Wage debate ignores obscene incomes

[Lite Beer]

Wage debate ignores obscene incomes

BANGKOK: -- Why executives' pay is never an issue is a mystery

The minimum wage - the lowest payment allowed under the law to unskilled labour - is always linked with how good the economy will be doing and how "attractive" a country is to foreign investors. Whenever workers want more, there's an outcry. When the Yingluck administration sought to fulfil its election campaign pledge of a Bt300 daily minimum wage, critics rounded on it. Now, it's the interim Prayut government's turn to face the often-explosive issue.

Nobody cares how much corporate executives are paid. This is despite the fact that even a fraction of their earnings could significantly boost the income of those at the lowest end of the economy. Executives' salaries are not legally capped, and figures are often glorified and not cringed at. When the labour movement wants Bt20 more per day for the unskilled workers, it often sends economists scrambling to point out how ominous the |figure is.

The battle will be over something higher than Bt20 this time. A labour advocacy group has called for a minimum wage of Bt360 per day, a Bt60 rise. It has been a tradition for the labour movement to drive a tough bargain at the beginning, so it's safe to say that the final contentious amount should be around Bt30-Bt40. Even that would make entrepreneurs squirm. The Federation of Thai Industries has come out to baulk at the Bt60 figure, citing weak demand in domestic and international markets.

There are few national issues simpler than the minimum wage. Workers want more but their employers want to pay the least they can. The government is often caught in the middle, as supporting business leaders is always bad politics but backing the workers could be at the expense of "competitiveness" in the eyes of foreign investors. The three parties - the government,

employers and workers - are represented in the tripartite national committee that will have a final say on how much the unskilled labour should be paid.

When the Yingluck administration was pushing for a minimum wage hike, a key reason cited to defend the plan was that better-off workers could spend more and thus help boost the economy. The other side claimed a drastic rise would first lead to lay-offs, which couldn't be good for the economy. Both camps could be right. It's only that the latter rather realistically assumed that the pay hike would make the costs balloon, as there was no way those at the high end of the economy would make any sacrifice.

The supporters of the Yingluck government's plan were more idealistic. They assumed that the pay increase would not affect employment and thus it should help the economy since a better-paid workforce would mean greater spending power. But with executives unlikely to lower their pays, production costs would naturally rise and "greater spending power" would come at the expense of some job terminations and a higher cost of living.

The minimum wage, therefore, is deeply linked not only to how much workers want but also with the attitude of those at the top of the economic pyramid. It's too bad that the latter have rarely been taken into the equation. The minimum wage is often about "competitiveness" or "political games" played by labour groups whereas the bottom-line should have been the sharing of good times and bad times between workers and their employers.

As of now, "good times" and "bad times" are so different between the two groups. To one side, a "good time" could mean an extra Bt30 curry on the table whereas the "bad time" of the other side could mean renouncing a Bt8,000 wine and settling for a Bt1,500 bottle.

Source: http://www.nationmultimedia.com/opinion/Wage-debate-ignores-obscene-incomes-30257842.html

-- The Nation 2015-04-11

[ezzra]

This is not the issue of how much the Thai worker is worth, this is really about the quality work of the local labor, which is quite crappy, Thai workers in general are not productive as their counterpart in China and VN, in most cases, they're lazy, irresponsible, dishonest and all around disloyal and uninspiring people to work with, hence the law remunerations they get for their mi pen rai attitude, I ought to know, I have employed hundreds of them in my factories both in Bkk and in up country....

[jerojero]

Executive salary individually may be indeed obscene but as a portion of a company's total cost of operation, it's minute. Are executives over paid? Yes! But so are professional athletes, for example. But given that executives and similarly government officials control their own salaries, minions employees or citizens are helpless to change things.

[fatfather]

This is not the issue of how much the Thai worker is worth, this is really about the quality work of the local labor, which is quite crappy, Thai workers in general are not productive as their counterpart in China and VN, in most cases, they're lazy, irresponsible, dishonest and all around disloyal and uninspiring people to work with, hence the law remunerations they get for their mi pen rai attitude, I ought to know, I have employed hundreds of them in my factories both in Bkk and in up country....

Are you sure about this statement? I've worked with Thais as well and had the quite opposite experience. Thais are good workers and skilled craftsmen, even I have to admit that they need to be guided closely. Once the given tasks are understood and it is made clear which way it has to be done, everything goes well. My personal experience and it's not just from a one time job.

Fatfather

[NeverSure]

"Those who can do it, do. Those who can't do it either teach it, work for the government regulating it, or write opinion pieces about it for the media."

[Sealbash]

This is not the issue of how much the Thai worker is worth, this is really about the quality work of the local labor, which is quite crappy, Thai workers in general are not productive as their counterpart in China and VN, in most cases, they're lazy, irresponsible, dishonest and all around disloyal and uninspiring people to work with, hence the law remunerations they get for their mi pen rai attitude, I ought to know, I have employed hundreds of them in my factories both in Bkk and in up country....

Perhaps you get what you pay for, or your line management needs improvement. I have worked with Thais around the world. They are like everyone else. There are good, bad, and everything in between. Like any nationality, workers need to be properly motivated.

[Oziex1]

I baulk at the salaries and bonuses of the executives, however if they are skilled at steering their corporate ship in the right direction then the profits will take care of their income.

I also get some amusement over the failures, an executive runs the company into the ground the board has to get rid of him hands him a 20 mill payout, says what a top bloke he is and he will be sadly missed?

[maidee]

managers are not faithfull to the company ... when they can make more money, they just leave

they have golden contracts, illegal for normal workers

start with a big signing bonus

and a golden parachute when they leave, either by their own will, or when they are incompetent

5,10,20 million dollars bonus, for not doing their job

plus the diguesting fixed salary & a bonus equal or many times that

managers are psychopaths ... they come in with their big cat salary, have no problem getting half of the staff fired, don't care, as long as the shareholders (mostly they also got a bonus in shares) are better off

money & greed is the root of all evil

thai people already know greed... only the 1% get also the money & the power that comes with it

[Countryman]

My daughter ,4 years at Uni,can speak,read and write Thai,English and Mandarin,

graduated with 1st degree honours,offered jobs in the Hotel industry of 9K THB p.m

6 days per week,1 weeks paid holiday after 1 year,finding a job is easy,but working

for those wages!,you could make more working in 7-11,without a Uni education

relax Countryman.

[NeverSure]

My daughter ,4 years at Uni,can speak,read and write Thai,English and Mandarin,

graduated with 1st degree honours,offered jobs in the Hotel industry of 9K THB p.m

6 days per week,1 weeks paid holiday after 1 year,finding a job is easy,but working

for those wages!,you could make more working in 7-11,without a Uni education

relax Countryman.

Graduating from a university doesn't guarantee or even entitle someone to a good job. There are people with top educations in the US, the UK, Canada and Australia who can't find a good job. Universities and private industries are disconnected.

When a person or a group of people risk money in an investment including buying stock to have a business, they are entitled to the profits if there are any. If they weren't, they'd never take the risk and do the work. They surely don't owe anyone a job any more than you do.

Without a profit motive there wouldn't be all of the industry and you wouldn't have (for instance) a computer or internet access.

End of.

[bruceybonus]

My daughter ,4 years at Uni,can speak,read and write Thai,English and Mandarin,

graduated with 1st degree honours,offered jobs in the Hotel industry of 9K THB p.m

6 days per week,1 weeks paid holiday after 1 year,finding a job is easy,but working

for those wages!,you could make more working in 7-11,without a Uni education

relax Countryman.

The old adage of who you know, not what you know

[bruceybonus]

My daughter ,4 years at Uni,can speak,read and write Thai,English and Mandarin,

graduated with 1st degree honours,offered jobs in the Hotel industry of 9K THB p.m

6 days per week,1 weeks paid holiday after 1 year,finding a job is easy,but working

for those wages!,you could make more working in 7-11,without a Uni education

relax Countryman.

I thought self employed/employed tour guides did pretty well. Has that job opp been saturated now?

[chainarong]

The dye was cast decades back when the Government Administration decided to go for international companies looking for a good cheap infrastructure and low wages , to start fiddling with the structure of the wages for the peasants would spell doom, as quiet a few companies would up stakes and leave for probably Vietnam or even return home or scale back , as many companies did in China when they introduced a 25% pay rise each year for 4 years , Obscene wages for executives on the other hand are the norm in most democratic countries and causes lots of grumbles , dissatisfaction and all you will get is the finger , why shouldn't a Bank CEO get 5 million a year, after all they are experts at ripping off the public with fee's and charges, as Thailand is not a Democratic run country you have less choice, you cannot control what the share holders agree is fair payment for their executives and you cannot legislate either , that's another story.

[Godders]

"Poverty is not caused by men and women getting married; it's not caused by machinery; it's not caused by "over-production"; it's not caused by drink or laziness; and it's not caused by "over-population". It's caused by Private Monopoly. That is the present system. They have monopolized everything that it is possible to monopolize; they have got the whole earth, the minerals in the earth and the streams that water the earth. The only reason they have not monopolized the daylight and the air is that it is not possible to do it.They have monopolized everything that it is possible to monopolize; they have got the whole earth, the minerals in the earth and the streams that water the earth. The only reason they have not monopolized the daylight and the air is that it is not possible to do it."

The quotation is from Robert Tressell's superb novel, The Ragged-Trousered Philanthropists - a must read for Thai Visa posters who believe trade unions and workers are to blame for the world's economic woes, rather than greedy, monopolistic capitalism.

Written a century ago, it is, if anything, even more germane today than it was then.

[kaorop]

This is not the issue of how much the Thai worker is worth, this is really about the quality work of the local labor, which is quite crappy, Thai workers in general are not productive as their counterpart in China and VN, in most cases, they're lazy, irresponsible, dishonest and all around disloyal and uninspiring people to work with, hence the law remunerations they get for their mi pen rai attitude, I ought to know, I have employed hundreds of them in my factories both in Bkk and in up country....

Well the Japanese companies seem to be able to produce export quality products with Thai labor,

I've seen inside some of those companies and know Thais working in them also I have Thai friends who run successful quality product business, so I'm not pulling stuff from my axx.

So I have a question, what are you doing wrong?

For anyone interested in how increasing the min wage is good for the economy, have a look here

http://www.bbc.co.uk/programmes/n3csw9ml

Edited April 11, 2015 by kaorop

[Fat Haggis]

Yes, the THAI executives all deserve their salaries and bonuses don't they?

[DLock]

...and the fact that this is not just about auto makers in Thailand.

It's about the manufacture of tech products, clothing, shoes, golf bags, and a whole range of other items where a 20% increase in unskilled labour costs do hurt the bottom line.

Not all manufacturers are global companies or even big companies.

If a 20% increase in cost in not accompanied by some sort of increase in throughput or quality that translate into revenue and profit, then manufacturers do start to look elsewhere where labour is cheaper...for now.

Edited April 11, 2015 by DLock

[halloween]

What the hell! Give them their 20% pay rise and devalue the baht by the same amount. Exporting companies will be happy, and the workers until the inevitable inflation brings them right back where they started except their debts (and nearly all on minimum wage have them) will be worth less.

Yingluk kicked inflation into high gear with her vote-buying populist policy BS. Slowing it is going to be much harder.

[Thai at Heart]

I don't like any company where it's entire business model relies on it having a huge wedge of its workforce on minimum wage, yet still begs for protection from competition.

Thailand is packed with these types of companies who cannot and will not join the real world but continue to buy favour at government house because they are so large. Textiles, agribusiness and others. Pleading poverty yet profitable in billions relying on cheap labour.

The worst type of business

[Thai at Heart]

...and the fact that this is not just about auto makers in Thailand.

It's about the manufacture of tech products, clothing, shoes, golf bags, and a whole range of other items where a 20% increase in unskilled labour costs do hurt the bottom line.

Not all manufacturers are global companies or even big companies.

If a 20% increase in cost in not accompanied by some sort of increase in throughput or quality that translate into revenue and profit, then manufacturers do start to look elsewhere where labour is cheaper...for now.

Labour wage increases don't feed directly to a 20% increase in cost.

[winstonc]

seems theres a couple of 1% ers on here despising people from having the basics to survive on..shame on you people...but lets not let the truth of companies relocating for a better work force and slave wages its because of there utter greed for money thats ruining this world..you yanks keep moaning about the chinese.cheap goods.... they used to be made in the U.S.A..but more greed again at the expense of the american joe and now whose turning into the next super power. china....you deserve your decline...the collapse of capilalism bring it on..

[micmichd]

It's not a natural law that the control of high wages / profits has to be in the hands of executives who get it.

[halloween]

What was being paid in Detract was way above minimum with good benefits too.

For me, the minimum wage should rise by at least inflation every year.

Exactly that policy led me to pay 17% on my home loan not so many (25?) years ago. Remember the south Pacific peso?

[Thai at Heart]

What was being paid in Detract was way above minimum with good benefits too.

For me, the minimum wage should rise by at least inflation every year.

Exactly that policy led me to pay 17% on my home loan not so many (25?) years ago. Remember the south Pacific peso?

A minimum wage policy caused inflation to go to 17%. Yeah right.

Welcome to Fox news economics.

If minimum wages don't go up by at least inflation companies profitability rises at the expense of its labour. And u think that is a good thing. After 97, minimum wages barely rose in Thailand for 7 or 8 years.

And when finally they were increased, companies moaned and bitched. Meanwhile profitability of these firms had increased massively in a decade.

It is the fact that Thai labour has been so cheap for so long that industry in Thailand is where it is. Massively over reliant on volume of bodies.

[FangFerang]

"as there was no way those at the high end of the economy would make any sacrifice"

That says it all, all the way around the world, with NATO and their cronies singing the same song. WE WANT WAL-MART.

[FangFerang]

This is all human trafficking at its best.

I met a man named John Henry in Korea, and he graduated with a degree in economics. He told me that commodities speculation did not kill people, he said that market driven forces created bubbles and inconsistencies.

By every word that is Holy he believed his own bull crap.

Money is a cold God, maybe the coldest god.

Edited April 11, 2015 by FangFerang

[DLock]

...and the fact that this is not just about auto makers in Thailand.

It's about the manufacture of tech products, clothing, shoes, golf bags, and a whole range of other items where a 20% increase in unskilled labour costs do hurt the bottom line.

Not all manufacturers are global companies or even big companies.

If a 20% increase in cost in not accompanied by some sort of increase in throughput or quality that translate into revenue and profit, then manufacturers do start to look elsewhere where labour is cheaper...for now.

Labour wage increases don't feed directly to a 20% increase in cost.

A 20% wage increase increases wages 20% is what I meant.

I could care less.

Give them whatever they want.

We relocated 2 years ago and not only benefit from lower wages, we benefit from a workforce that actually wants to work, is much more productive and quality is higher and rejects much, much lower.

Thailand is surrounded by lower cost produces. Not a lot of bright people on here seem to understand that, and the impact of increasing wages higher...because sooner or later there are going to be fewer and fewer companies around to even provide jobs.

But let it happen. Let's see real world economics in action.

[Seastallion]

Where I come from, they say "Pay peanuts, get monkeys". It's a reason to pay your workforce well.

A government mandated minimum wage is necessary because if there was not, people would be exploited.

But when the employers start moaning, it's time to think outside the box to get a win-win.

Profit-sharing in terms of yearly bonuses could be the thing...workers have an interest in the company doing well, and employers don't have to pay anything if profitability is down.

[Thakkar]

While I support a higher minimum wage, I completely disagree with this article's premise. It expresses a muddled view. A minimum wage and a wage cap are two very different things and any linkage is tenuous. A higher wage at the bottom does not necessarily have to take anything away from the top earners. One can only come to such a conclusion by ignoring the crucial factor of productivity improvements.

It is also wrong-headed to look at the effects on individual companies rather than the entire economy.

Furthermore, the article provides no data on the effects of the previous minimum wage hike. Did it lead to wage-pulled inflation or overall increase in unemployment? Did it improve productivity, or increase investment in automation? Without data, there can be no informed debate, just mindless, disjointed prognostications, as in the article.

The curious thing is that even under conditions of virtually full employment, a substantial size of the workforce is earning just subsistence wages. When you are earning so little and another job with such wages is easily had, where's the incentive to work your best? From the employers' side, when workers can be had so cheaply, where's the incentive to invest in better training or higher automation? This squeeze from both ends explains the lack of productivity growth.

T

[metisdead]

Off topic posts about Detroit and the US Auto industry have been removed as well as the replies.