Smaller Thai Industries Soon To Be Shaken By Minimum Wage Requirement

[Thai at Heart]

My mates textile company up country doesn't have enough capacity to keep up.

390 a day plus performance bonus.

So how much profit is your mate making? Paying his workers eight quid a day for slaving over a sewing machine all day, and probably boasting that he is paying above the average. No wonder the Thai girls are flocking to tourist areas to sell their bodies as soon as they reach sixteen. Shameful.

.well we can flog that donkey forever. All i know is that he has requirements for more labour at the moment.

It isn't his fault the global price for his product us what it is. I don't know if his company us any more or less profitable than another. And no he doesn't boast about it, but his company have looked at moving, and as yet, no plans to go.

[jbrain]

My mates textile company up country doesn't have enough capacity to keep up.

390 a day plus performance bonus.

So how much profit is your mate making? Paying his workers eight quid a day for slaving over a sewing machine all day, and probably boasting that he is paying above the average. No wonder the Thai girls are flocking to tourist areas to sell their bodies as soon as they reach sixteen. Shameful.

What holds you back to save the world and open a factory upcountry and pay them 300 Baht an hour ?

[Robby nz]

Just got back from a trip to Sanklaburi and the Burma border and see small factories up there employing Burmese girls for 90 B a day

Doubt the 300 B a day will affect them.

However the Mrs sister was real pissed off when the Co she works for had to start paying the 300 B for it is her job to teach the younger, new girls the job and she was already getting 300B now the ones she is teaching are getting the same.

The teacher getting paid the same as the pupils.

[KhunOr]

So, a policy designed to help lower-wage Thais will instead only help them to become unemployed.

Socialism in action.

You don't get it do you?

There is a labour shortage in Thailand.

Whenever there are labour shortages, wages increase. The government has been keeping the wages down to benefit business.

Unemployment is only 0.6%

Geriatrickid, could you kindly enlighten us with your superior knowledge of Thai government and labour law and tell us how "the government has been keeping the wages down to benefit business". I am not aware of any such law or stipulation, past or present. There is a minimum wage of course, but that does not stop employers from offering more when it is expedient to do so, such as when the particular type of labour required is in short supply, or to encourage good employees to stay and not jump ship to a higher paying employer, as is their right.

[annabel]

So, a policy designed to help lower-wage Thais will instead only help them to become unemployed.

Socialism in action.

You don't get it do you?

There is a labour shortage in Thailand.

Whenever there are labour shortages, wages increase. The government has been keeping the wages down to benefit business.

Unemployment is only 0.6%

Geriatrickid, could you kindly enlighten us with your superior knowledge of Thai government and labour law and tell us how "the government has been keeping the wages down to benefit business". I am not aware of any such law or stipulation, past or present. There is a minimum wage of course, but that does not stop employers from offering more when it is expedient to do so, such as when the particular type of labour required is in short supply, or to encourage good employees to stay and not jump ship to a higher paying employer, as is their right.

I don't know but I find that at the end of the day money doesn't really matter to the so called Thais who have Huge EGO problems whether they are Maebans or in Managerial positions... I have had managers that I paid up to 12,000 baht a month ( and that was 4 years ago) and Maebans at 8,000 Baht / month who just walked out on me without any notice whatsoever because i reprimanded them for something really stupid that they did that cost me a considerable loss of revenue and a considerable amount to replace / repair damages ... not only did they (4 of them ) walk out and not give a decent notice but then sent ( not called to talk about it ) a message through someone else to demand 1 month salary .... Pffffff!! there is no loyalty with employees here at all no matter how much you give... high salary, bonuses, B/day / N,Years bonus' and presents ++ overtime ++ built in tips and on and on ... doesn't matter ... walk along to the next post and sometimes it is actually just a hot head reaction and they walk away to nothing ... A lot of ego here to deal with ...Well that's only My experience in my 5 years here ... maybe other people have had better experiences.... it's possible!

[Thait Spot]

So, a policy designed to help lower-wage Thais will instead only help them to become unemployed.

Socialism in action.

You don't get it do you?

There is a labour shortage in Thailand.

Whenever there are labour shortages, wages increase. The government has been keeping the wages down to benefit business.

Unemployment is only 0.6%

I don't think you get it GK

If you have a Thai family outside of Bangkok and are able to look at what the extended members do, you will see that many don't have a tied down job but work when there is work to do such as farming labour and spend a lit of time at home doing nothing.

The unemployment benefit is only for those who have been laid off and many don't bother to claim it as the application is so long winded, the amounts so paltry and the fact that there is always a roof and a plate of food back with the family that it hasn't the take up.

I would suggest you look at actual employment figures as they tell the real story.

Sent from my Nexus 7 using Thaivisa Connect App

[DLock]

It's very easy to see those that studied Economics in school and those that did not.

Thailand is in the middle of South East Asia - believing that this wage increase will somehow benefit Thailand in the context of competing economies is simply naive and short sighted. The surrounding countries are high-fiving each other right now over the economic gift handed to them on a plate.

The Government has shown their economic prowess with the rice pledging scheme, and managed to relegate Thailand from the number 1 supplier to number 3 in one year, despite warnings from analysts and banks....and they plan to continue the folly. And reducing tax was an awesome move. Borrowing more than they need. Brilliant.

So, keep cheering the 300baht wage increase as progress for Thailand's masses. Ignorance is bliss.

[mrtoad]

Minimum wages in far more established developed countries have already proven to be a significant burden on small and medium enterprises. With the current openoing up of ASEAN, and the development of neighboring countries, Thailand could find a lot of companies looking to relocate where there is no minimum wage. When that happens, who actually loses out? I think the idea at present is total folly on the part of PT. None of the populist economic policies that PT has wheeled out have been for the long terma stability of the country, but more to ensure that PT and it's cronies can bleed the pot dry for as long as possible. A house built on sand.

[Thai at Heart]

Minimum wages in far more established developed countries have already proven to be a significant burden on small and medium enterprises. With the current openoing up of ASEAN, and the development of neighboring countries, Thailand could find a lot of companies looking to relocate where there is no minimum wage. When that happens, who actually loses out? I think the idea at present is total folly on the part of PT. None of the populist economic policies that PT has wheeled out have been for the long terma stability of the country, but more to ensure that PT and it's cronies can bleed the pot dry for as long as possible. A house built on sand.

There are rafts of studies either way.

Having a huge amount of your population on wages so low that they can't buy anything isn't exactly good for business either.

Pay people so little that they are treated like monkeys and you create monkeys.

As on everything moderation is the key and, this big jump may be a stretch to far. Gradually would probably have been better. There will be some unemployment created by this, but there will also be a bump in consumption and possibly some capital investment too, so it is not so simple as to believe that the effects of this change will be universally negative.

Edited January 4, 2013 by Thai at Heart

[mrtoad]

Gradual increases are far more sustainable and with far less pain. I don't think for one moment that the policy was done for any other reason than to win votes.

[Thai at Heart]

Gradual increases are far more sustainable and with far less pain. I don't think for one moment that the policy was done for any other reason than to win votes.

Well, if it puts millions out of a job it won't be much of a vote winner next time.

Increases in the minimum wage have lagged inflation since the 97 crisis. This has many complicated effects, least of which is protecting inefficient businesses from inflation at the expense of the employees.

of course the theoretical understanding of supply and demand stands, but on employment markets, there are also possibilities of collusion by business to keep wages low and many other distorting factors on the demand side that can keep wages below equilibrium.

Edited January 4, 2013 by Thai at Heart

[ratcatcher]

Minimum wages in far more established developed countries have already proven to be a significant burden on small and medium enterprises. With the current openoing up of ASEAN, and the development of neighboring countries, Thailand could find a lot of companies looking to relocate where there is no minimum wage. When that happens, who actually loses out? I think the idea at present is total folly on the part of PT. None of the populist economic policies that PT has wheeled out have been for the long terma stability of the country, but more to ensure that PT and it's cronies can bleed the pot dry for as long as possible. A house built on sand.

There are rafts of studies either way.

Having a huge amount of your population on wages so low that they can't buy anything isn't exactly good for business either.

Pay people so little that they are treated like monkeys and you create monkeys.

As on everything moderation is the key and, this big jump may be a stretch to far. Gradually would probably have been better. There will be some unemployment created by this, but there will also be a bump in consumption and possibly some capital investment too, so it is not so simple as to believe that the effects of this change will be universally negative.

I fear that the rafts you mention may be needed in the not too distant future, when the Thaitanic meets the fiscal iceberg that is known to exist but hasn't yet shown up on PTP's radar.

To paraphrase Honest Abe,

You can please some of the people all of the time, and all of the people some of the time, but you can not please all of the people all of the time.

Which is what PTP seems to be trying to do.

[Thai at Heart]

Minimum wages in far more established developed countries have already proven to be a significant burden on small and medium enterprises. With the current openoing up of ASEAN, and the development of neighboring countries, Thailand could find a lot of companies looking to relocate where there is no minimum wage. When that happens, who actually loses out? I think the idea at present is total folly on the part of PT. None of the populist economic policies that PT has wheeled out have been for the long terma stability of the country, but more to ensure that PT and it's cronies can bleed the pot dry for as long as possible. A house built on sand.

There are rafts of studies either way.

Having a huge amount of your population on wages so low that they can't buy anything isn't exactly good for business either.

Pay people so little that they are treated like monkeys and you create monkeys.

As on everything moderation is the key and, this big jump may be a stretch to far. Gradually would probably have been better. There will be some unemployment created by this, but there will also be a bump in consumption and possibly some capital investment too, so it is not so simple as to believe that the effects of this change will be universally negative.

I fear that the rafts you mention may be needed in the not too distant future, when the Thaitanic meets the fiscal iceberg that is known to exist but hasn't yet shown up on PTP's radar.

To paraphrase Honest Abe,

You can please some of the people all of the time, and all of the people some of the time, but you can not please all of the people all of the time.

Which is what PTP seems to be trying to do.

Look, i went through the costings with an old colleague in a very large agro export firm about this recently. The increase in fob cost was 0.4% attributable to labour cost.

They are more scared about the upcoming electricity increases.

They just passed the increase onto their customers. Job done.