation and less buying power

thai economics... what do you want when you can buy your degree

[OzMick]

think the minimum wage was based on a daily rate because 300bht sounds better than 37.5bht per hr,

Not sure if it applies to registered foreign workers but i do know thai nationals who get less than 70bht per day in bkk,

8 hr day or 10? I know several who work 12 hr days, not sure what will happen to them.

[noob7]

think the minimum wage was based on a daily rate because 300bht sounds better than 37.5bht per hr,

Not sure if it applies to registered foreign workers but i do know thai nationals who get less than 70bht per day in bkk,

8 hr day or 10? I know several who work 12 hr days, not sure what will happen to them.

30% more on everything!

Except the prices, there it will go over the 30%

[Ricardo]

so let me get this straight,

1. people will lose their job so that employer can pay the remaining employee more

2. people will be either a: enter into unemployment which results in the state paying them benefits.

b: enter another sector - the best option really

c: go back to farming - not even guaranteed to get 300/d wage as most would be returning to their family.

3. decrease taxes on various areas (decrease taxes on the rich so they can pay the poor people more???)

to summarize: the state is decreasing intake (taxes), and paying more (unemployment benefits)????

I was unaware that the Thai state pays any unemployment-benefits, but perhaps they were introduced when I was travelling earlier in the year, do you have a source please ?

[lockman]

Oh don't think the rural sector will help much, more and more larger landowners are buying small combines, while there are now sugar cane harvesters being introduced. Sure raise that minimum wage, which has and does result in more mechanisim and less employees, as well as cause inflation. The poor are who really gets hurt.

[waza]

“This is not a populist policy. If the measure fails to materialise, it will accelerate the demise of SMEs while newly-emerged SMEs will turn to technology, not labour force, in their production,” operators were quoted as saying.

Sounds more like a rort, 140 billion baht to save 640,000 jobs, that equates to 218,750 per job, or 3 years wages per employee without the employer shelling out a cent.

[beach]

Don't understand all the fuss about minimum wage. I'm paying our team since years a minimum salary of 14,000+ without having any problems and not included yearly bonus's of 20-150k each, depending on their effort. They are all happy and I'm happy too.

[vijer]

I see this as basically bull do do. There have been a lot of claims bandied about from businesses and so called experts. Some of the claims say that this increase will double most businesses costs. If that is true then most of these workers are making less than 150 baht a day, so about 3,600 baht a month. That is criminal.

Let's say the average medium sized business employs a 100 unskilled workers that make 150 baht a day, so now the company has to double their wages. So that's 100 workers times 150 baht a day, or 15,000 a day, times 24 working days is 360,000 baht a month times 12 months is 4.32 million extra the company has to shell out a year. I asked what the annual sales were at a company I teach at, they said about $120 million or about 3.6 billion baht. They employee about 150 people and I would say at least a third are highly paid. So is about 4 million baht a year going to force them to close? I doubt it. Like I said this sounds like bull do do to me.