Federation of industries opposes minimum wage hike

[Thaivisa News]

Bangkok – The Federation of Thai Industries has cited weak demands in domestic and international markets as reason to oppose the proposal for raising the minimum wage.

Presently the daily minimum wage is 300 baht. And the trilateral committee of government, labour and management representatives will later convene to review and adjust the wage for next year.

A labour advocacy group has called for the nationwide minimum wage at 360 baht per day.

FTI vice chairman Wallop Vittanakorn said the raise of 20 per cent, if approved, would be too high in light of economic doldrums in domestic consumption and in exports.

Wallop said the minimum wage adjustment should reflect the inflation and the cost of living in each locality rather than a blanket increase nationwide.

When the nationwide minimum wage of 300 baht was imposed, a large number of small and medium enterprises went out of business, he said.

The nationwide adjustment would tantamount to about 80 per cent increase in certain areas and local businesses could not absorb such a drastic and sudden change in production cost, he said.

He argued that the country’s minimum wage has already been high in comparison to worker’s pay in several neighbouring countries.

The high minimum wage would impact on the country’s competitiveness, he said.

Labour-intensive industries have already started to relocate to neighbouring countries, he said.

Furthermore, the government’s promotion campaign to develop special economic zones along the borders might be derailed because investors would find high wage to offset the investment promotion privileges, he said.

The Board of Investment is promoting the special economic zones in five border provinces, Tak, Mukdahan, Sa Kaeo, Trat and Songkhla.

[bangkokfrog]

The nationwide adjustment would tantamount to about 80 per cent increase in certain areas and local businesses could not absorb such a drastic and sudden change in production cost, he said.

I'm not sure that Thai industry can afford an increase to 360 baht per day and stay competitive with other A.E.C. countries... but also not sure about the maths here. Does this mean that in 'certain' areas employers are only paying 200 baht per day?

[NickJ]

It should not be the burden of industry to fit the bill.......there should be way more considerations that the govt fits the bill for...ie. health care , retirment..disability.....Industry has got to go where the market dictates.....a simple increase in wage is a populist motion.....were dealing with a huge competirive market for a daily wage here in Asia....and said to say but in time the govts of rhe west will start to realize that woek is work and it needs to either be brought home or never allowed to leave i. The first place.....there a guy with a chop stick factory in detroit........

What it boils down to is not how much disposable income the masses acrue but how the govt manages there health care and low income mortgages....

Edited April 4, 2015 by NickJ

[alfalfa19]

samesame USA.

[jerojero]

And why is this not a surprise. Business owners shareholders elite reluctant to share wealth with the working class. Glad to see Thailand same as West Countries for once. Too bad as selfish pri*cks.

[halloween]

And why is this not a surprise. Business owners shareholders elite reluctant to share wealth with the working class. Glad to see Thailand same as West Countries for once. Too bad as selfish pri*cks.

I have quite a few Thai friends running small businesses employing 1 or 2 employees. None of them could ever be described as "Business owners shareholders elite reluctant to share wealth" or "selfish pri*cks"

I did however note that after Yingluk's electoral bribe pay rise, quite a few businesses in the area reduced the number of employees, some are now working family only. Of course small family owned businesses also got an income increase, they raised prices.

This left us with 2 groups of employees, those with a pay rise eroded by inflation, and those with a pay rise eroded by inflation and no job. Let's do it again?

'

[wabothai]

a 20% payraise? never heard of such thing.

Home Pro and Watsadu will love it.

[baboon]

And why is this not a surprise. Business owners shareholders elite reluctant to share wealth with the working class. Glad to see Thailand same as West Countries for once. Too bad as selfish pri*cks.

I have quite a few Thai friends running small businesses employing 1 or 2 employees. None of them could ever be described as "Business owners shareholders elite reluctant to share wealth" or "selfish pri*cks"

I did however note that after Yingluk's electoral bribe pay rise, quite a few businesses in the area reduced the number of employees, some are now working family only. Of course small family owned businesses also got an income increase, they raised prices.

This left us with 2 groups of employees, those with a pay rise eroded by inflation, and those with a pay rise eroded by inflation and no job. Let's do it again?

'But.. But Yingluck...'

It was inevitable I suppose, but is beginning to sound hoary as time passes.

[ToddinChonburi]

So you pay someone 300 baht a day to sew 20 T shirts, I buy 4 T shirts at 299 baht each. And yes these are facts. I do not think a wage increase will hurt Thailand at all.

And for restaurants they do not even pay the Burmese under age girls the minimum wage.

[baboon]

So you pay someone 300 baht a day to sew 20 T shirts, I buy 4 T shirts at 299 baht each. And yes these are facts. I do not think a wage increase will hurt Thailand at all.

And for restaurants they do not even pay the Burmese under age girls the minimum wage.

If low wages are the key to prosperity, why isn't Bangladesh a hyperpower?

[JohnnyJazz]

A lot of local small companies relie on cheap, unqualified labour. It works because of the high tolerance of Thai people for ... how to put it in a nice way ... shit jobs. Therefore there is no incentive for more professional training and higher productivity. One of the negative consequence of higher productivity is an increase of unemployment. But unemployment rate in Thailand is around 1%. Actually a lot of companies in Bangkok relie on imported Burmese workers not because they can't afford to pay higher wages but because Thais more and more are not interested to do an increasing number of low status jobs.

This situation is not really sustainable. Everybody agree that Thailand needs a better trained, more educated workforce. For that higher minimum wage is needed, especially since there is no pressure on the unemployment rate.

Edited April 5, 2015 by JohnnyJazz

[halloween]

I have quite a few Thai friends running small businesses employing 1 or 2 employees. None of them could ever be described as "Business owners shareholders elite reluctant to share wealth" or "selfish pri*cks"

I did however note that after Yingluk's electoral bribe pay rise, quite a few businesses in the area reduced the number of employees, some are now working family only. Of course small family owned businesses also got an income increase, they raised prices.

This left us with 2 groups of employees, those with a pay rise eroded by inflation, and those with a pay rise eroded by inflation and no job. Let's do it again?

'But.. But Yingluck...'

It was inevitable I suppose, but is beginning to sound hoary as time passes.

Can you think of any other pay rise of similar proportions I could compare this proposal to? Is Yingluk some form of sacred cow whose excesses and ineptitude shouldn't be used in comparison?

BTW a very non PC pun in your post.

Edited April 5, 2015 by halloween

[baboon]

I have quite a few Thai friends running small businesses employing 1 or 2 employees. None of them could ever be described as "Business owners shareholders elite reluctant to share wealth" or "selfish pri*cks"

I did however note that after Yingluk's electoral bribe pay rise, quite a few businesses in the area reduced the number of employees, some are now working family only. Of course small family owned businesses also got an income increase, they raised prices.

This left us with 2 groups of employees, those with a pay rise eroded by inflation, and those with a pay rise eroded by inflation and no job. Let's do it again?

'But.. But Yingluck...'

It was inevitable I suppose, but is beginning to sound hoary as time passes.

Can you think of any other pay rise of similar proportions I could compare this proposal to? Is Yingluk some form of sacred cow whose excesses and ineptitude shouldn't be used in comparison?

BTW a very non PC pun in your post.

Fair comeback.

'Sacred cow' was pretty good.

[DM07]

Sooooo...in the eyes of some of you, it is totally okay, that cost of living has gone up significantly over the last decade or so...but people can still work for the same chitty salary, they always had?!

Or even better: go back to pre-YS times, with a wage of 150 THB a day?!

1) not even all the employees in Thailand get 300 THB

2) when will you ever learn, that MINIMUM WAGE and LIVING WAGE are 2 different things?! We are talking MINIMUM here...not even living!

Some businesses went bust after the last wage- hike? Well booooh effein hoooooooh!

That is capitalism for you!

But not paying people enough to make a decent living...that is called cruelty!

[Thai at Heart]

Should reflect inflation.... Well that's a start at least. This statement really is turkeys voting for Xmas.

[FangFerang]

How does a 20% increase in wages raise cost of production 80%?

[CanInBKK]

Sooooo...in the eyes of some of you, it is totally okay, that cost of living has gone up significantly over the last decade or so...but people can still work for the same chitty salary, they always had?!

Or even better: go back to pre-YS times, with a wage of 150 THB a day?!

1) not even all the employees in Thailand get 300 THB

2) when will you ever learn, that MINIMUM WAGE and LIVING WAGE are 2 different things?! We are talking MINIMUM here...not even living!

Some businesses went bust after the last wage- hike? Well booooh effein hoooooooh!

That is capitalism for you!

But not paying people enough to make a decent living...that is called cruelty!

Oddly enough you speak of minimum wage and living wage as if they were independent of each other. When "minimum wage" get increased what do you think happens? Inflation goes up by an even greater amount and thus so does "living wage". The problem doesn't lie in the actual wage because it's all relative to price of goods anyways, what really matters is willingness to achieve a higher education and thus better paying jobs.

[Prbkk]

a 20% payraise? never heard of such thing.

Home Pro and Watsadu will love it.

Homepro, Powerbuy, Central...and all the others...rely on incredibly cheap labour, to the extent that they are able to employ about 3 times the number of staff actually required to deal with customers. Big C is the worst...dozens of people standing around chatting, watching tv, working on their phones...not much interest in customers

[JohnnyJazz]

a 20% payraise? never heard of such thing.

Home Pro and Watsadu will love it.

Homepro, Powerbuy, Central...and all the others...rely on incredibly cheap labour, to the extent that they are able to employ about 3 times the number of staff actually required to deal with customers. Big C is the worst...dozens of people standing around chatting, watching tv, working on their phones...not much interest in customers

Not only these big retailer, it's the same for a lot of small and medium companies. Instead of investing on more qualified people, as labour is dirt cheap they hire more mostly incompetent people, which directly translates in poor service. Furthermore because there is no perceived value in labour, human management is very poor. The best incentive to force employers to invest more in better training and better management is to increase the cost of man power.

Edited April 5, 2015 by JohnnyJazz

[LuckyLew]

oh really, and I thought for sure they would just come out suggest a huge increase, especially since the last raise worked so well

[Basil B]

"Federation of industries opposes minimum wage hike"

They would like no rise in minimum wage.

They would wish for the minimum wage to be scrapped.

They would love for their employees to work for nothing.

[greenchair]

What do you mean they can't live off 300 per day.

It costs around 60 baht per day for 3 meals.

80 baht a day for rent.

50 baht for travel.

A grand total of 190 baht per day.

They are left with 110 baht for entertainment or saving.

Now let's compare a low income Australian on minimum wage.

Around 60 dollars per day after taxes.

25 dollars a day for 3 meals.

5 dollars transport

30 dollars rent.

Savings and entertainment ??

Thai are not able to multi task and work slowly.

300 baht a day is fair.

[sirineou]

If Thailand is to move forward, Thailand need to move from a low wage economy to a high quality economy

a low wage economy is a race to the bottom.

[phoenixdoglover]

"When the nationwide minimum wage of 300 baht was imposed, a large number of small and medium enterprises went out of business, he said."

And evidently recovered, as the unemployment rate has been reported in the range of o.5 to 1.0% the past 2 years. Or, could the reported unemployment rate be a fantasy?

"The nationwide adjustment would tantamount to about 80 per cent increase in certain areas and local businesses could not absorb such a drastic and sudden change in production cost, he said."

Er, no. A nationwide increase from 300 to 360 does not produce an "80% increase in certain areas".

"He argued that the country’s minimum wage has already been high in comparison to worker’s pay in several neighbouring countries."

And well it should be, considering the overall wage differences. Let's make the comparison of GDP per capita (PPP basis)

Thailand $9,500

Cambodia $2,400

Laos $2,800

Myanmar $1,700

At any rate, I'm so surprised the Federation of Industries would oppose a wage hike. It's not like they want to keep wages low, right?

Edited April 5, 2015 by phoenixdoglover

[Chris Lawrence]

They should have unions.

[sirineou]

They should have unions.

not even a smiley face after the above reply, I love deadpan humor

I am all with you for that. perhaps take to the streets? and maybe wear red shirts

[lostoday]

A lot of local small companies relie on cheap, unqualified labour. It works because of the high tolerance of Thai people for ... how to put it in a nice way ... shit jobs. Therefore there is no incentive for more professional training and higher productivity. One of the negative consequence of higher productivity is an increase of unemployment. But unemployment rate in Thailand is around 1%. Actually a lot of companies in Bangkok relie on imported Burmese workers not because they can't afford to pay higher wages but because Thais more and more are not interested to do an increasing number of low status jobs.

This situation is not really sustainable. Everybody agree that Thailand needs a better trained, more educated workforce. For that higher minimum wage is needed, especially since there is no pressure on the unemployment rate.

Thailand has 197 collegs. I don't know for sure but how many are there in Laos and Cambodia? 30?

Thailand produces 500,000 college grads per year; none of whom work for minimum wage.

[kurce]

Is the minimum wage per day linked to a maximum amount of hours worked per day ?

If not I can see a 20% wage increase resulting in working 20% longer to increase productivity/output to offset a rise in wage costs.

[sirineou]

Is the minimum wage per day linked to a maximum amount of hours worked per day ?

If not I can see a 20% wage increase resulting in working 20% longer to increase productivity/output to offset a rise in wage costs.

That is a very good question

The labor law in Thailand stipulate a work day to be 8 hours and no more than 40 hrs a week

http://thailawyers.com/working-hours-per-thailand-labor-law/

[JohnnyJazz]

A lot of local small companies relie on cheap, unqualified labour. It works because of the high tolerance of Thai people for ... how to put it in a nice way ... shit jobs. Therefore there is no incentive for more professional training and higher productivity. One of the negative consequence of higher productivity is an increase of unemployment. But unemployment rate in Thailand is around 1%. Actually a lot of companies in Bangkok relie on imported Burmese workers not because they can't afford to pay higher wages but because Thais more and more are not interested to do an increasing number of low status jobs.

This situation is not really sustainable. Everybody agree that Thailand needs a better trained, more educated workforce. For that higher minimum wage is needed, especially since there is no pressure on the unemployment rate.

Thailand has 197 collegs. I don't know for sure but how many are there in Laos and Cambodia? 30?

Thailand produces 500,000 college grads per year; none of whom work for minimum wage.

What is the relation between my post and yours ?

Minimum wage has never been for college graduates. What is your point ?