Wage hike for some, job loss for many others

[Time Traveller]

Very interesting to find government officials excelling in math and budgeting.

Combined salary of Bt18,000 feeding five mouths plus medical expenses, and still can support a loan for investment.

And the wise do not borrow money to invest. They use their savings.

Thankfully being wise has no relationship to investment success.

[Frank James]

Topics like this always bring out the right wing trickle-downers.

[rakman]

Of course the country can afford this minimum wage: it is a matter of ensuring that the absurd tax regime that applies in Thailand ( ie, NO tax for some obscenely wealthy individuals and endless opportunities for tax avoidance by mega rich corporations) is policed adequately.

Of course the old guard don't want this. They prefer to continue living high on the hog while the vast majority get by on a pittance.

As usual, it will be those who are the least expensive who get the chop: never management or senior positions in the top-heavy, bloated bureaucracy. Disgraceful.

One basic economic mistake believed by many is that corporations pay taxes.

Corporations do not pay taxes.

They set the prices of their goods to cover their tax burden.

[icare999]

Prayuth should drop the minimum 300 baht per day policy. It is no good for thailand at all. All it does was increase inflation and job losses.

And then what? 300 baht per day? What is this? A good life? This is not just a minimum wage. This is more like a number which shows how much you need to at least survive in this country. And I am speaking of "survive" not having a "good life"

I believe the average income for rural farm workers (just published) is 27,000bht/year.

That works out at 2,250bht/month or 110bht/day (assuming a 5 day week).

we pay our farm workers 400 baht a day and thats minimum to have any sort of decent life here IMO nut then we run it forour own products and not sell. Workers also get to take surplus product for their own use.I know its well over top but we insist they actually work and they work hard. Any slackers dont last more than 1-2 days. They do at least 3 times work of ones I've seen elsewhere but we do use a lot of machinery to save labour. We've found this way we can make do with 1-2 workers when using cheap no good people wed need 5 or more and not get as good a job. Of course when we rarely have a vacancy we have a huge Q but 90% + would not last 1/2 a day and we only employ those skilled at many tasks or are abler to learn fast. SO they also do building work, building and house maintenance can use all machinery and maintain them. IMO its saved us a lot, our 2-3 workers (2 fill time and 1 half time) are happy can live a decent life. Everyone says were mad to pay so much and others pay 1/2 or less if they can and get workers who spend all time loafing around unless watched all the time.

[Trouble]

The problem you have got with wages is that they are a formed from nowhere, they need to be based on cost of living index and inflation , you need to have yard stick on which to base a pay rise , most country village Thai's live on 10,000 Baht a month , one of my crowd was offered 8,000 Baht a month in Pattaya area for hospital Xray work, anyone here on TV live on 10Thousand Baht a month ???? As for the economy , Thailand is the same as most Western countries and will be effected by word trends , lots of unemployment coming up.

You are correct in so far as your statement that wages are formed from nowhere in cases where governments try to set some kind of wage factors. The unfortunate thing is that most people when talking about wages fail to understand that labor is a commodity. In a totally free economic environment the more labor available the less the wages and the tighter the labor market the higher the wages. We often see this working freely in areas where it is difficult to get trained labor in a particular field and they offer higher wages. This of course must be weighed against economic factors in an overall sense. It is when the governments get involved in trying to promulgate a minimum wage that everything gets out of kilter. Governments tend to forget that when they try to alter one part of the equation it has an effect on the other parts of the equation. In most developed countries it is, in most cases, the cost of labor that drives the cost of products. It is pretty well accepted that a rise in wages drives up the cost of goods and therefore causes inflation. The increase in a minimum wage drives up the price of goods or services and thus costs the consumer more. It is a vicious circle. That's why government involvement in the minimum wage is usually based on a populist idea to help the people at the lowest end of the wage scale but it invariably affects the whole wage scale forcing increases along the whole spectrum. This increases costs ultimately causing inflation leaving the people at the bottom still struggling. The idea that an increase in minimum wage also stimulates spending and thus is good for the economy ends up being eaten up over time by the inflation caused. Obviously it is a lot more complicated than this but the basics are there. Never forget that labor is a commodity, like it or not, in the big scheme of things. This is the ugly reality.

Another ugly reality at least in the United States and I would assume other countries is that during the economic recession companies have learned to do more with less. Paying overtime is preferable to increasing the number of employees requiring additional health care costs, etc. More companies hire people part time as well. As the cost of labor increases and this includes benefits companies, will try to figure out ways of reducing cost. Just a fact of life. It is not the corporate structure against labor, it is just the realities of doing business.

Edited November 23, 2014 by Trouble

[trogers]

The problem you have got with wages is that they are a formed from nowhere, they need to be based on cost of living index and inflation , you need to have yard stick on which to base a pay rise , most country village Thai's live on 10,000 Baht a month , one of my crowd was offered 8,000 Baht a month in Pattaya area for hospital Xray work, anyone here on TV live on 10Thousand Baht a month ???? As for the economy , Thailand is the same as most Western countries and will be effected by word trends , lots of unemployment coming up.

You are correct in so far as your statement that wages are formed from nowhere in cases where governments try to set some kind of wage factors. The unfortunate thing is that most people when talking about wages fail to understand that labor is a commodity. In a totally free economic environment the more labor available the less the wages and the tighter the labor market the higher the wages. We often see this working freely in areas where it is difficult to get trained labor in a particular field and they offer higher wages. This of course must be weighed against economic factors in an overall sense. It is when the governments get involved in trying to promulgate a minimum wage that everything gets out of kilter. Governments tend to forget that when they try to alter one part of the equation it has an effect on the other parts of the equation. In most developed countries it is, in most cases, the cost of labor that drives the cost of products. It is pretty well accepted that a rise in wages drives up the cost of goods and therefore causes inflation. The increase in a minimum wage drives up the price of goods or services and thus costs the consumer more. It is a vicious circle. That's why government involvement in the minimum wage is usually based on a populist idea to help the people at the lowest end of the wage scale but it invariably affects the whole wage scale forcing increases along the whole spectrum. This increases costs ultimately causing inflation leaving the people at the bottom still struggling. The idea that an increase in minimum wage also stimulates spending and thus is good for the economy ends up being eaten up over time by the inflation caused. Obviously it is a lot more complicated than this but the basics are there. Never forget that labor is a commodity, like it or not, in the big scheme of things. This is the ugly reality.

Another ugly reality at least in the United States and I would assume other countries is that during the economic recession companies have learned to do more with less. Paying overtime is preferable to increasing the number of employees requiring additional health care costs, etc. More companies hire people part time as well. As the cost of labor increases and this includes benefits companies, will try to figure out ways of reducing cost. Just a fact of life. It is not the corporate structure against labor, it is just the realities of doing business.

For those supporting a minimum wage tied to cost of living, go read up on UK inflation problems of the 1970s due to demands from worker's unions.

[Cake Monster]

Whilst there is some feeling for the people loseing their work, they were only employed on a contractual basis, which means when the contract is finished, there is no obligation from the issuer of the contract to pay any form of compensation, unless there was some kind of end of contract clause to do so.

And as for higher wages, these have to be met, and paid for by increased productivity, as they are in any other organisation or business, which will probably mean less people trying to produce more, but with a higher wage.

But Hey ! TIT

[maidee]

if in all shops in thailand, they would replace the 5 to 10 useless people and only keep 2 on a double salary, you think they will finally stop chatting and doing some actual work ???

[farangmick]

It does not help either that banks in Thailand will lend huge amounts to anyone working for the government, regardless of their ability to repay. Pariyut can borrow 350,000 baht, nearly 39 times his monthly salary? I wonder if my bank manager in England (before I retired) would have lent me 1.7 million quid? Thailand getting like England 20-30 years ago when half the population had a dozen maxed out credit cards.

[BritManToo]

if in all shops in thailand, they would replace the 5 to 10 useless people and only keep 2 on a double salary, you think they will finally stop chatting and doing some actual work ???

I think they would have no staff.

Most Thais want to have fun, and if it's not fun, most of them won't turn up.

Most Thais aren't wage slaves, like all of us living in the west, no need for them to work if they don't want to.

I'm not entirely sure they have it wrong, i hated work in the UK, would much rather have lay in a hammock on the farm all day.

Edited November 25, 2014 by BritManToo