Firms In North Hurt By Minimum Wage Rise, Want More Govt Help

[Lite Beer]

Firms in North hurt by minimum wage rise, want more govt help

BANGKOK: -- Vice Minister for Labour Visa Khanthap presided over a workshop on SMEs at Lampang Rajabhat University yesterday. He said Lampang had 4,125 business establishments in 28 fields (especially food, wholesale/retail, wooden furniture, ceramics and glass) covering 57,523 employees - most of them were SMEs.

In January-February, 1,003 Social Security Office subscribers claimed compensation for unemployment and only 18 complaints were filed about not getting the Bt300 wage.

Athiphum Khamthonwararin, honorary chair of Lampang Industrial Council, said that following the hike businesses in the province cut 10-30 per cent of "ineffective" workers, hence productivity and income lowered. And firms had shifted from daily hiring to wages paid according to the amount of work done. Athiphum said that only some of 15 alleviation measures by the government would help, while some were almost useless. What they wanted most was a fund to help pay for the difference from the old daily minimum to the new wage - but the government had ignored that idea, he said.

He also urged the government to cut the criteria for loans because many were hit hard by the wage hike and the energy price hike next month would add to costs. He warned that 10 per cent of the area's 1,200 makers of wooden furniture and ceramics could fold by June.

Lampang Silapanakhon owner Kittisak Sinwanasap said his ceramics company had 265 workers - 30 of whom didn't yet get the wage hike to Bt300 as they were inexperienced newcomers. If the company could increase the price of ceramics, he would hike the workers' payment. Wage rates in the province had leapt from Bt165 per day in 2011 to Bt300 in 2013 - 40 per cent, leading to many SMEs to quietly shut down. Some support measures such as tax reduction by government weren't accessible to Lampang firms, as most were family-run, he said, and urged the government to talk with banks to be less strict in considering loans for SMEs.

-- The Nation 2013-03-10

[RisqEM]

In a country with a 30% or so corruption surcharge and people moving ungodly amounts of money under the table they're worried about $10USD. a day???

But then again, I wouldn't want to pay someone to play FarmVille all day or smoke cigarettes all the time.

[chainarong]

What was the supposedly minimum wage before the governments hike, 220 baht a day ????, looks to me that an government independent audit of these companies should be carried out , me thinks this is just an excuse to scam some money from the government.

[otherstuff1957]

^According to this article the mininum wage was 165, not 220.

First they say that the fired workers were the "most ineffective" by which I assume that they mean inefficient, and then they say the productivity has declined! Bad reporting or lack of logic?

[kimamey]

^According to this article the mininum wage was 165, not 220.

First they say that the fired workers were the "most ineffective" by which I assume that they mean inefficient, and then they say the productivity has declined! Bad reporting or lack of logic?

I suppose they would lose what little productivity the ineffective workers were doing but I do wonder about these figures sometimes.

[tomross46]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them.

[nevets]

When i went to Chang Mai some years ago the furniture was a high price for falang to buy but the workers where on a pityful wage.

[aTomsLife]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them.

If what you say is accurate -- that these firms are comprised of Red Shirts -- then the government already supported these people by implementing the 300 baht a day wage. If anything, this is a matter of being careful what you wish for. All businesses make changes to adapt to the cost of higher labor, and those changes almost always involve a reduction in employees. The higher costs of doing business are passed on -- either to the employee, as we see here, or to the customer -- not absorbed by a company's elites. And even when the higher costs are passed on to the customer in the form of higher prices, this typically results in lower sales, and thus eventually less employees required for production. Edited March 10, 2013 by aTomsLife

[shaurene]

These companies must have had so many workers not doing possitive work and now they complain about the wage increase. Hard to understand them.

[Robby nz]

Lampang Silapanakhon owner Kittisak Sinwanasap said his ceramics company had 265 workers - 30 of whom didn't yet get the wage hike to Bt300 as they were inexperienced newcomers. If the company could increase the price of ceramics, he would hike the workers' payment. Wage rates in the province had leapt from Bt165 per day in 2011 to Bt300 in 2013 - 40 per cent, leading to many SMEs to quietly shut down. Some support measures such as tax reduction by government weren't accessible to Lampang firms, as most were family-run, he said, and urged the government to talk with banks to be less strict in considering loans for SMEs.

A little simple maths from the above shows the Co would have to find an extra 31,725 B per day to cover the increase in wages for the 235 employees who got the full wage rise.

If you multiply that by a 25 day month it comes to over 793,000B

Little wonder some employers are scratching their heads wondering if they can survive.

[chainarong]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them.

The chickens have come home to roost.

[LuckyLew]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them.

Not in my opinion, these people up north voted the PTP in for their populist policies

Hopefully now they see the errors of their way and vote for a different color next time

I wonder how far the 500 or so baht they received for their vote is going now that they are

losing their jobs

[rubl]

"the energy price hike next month"

Was this planned a long time already? I read a week ago that the possibly only alleged shortage and extra effort to keep electricity production at the right level would NOT cause a price hike. Puzzling

[ozziebloke]

I have to ask those against the wage increase to 300Bt? Where do you think the money goes from the lowest paid? I would suggest it goes back to all those companies that employ all the low imcome workers! They dont have the ability to save their income, it goes on day to day commodities to survive. Remove that income from the economy and you will have a detromental effect on most companies in Thailand. It is a cicular way of using the Baht

[whybother]

I have to ask those against the wage increase to 300Bt? Where do you think the money goes from the lowest paid? I would suggest it goes back to all those companies that employ all the low imcome workers! They dont have the ability to save their income, it goes on day to day commodities to survive. Remove that income from the economy and you will have a detromental effect on most companies in Thailand. It is a cicular way of using the Baht

They should increase it to 1000 baht a day then. The companies will be wrapped with the extra spending by the workers.

Of course, a lot of these companies are exporting their products, so it won't be much help to them.

[ozziebloke]

I have to ask those against the wage increase to 300Bt? Where do you think the money goes from the lowest paid? I would suggest it goes back to all those companies that employ all the low imcome workers! They dont have the ability to save their income, it goes on day to day commodities to survive. Remove that income from the economy and you will have a detromental effect on most companies in Thailand. It is a cicular way of using the Baht

They should increase it to 1000 baht a day then. The companies will be wrapped with the extra spending by the workers.

Of course, a lot of these companies are exporting their products, so it won't be much help to them.

Yes these companies do as well as selling domestically. And the ones exporting are usually getting a higher BAHT with the exchange rate compared to domestically.And yes if you increase the average wage it benifits the local economy

[Noistar]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them.

Not in my opinion, these people up north voted the PTP in for their populist policies

Hopefully now they see the errors of their way and vote for a different color next time

I wonder how far the 500 or so baht they received for their vote is going now that they are

losing their jobs

I think you'll find that the average PTP supporter/ red shirt, will never put 2 and 2 together. Any adverse effect is not down to their beloved leader and his cohorts. I'm sure the red supporters will be quick to lay the blame firmly where it belongs - Abhisit 55555

[Mosha]

I have to ask those against the wage increase to 300Bt? Where do you think the money goes from the lowest paid? I would suggest it goes back to all those companies that employ all the low imcome workers! They dont have the ability to save their income, it goes on day to day commodities to survive. Remove that income from the economy and you will have a detromental effect on most companies in Thailand. It is a cicular way of using the Baht

That increase to 300 Baht has been swallowed up by basic commodity price rises. eg drinking water in the large containers went up 20%. They never had money to save before and they don't now.

Meanwhile with the ever strengthening Baht. They'll be soon exporting SFA

Edited March 10, 2013 by Mosha

[Locationthailand]

The stupidity of this whole thing is, the implemented election promise was lauded by these poor people but it resulted in companies turning out a lot of employees, to be able to retain and be able to pay the lucky ones remaining. You can't make promises such as this without affecting thousands of jobs. So the Red voters supported their heart throb and now they have their just deserts. Som Num Na. No sympathy whatsoever, especially as they are stupid enough to continue to support this tragic movement.

Edited March 10, 2013 by Locationthailand

[ongchart]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them. If what you say is accurate -- that these firms are comprised of Red Shirts -- then the government already supported these people by implementing the 300 baht a day wage. If anything, this is a matter of being careful what you wish for. All businesses make changes to adapt to the cost of higher labor, and those changes almost always involve a reduction in employees. The higher costs of doing business are passed on -- either to the employee, as we see here, or to the customer -- not absorbed by a company's elites. And even when the higher costs are passed on to the customer in the form of higher prices, this typically results in lower sales, and thus eventually less employees required for production.

The companies theoretically should be able to pass some increased costs to consumers, since a lot of these consumers would have higher income now. Of course it is up to the consumers how they are going to spend (or save) that increase in income.

[NeverSure]

Yes, increasing the minimum wage helps the whole economy. Since that is true, let's just increase it to 10,000 baht per day. That way everyone will be rich and Thailand will be the new Dubai of SE Asia.

Oh wait. If you increase, then costs of everything go up. Then the new wage doesn't buy more than the old wage. Also people get laid off.

There will always be people who are on the bottom. Raise the bottom rung and every rung is raised. There just may be less room on that bottom rung for even the poorest.

[Theoutsider]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them.

Not in my opinion, these people up north voted the PTP in for their populist policies

Hopefully now they see the errors of their way and vote for a different color next time

I wonder how far the 500 or so baht they received for their vote is going now that they are

losing their jobs

they didn't vote for populist policies,

you could of stuck a red ribbon on a monkey and they still will of voted for it

[tominbkk]

Send your complaints to the boss in Dubai.

[Theoutsider]

Send your complaints to the boss in Dubai.

what his address.

[waza]

More red snouts looking for a turn at the trough. Like all businessmen they are looking to maximise their returns, they have done very well from the cheap labour and now are unhappy with the increase in wages eating into their profit margin and want some compensation to return the status quo. What will be interesting is what happens if they don't get it?

[hellodolly]

The majority of the companies in the North are supporters of the PTP and should be supported. These companies got there employees out to vote for the elected government and had them also join the Red Shirts. They went along with the policy of the minimum wage. Now it is time for the government they helped put in office support them.

Not in my opinion, these people up north voted the PTP in for their populist policies

Hopefully now they see the errors of their way and vote for a different color next time

I wonder how far the 500 or so baht they received for their vote is going now that they are

losing their jobs

they didn't vote for populist policies,

you could of stuck a red ribbon on a monkey and they still will of voted for it

You are talking about the gifted ones I presume.

[Robby nz]

One of the problems is that some see the wage increase as an opportunity to get things they want rather than need with no thought to saving. Never done it before so why start now?.

We just got an extra 100b a day now we can get a new TV, Motorcy, whatever, only needs a small deposit. Don't think about the payments to much we have 3000 a month more no trouble, have a beer to celebrate.

Then there is the new car, Yingluck will give us 100kb if we put it in grandmas name.

And so the debt burden grows.

I wonder how many of the Issan families talked about are not in some sort of debt?

Cant be many I would think and what would the overall private debt burden be in this country, probably equal or more than the public debt.

[waza]

One of the problems is that some see the wage increase as an opportunity to get things they want rather than need with no thought to saving. Never done it before so why start now?.

We just got an extra 100b a day now we can get a new TV, Motorcy, whatever, only needs a small deposit. Don't think about the payments to much we have 3000 a month more no trouble, have a beer to celebrate.

Then there is the new car, Yingluck will give us 100kb if we put it in grandmas name.

And so the debt burden grows.

I wonder how many of the Issan families talked about are not in some sort of debt?

Cant be many I would think and what would the overall private debt burden be in this country, probably equal or more than the public debt.

Bonded labour - or debt bondage - is probably the least known form of slavery today, and yet it is the most widely used method of enslaving people.......In South Asia it is rooted in the caste system and flourishes in agriculture, in cottage industries, and in factories........Poverty and threats of violence force many bonded labourers to stay with their masters, since they would not otherwise be able to eat or have a place to sleep. http://www.antislavery.org/english/slavery_today/bonded_labour.aspx

Welcome the the Redshirt movement and the cult of Thaksin.

Edited March 11, 2013 by waza

[ozziebloke]

Yes, increasing the minimum wage helps the whole economy. Since that is true, let's just increase it to 10,000 baht per day. That way everyone will be rich and Thailand will be the new Dubai of SE Asia.

Oh wait. If you increase, then costs of everything go up. Then the new wage doesn't buy more than the old wage. Also people get laid off.

There will always be people who are on the bottom. Raise the bottom rung and every rung is raised. There just may be less room on that bottom rung for even the poorest.

Being realistic, raising the minimum wage to a reasonable income and not below the poverty line benefits the local economy. When people do have a income that gives them a little more to spend they tend to spend in healthier commodities ( healthier diet ) which in turn puts less strain on the health system and some do tend to be able to save, extra money spent in the local towns, benefits all around, The claim is always that increasing the lowest wage will always cost jobs is not founded! It is productivity that effects jobs not minimum wages

[Robby nz]

Don't know how many of you get out and wander around markets and such but I do and looking at the labels on clothes, shoes and some other things I see an increasing number of items made in China.

Even though there are industries here in Thailand that produce the same or similar.

In NZ we once had all the home grown industries, clothing, cars etc and they have now all but disappeared and been taken over by Chinese imports, Japanese used cars. This has pretty near wiped out all the NZ industries.

A large wage increase all in one go can only help to make the Thai industries, particularly the smaller ones less competitive in what is indeed a world market.

Slowly increasing wages over a managed period of time in line with growth would seem a better way of doing things.

It also avoids the aforementioned 'Wow now were rich thing'