Minimum wage could be different in some parts of Thailand next year

[webfact]

Minimum wage could be different in some parts of the country next year

BANGKOK, 12 March 2015 (NNT)-The central wage committee will in 2016 set various levels of minimum wage across the nation in accordance with the local economy in the area.

According to the committee, the Labor Protection Act B.E. 2541 authorizes it to make the minimum wage different from one area to another.

The provincial sub-committee has been instructed to survey and propose the rates to the central wage committee for consideration no later than July this year.

The wage must be calculated by taking into account the cost of living, the current wage, the cost of production, the inflation rate and other social factors.

Under the Labor Protection Act, different rates can be applied to different areas, particularly in the special economic zone. Employers are also obligated to pay the daily minimum wage of no less than 300 baht per day.

In addition, the Ministry of Labor is considering the possibility of applying the floating wage system in Thailand by studying how it works in China, Malaysia, Singapore and the US, all of which are using this approach at present.


-- NNT 2015-03-12

[Thian]

Fair enough but then the salary's for Thai employee's should also depend on location.

I know that's not the case right now.

[Basil B]

Such a proposal by the Shinawatra clan would never have won them any votes.

It is actually not a bad idea.

logically you would expect higher rates in Bangkok, other cities and tourist areas, but it could also be used to reverse migration from the villages to the more prosperous areas.

[Bluespunk]

Let's hope they also impose a profit threshold on employers whereby, once beyond it, they have to start increasing workers wages incrementally above the minimum wage.

Edited March 12, 2015 by Bluespunk

[Fat Haggis]

So you're saying that a Thai employee who works for Casio for example down in Bankgok should be paid more than one in Issan?

This is almost as bad as the top women being paid less, the minimum wage must be standard across the country not regionalised, it's pretty obvious where this is going, the low paid in the poorer Issan and Deep South areas are about to be stiffed and the ones in Bangkok will be laughing if I'm reading this correctly.

It's seems another way in which to Alianate the population as opposed to bringing it closer together.

Keep the minimum wage country wide and treat all those on it as equals.

[Crazy chef 1]

imho the problem with the minimum wage is that complete unskilled worker have to get the 300thb minimum wage which is a big increase from before but skilled worker haven't got a significant increase though the salary gap between unskilled and skilled workers is minimal...

[Thian]

Well we all know that BKK, Phuket, Samui (to name a few) are much more expensive than city's in the sticks.

On top of that the traffic jam in BKK also wastes a lot of workingtime for a labourer.

[casualbiker]

All they are doing is rectifying some of the problems with the across board minimum wage. Reverting to the original formula. Because it is correct that village living is cheaper than city living. It's unfortunately also true that currently it is not a national minimum wage because some employers don't pay it!

[smedly]

a lot of national and international employers (also governments) use a system of location grading of salaries or indeed extra living allowances (which amount to the same thing) or a mixture of the two when defining compensation for employees based on location - it is and has been done all over the world for a long time and is an accepted practise

[talktomarty]

So does that mean an Issan construction worker working on a project in Bkk will be paid more than working on a similar project in Chang Mai??

This is all about putting more money in the Thai elites pockets, more profits for the big companies and driving the rural and working class back into poverty.

[CantSpell]

So in 2016, all the available Thai workforce will migrate to BKK as salaries will be higher...

Expect some unemployment stats to be issued shortly after...

[WhamBam]

The loading they have for London, as an example, seems more logical as the living costs in a major city like this are much higher. Though the downside could well be an increase in rents and general prices if people know their potential customers are earning more in the likes of Bangkok for instance.

[arthurwait]

So does this mean they are increasing the minimum wage in some places which has already led to massive inflation and job losses or are they reducing wages in some areas for people already struggling with the massive inflation and job losses ?

[casualbiker]

So in 2016, all the available Thai workforce will migrate to BKK as salaries will be higher...

Expect some unemployment stats to be issued shortly after...

People go were the work is! Prior to 2012 this formula was standard, and then the people were employed by local firms who could afford the salaries.. 2013 many businesses either closed or relocated.

[Torrens54]

All very well BUT!!!

How about productivity of the alleged "workers?"

Why should some Slack'o get the same as someone, who puts their heart into doing a great job? We've had both kinds.

Some were excellent workers, reliable, honest. Others wouldn't work in an Iron Lung, they were unreliable and would rip-you or your customer off in the blink of an eye. About the only thing they did with enthusiasm was to stick their hand-out for their salary at the end of each month.

[prakhonchai nick]

It all seems quite straightforward to me.

There is a minimum wage of 300baht/day. If you work in small towns -for example in Isaan -that is what you can expect to get if basically non skilled. If you do the same job in cities where the cost of living is appreciably higher than Isaan towns (ie Bangkok, Phuket, Pattaya Chiang Mai), then clearly you need more money just to be on an equal to those in Isaan. (Higher rent, more expensive food, transport costs etc). Either you give them a higher minmum wage, or a cost of living allowance to balance the books. Done all over the civilised world!

If employers dont pay sufficient, they will not attract the employees!

QED.

[recom273]

Hmmm .. I find living in the south more expensive than living in Bangkok.

I was used to crossing Bangkok by bus for 30b or so.. I could sit in a taxi for two hours for a 300 baht - here it costs considerably more to catch a "meter" taxi and public transport is non-existent.

Anway, the majority of companies around here didn't abide by the old ruling anyway.

[tullynagardy]

What a ridiculous idea, the junta strikes again.

Just imagine, 2 provinces side by side but one pays considerably more than the other. The migration affects will be obvious and businesses will be forced to close as workers travel to work for better pay in neighbouring areas. Parts of the country will enter a downward spiral and the social impact that comes with it.

The whole point of a minimum wage is to better the standard of living in the poorer areas of the country. £6/$10 a day is not a lot of money for a days work, there is no way this should change.

There is so much money in Thailand but the problem is 0.1% of the population have 50% of it. Changing any policy that helps share the wealth across the population is a bad idea. One that could only be dreamed up a the collection of hiso millionaires Thailand currently has as a government,

[BlackJack]

all this is great but what if you run a business, have a WP and hire the 4 thai workers to do what?

then you're hit with more salary, social, holidays etc.

NAH!

[StasD]

some farangs' companies will be relocated to Camboia or Burma or Sri Lanka again

Edited March 12, 2015 by StasD

[SOUTHERNSTAR]

Such a proposal by the Shinawatra clan would never have won them any votes.

It is actually not a bad idea.

logically you would expect higher rates in Bangkok, other cities and tourist areas, but it could also be used to reverse migration from the villages to the more prosperous areas.

Wrong they did set it at different levels and it was phased in, to the B 300/day nation wide. The article is not clear if the new minimum wage can be set under B 300/day. If so its a step backwards. If the minimum wage is still B 300/day and can be set above that, its a step forward. The problem is that in rural village people cant pay more than what is paid in BKK and thats why people are coming to the cities. The present drought, low commodity prices and no rural support mechanism will just accelerate this process. The only way to stop migration is to support the rural economy, but for that you could be send to jail.

[ColdSingha]

imho the problem with the minimum wage is that complete unskilled worker have to get the 300thb minimum wage which is a big increase from before but skilled worker haven't got a significant increase though the salary gap between unskilled and skilled workers is minimal...

our village's security guards just got replaced by a gate as unfortunately they didn't provide enough value to justify their new minimum wage (rise) for the coming year

i wonder how many times that or similar has happened up and down the country this past year

Edited March 12, 2015 by ColdSingha

[alant]

So does this mean they are increasing the minimum wage in some places which has already led to massive inflation and job losses or are they reducing wages in some areas for people already struggling with the massive inflation and job losses ?

Job losses?

Almost impossible to find people to work in many areas that I have tried.

[cookee68]

So you're saying that a Thai employee who works for Casio for example down in Bankgok should be paid more than one in Issan?

This is almost as bad as the top women being paid less, the minimum wage must be standard across the country not regionalised, it's pretty obvious where this is going, the low paid in the poorer Issan and Deep South areas are about to be stiffed and the ones in Bangkok will be laughing if I'm reading this correctly.

It's seems another way in which to Alianate the population as opposed to bringing it closer together.

Keep the minimum wage country wide and treat all those on it as equals.

It is like that in many countries,

[Yann55]

The minimum wage issue is a complicated one.

That there should be a minimum wage is obvious, as a legal base to avoid blatant exploitation. Does it eradicate exploitation ? No, because a legal base is effective only when the exploited person lodges a complaint.

Thus the minimum wage system tends to have a perverse effect as it encourages employers to hire illegal workers, when/ and wherever possible. Unfortunately, for a variety of reasons (corruption being number one of course), it is possible in many places. Hence the near-slavery situation in some sectors, which is now difficult to eradicate even with a government who earnestly wants to do it.

As for creating a different minimum wage depending upon the region, it's typically the kind of measure that looks good on paper, but 'on site' is likely to cause all kinds of headaches, abuses, and adverse side-effects.

It reminds me of an absurd joke I heard years ago : the Minister of Transport in some imaginary state where cars drive on the right hand side decides, after much consultation with lots of expensive experts, that driving on the left side would be safer. But because the experts are not in total agreement on this, he comes up with this brilliant solution : "OK guys, here's what we're going to do : for one month, as a test, cars will drive on the left hand side. If it does prove safer, then trucks will follow suit."

My point, before anyone asks, is that complicated regulations are not the answer to economic loopholes, malfunctions and malpractice. Usually they just make it worse.

Edited March 12, 2015 by Yann55

[EmptyHead]

The cost of living in Isaan is about the same as Bangkok anyway.

A few things can be cheaper sometimes, and other things more expensive, but mostly the same.

And the minimum wage still hasn't hit our area in Isaan. People are still willing to work for 150 baht a day.

Anyway, let them all go to Bangkok. It doesn't bother me really. They can enjoy the traffic jams.

[bassman]

"In addition, the Ministry of Labor is considering the possibility of applying the floating wage system in Thailand by studying how it works in China, Malaysia, Singapore and the US, all of which are using this approach at present."

I do not believe that the USA has a floating wage and not sure what the definition of this is in the article. However, the USA is a federal system and the federal government has a national minimum wage, after that it is up to the states. And in many states it is left up to city/county governments to decide if the minimum wage should be more than the national minimum. However it can not be less. With the exception of federal jobs and federal contracts.

Thailand should decentralize some of the powers to the provinces so that they can make these decisions for their people instead of dictating rates from Bangkok.

Edited March 12, 2015 by bassman

[Bruzzzz]

Let the market decide the pay. That way every boss/worker negotiates a wage the everyone is happy with. Productivity and local costs etc. all come out in the wash.

[nahkit]

All very well BUT!!!

How about productivity of the alleged "workers?"

Why should some Slack'o get the same as someone, who puts their heart into doing a great job? We've had both kinds.

Some were excellent workers, reliable, honest. Others wouldn't work in an Iron Lung, they were unreliable and would rip-you or your customer off in the blink of an eye. About the only thing they did with enthusiasm was to stick their hand-out for their salary at the end of each month.

The minimum wage is just that, the minimum you can legally pay an employee. Nobody is stopping you from paying extra to a more productive employee.

[Bruzzzz]

One you set a minimum rate market forces are no longer in control.

Somewhere down the track, minimum wages or award rates will be more than the market can bear and you have the situation most of the Western faces. It is mute to have the best industrial award rates when that particular industry has collapsed and no longer employs anybody.