Call to hike minimum wage

[webfact]

Call to hike minimum wage
PETCHANET PRATRUANGKRAI
THE NATION

Labour groups demand Bt360 a day from January 2016; poll shows sharp rise in the debt of low-income earners

BANGKOK: -- LABOUR LEADERS have demanded an increase in the country's minimum wage to Bt360 per day from the current Bt300 along with better welfare and other benefits.

Speaking yesterday at a press conference ahead of Labour Day today, Wilaiwan sae-Tea, the chairwoman of Thai Labour Solidarity Committee (TLSC), said the tripartite Labour Wage Committee expects the wage raise to be finalised in October this year so that it would be effective in January 2016, as a New Year's gift to all workers.

The TLSC will today hold its activities at Democracy Monument while a network of 14 labour unions and employee committees will hold their activities from morning to 10pm at Sanam Luang, beginning with a march from Makkhawan Rangsan bridge near Government House.

Members of TLSC and the influential State Enterprises Workers’ Relations Confederation (SERC) will converge outside Parliament building and hold joint activities at Democracy Monument, she said.

Khin Wyn Jay, a leader of Myanmar workers in Ranong, said Myanmar workers would also seek an increase in daily wage to Bt360, as the rising cost of living in Thailand was affecting all low-income earners.

A former chairwoman of the chamber of commerce in Ranong, Naruemol Khorraphoom, said the Bt60 raise should be alternatively provided to Myanmar workers, as a hike would mean less business competitiveness, which puts Thailand at a disadvantage with neighbouring countries. The Bt300 wage granted to all labourers in Ranong has forced more than 30 per cent of local businesses to shut down, she added.

Meanwhile, blue-collar workers earning monthly salaries of up to Bt15,000 or the Bt300 minimum daily wage, are the biggest group with rising debt burden, as they cannot cover the higher cost of living amid the economic slowdown, according to the University of the Thai Chamber of Commerce.

Debts at record high

The university's April business poll found that the combined low-income workers' debts hit a record high of Bt117.83 billion, surging 10.9 per cent from the year before.

The survey showed that 94 per cent of all workers are indebted, with only 6 per cent debt-free.

Higher debt among labourers is caused by the increasing cost of living and prices of consumer goods. The economic slowdown has also eroded their incomes because factories have cut down on overtime payment.

"The figure clearly indicates that low-income people are having serious cashflow problems mainly due to the fact that their incomes do not match the rising cost of living," said Thanavath Phonvichai, director of the university's Economic and Business Forecasting Centre.

The survey covers 1,197 responses nationwide from April 20-27. On Labour Day, the poll also found that despite the long weekend, workers would spend less due to their high concerns for their future income.

During the five-day holiday, spending is expected to increase only 1.7 per cent year on year to Bt1.99 billion, the slowest in seven years.

With low income, most labourers said they have to be more careful about spending money, and even have to borrow money from financial institutions and underground lenders.

Of their total debt, 40.4 per cent is owed to banks and financial institutions charging an average interest rate of 4.3 per cent, while 59.6 per cent came from illegal lenders charging 17.9 per cent a month.

"Low-income earners have turned to borrowing more from loan sharks this year because they have faced problems accessing the banking system," he said.

About 81 per cent of the respondents said they have difficulties keeping up with their loan instalments and need to delay payments by two to three months.

On average, Thai labourers need to pay Bt7,377 per month to repay their loans, which mostly cover daily expenses, other debts, house rental expense, vehicle expenses, and medical expenses.

Workers are asking for a hike in the minimum wage to as much as Bt398.89 per day, while the government is asked to help lower the cost of living, reduce unemployment and debt problems, upgrade labour skills and provide support for retirees.

In three years, workers expect that the minimum wage would reach Bt491 a day, and Bt561 a day in five years.

Source: http://www.nationmultimedia.com/national/Call-to-hike-minimum-wage-30259109.html


-- The Nation 2015-05-01

[SoilSpoil]

Of their total debt, 40.4 per cent is owed to banks and financial institutions charging an average interest rate of 4.3 per cent, while 59.6 per cent came from illegal lenders charging 17.9 per cent a month.

Shocking if these figure are accurate.

[NeverSure]

You can tell employers that if they want to hire someone they must pay X in wages and benefits.

You just can't make them hire the people. You can't make them come to Thailand or stay in Thailand and pay it.

Go ahead. Make it 3,000 baht per day and see what happens.

[SoilSpoil]

If you give people with structural debt problems 3000 baht, their debts will increase proportionally. Borrowing money, in most cases, is not about making ends meet, its about wrong priorities and unhealthy dose of PPP (piss poor planning).

[impulse]

If you give people with structural debt problems 3000 baht, their debts will increase proportionally. Borrowing money, in most cases, is not about making ends meet, its about wrong priorities and unhealthy dose of PPP (piss poor planning).

I suspect that people trying to raise a family on $10 a day would disagree.

No amount of even the greatest planning stretches $10 to feed, clothe, house, educate and keep 4 people healthy when costs are being globalized.

Sure, some folks would just piss away the extra $2, as they would piss away $20 or even $200 per day. But for many, the extra $2 would represent quite an improvement in the quality of their lives.

Edited April 30, 2015 by impulse

[SoilSpoil]

If you give people with structural debt problems 3000 baht, their debts will increase proportionally. Borrowing money, in most cases, is not about making ends meet, its about wrong priorities and unhealthy dose of PPP (piss poor planning).

I suspect that people trying to raise a family on $10 a day would disagree.

No amount of even the greatest planning stretches $10 to feed, clothe, house, educate and keep 4 people healthy when costs are being globalized.

Sure, some folks would just piss away the extra $2, as they would piss away $20 or even $200 per day. But for many, the extra $2 would represent quite an improvement in the quality of their lives.

People raising families of 4 on $10 dollar a day (do they really exist?) need social securities rather than a pay raise. Raising the minimum wages only leads to higher prices.

[Just1Voice]

Large companies who have a few thousand employees are looking at their calculators and spread sheets, and saying to themselves, "You know, we could do this much cheaper in the Philippines, or Vietnam. Ok, time to move."

[ExPratt]

Sounds very much like a "Populist Policy" to me , so that's a non starter

[trogers]

If you give people with structural debt problems 3000 baht, their debts will increase proportionally. Borrowing money, in most cases, is not about making ends meet, its about wrong priorities and unhealthy dose of PPP (piss poor planning).

I suspect that people trying to raise a family on $10 a day would disagree.

No amount of even the greatest planning stretches $10 to feed, clothe, house, educate and keep 4 people healthy when costs are being globalized.

Sure, some folks would just piss away the extra $2, as they would piss away $20 or even $200 per day. But for many, the extra $2 would represent quite an improvement in the quality of their lives.

What do the brains of people who earn only $10 a day and still procreate a family think? Ahhh...thoughts only form when they are drunk or erecting from bed in the mornings. Edited May 1, 2015 by trogers

[BSJ]

The problem is that costs will increase if their wages go up. It's pretty simple really.

If Somchai employs 200 workers for 300 baht a day which = 60.000 baht and sells product at X price and has to now pay his 200 workers 390 baht = 78.000 baht a day, so X becomes X + 30% which is passed on to everyone!

And that applies to 10's of thousands of workplaces around LOS.

All because Thai's live beyond their means.

[davehowden]

"On average, Thai labourers need to pay Bt7,377 per month to repay their loans, which mostly cover daily expenses, other debts, house rental expense, vehicle expenses, and medical expenses."

Guess the reporter forgot the SUV repayment, the iPad repayment, the TV and washing machine repayment .........

Medical expenses at 30 baht a visit should not be too onerous?

Like uneducated people all over, they live beyond their means, think only for today, and have little or no concept of budgeting. My gf will earn 500 baht in the morning and have nothing left by 16:00, "Oh I went to visit my Mum and bought her .......", well up to you darling, but don't come to me with your hand out.

[impulse]

The problem is that costs will increase if their wages go up. It's pretty simple really.

If Somchai employs 200 workers for 300 baht a day which = 60.000 baht and sells product at X price and has to now pay his 200 workers 390 baht = 78.000 baht a day, so X becomes X + 30% which is passed on to everyone!

And that applies to 10's of thousands of workplaces around LOS.

All because Thai's live beyond their means.

The best numbers I've seen indicate that corruption sucks an average of about 30-40% out of every transaction in Thailand. Maybe it's more, maybe it's less.

That is a much bigger factor in prices and competitiveness than any $2 per day increase in wages.

Perhaps the masses of workers are simply demanding that they get a bigger, fairer cut of the pie, hopefully at the expense of corrupt officials.

Your math is a little off base, since the cost of labor is actually a small portion of the total cost of most products. For example, doubling the cost of labor on an IPhone would only add a few percent to the cost of the phone. The rest of what we pay for that IPhone is why Apple is so cash rich.

[Thaddeus]

Not one single lesson has been learned has it.

[trogers]

The problem is that costs will increase if their wages go up. It's pretty simple really.

If Somchai employs 200 workers for 300 baht a day which = 60.000 baht and sells product at X price and has to now pay his 200 workers 390 baht = 78.000 baht a day, so X becomes X + 30% which is passed on to everyone!

And that applies to 10's of thousands of workplaces around LOS.

All because Thai's live beyond their means.

The best numbers I've seen indicate that corruption sucks an average of about 30-40% out of every transaction in Thailand. Maybe it's more, maybe it's less.

That is a much bigger factor in prices and competitiveness than any $2 per day increase in wages.

Perhaps the masses of workers are simply demanding that they get a bigger, fairer cut of the pie, hopefully at the expense of corrupt officials.

Your math is a little off base, since the cost of labor is actually a small portion of the total cost of most products. For example, doubling the cost of labor on an IPhone would only add a few percent to the cost of the phone. The rest of what we pay for that IPhone is why Apple is so cash rich.

Then, buy a Xinhua instead of an IPhone.

[konying]

1. So to solve debt, their idea is to pay more? instead of teaching to live within means or how to plan the money?

2. More benefits such as? How about some benefits for the businesses? Say employees actually working instead of playing on the phones or sleeping

3. What happened with the last wage hike? price hike

4. Since last wage hike, number of people in debt increased dramatically, why? because after being paid more, they spend more

5. Being an export country, what would happen to the prices? Price Increase, what would happen with the buyers? Go shopping elsewhere.

6. What skills minimum wage workers poses? answer is hardly any.It requires 5 people to do the job of one.

People who stay working with the same company for longer than 1 year and are useful do not get minimum wage and usually have pay rises every year, plus bonuses.

[zaphod reborn]

It would be good if minimum wage could rise to 320 or 330 baht/day. Unfortunately, looking at the export figures, a minimum wage increase just isn't in the cards right now. The rise to 300 was a big hit to foreign investment, and another minimum wage increase would send more companies packing to Indonesia, Vietnam and the PI.

[impulse]

It would be good if minimum wage could rise to 320 or 330 baht/day. Unfortunately, looking at the export figures, a minimum wage increase just isn't in the cards right now. The rise to 300 was a big hit to foreign investment, and another minimum wage increase would send more companies packing to Indonesia, Vietnam and the PI.

You make a good argument, and I'd agree with one exception.

The last wage hike happened around the same time as a switch from civil law to martial law (okay, not that simple, but you get the point), and I suspect that was a bigger factor in any reduction in foreign investment than the minimum wage increase.

Tough to evaluate long term investment in a country when you don't know whether it's going to be another Rhodesia or another Singapore...or where it will fall on the continuum.

[steve654]

I sincerely feel sorry for the Thai people, especially anyone working for 300 baht/day. Prices everywhere are going up, especially food, so I just don't know how they survive. Here in Canada, one could say the minimum wage is very good compared to Thailand, but if you don't own your own house or condo fully, rent and heat costs alone could almost take away all your months wages. Many people here are in the same situation in that they owe a lot of money to the banks. On top of that Winters are very long and there is no beach or sunshine to cheer you up.

[toybits]

IPhone, cosmetic braces, breast implants, nose lift, new car and motorbike for the wife and kid, second family, lots of expenses... Really!!

[konying]

I sincerely feel sorry for the Thai people, especially anyone working for 300 baht/day. Prices everywhere are going up, especially food, so I just don't know how they survive. Here in Canada, one could say the minimum wage is very good compared to Thailand, but if you don't own your own house or condo fully, rent and heat costs alone could almost take away all your months wages. Many people here are in the same situation in that they owe a lot of money to the banks. On top of that Winters are very long and there is no beach or sunshine to cheer you up.

Thai minimum wage workers are no different to other countries minimum wage workers.

The only difference is a large number of minimum wage workers in other countries take a second job to earn more, while in Thailand, its hard to get them to do OT let alone work on day off with extra pay.

[givenall]

Enough is enough. As a small business owner, this mean to close shop as many other would have too

The thais love to spend so they should take responsibility for their actions instead of wanting more and more hand outs every time they get into trouble

[SoilSpoil]

The problem is that costs will increase if their wages go up. It's pretty simple really.

If Somchai employs 200 workers for 300 baht a day which = 60.000 baht and sells product at X price and has to now pay his 200 workers 390 baht = 78.000 baht a day, so X becomes X + 30% which is passed on to everyone!

And that applies to 10's of thousands of workplaces around LOS.

All because Thai's live beyond their means.

The best numbers I've seen indicate that corruption sucks an average of about 30-40% out of every transaction in Thailand. Maybe it's more, maybe it's less.

That is a much bigger factor in prices and competitiveness than any $2 per day increase in wages.

Perhaps the masses of workers are simply demanding that they get a bigger, fairer cut of the pie, hopefully at the expense of corrupt officials.

Your math is a little off base, since the cost of labor is actually a small portion of the total cost of most products. For example, doubling the cost of labor on an IPhone would only add a few percent to the cost of the phone. The rest of what we pay for that IPhone is why Apple is so cash rich.

You're right, but the Apple's of the world and their shareholders want to stay rich, so 1% increase in production costs means a 1% higher sales price.

That house in the Hamptons needs to come from somewhere.

[Balance]

If you give people with structural debt problems 3000 baht, their debts will increase proportionally. Borrowing money, in most cases, is not about making ends meet, its about wrong priorities and unhealthy dose of PPP (piss poor planning).

I suspect that people trying to raise a family on $10 a day would disagree.

No amount of even the greatest planning stretches $10 to feed, clothe, house, educate and keep 4 people healthy when costs are being globalized.

Sure, some folks would just piss away the extra $2, as they would piss away $20 or even $200 per day. But for many, the extra $2 would represent quite an improvement in the quality of their lives.

People raising families of 4 on $10 dollar a day (do they really exist?) need social securities rather than a pay raise. Raising the minimum wages only leads to higher prices.

To your question, yes they do exist and there are a lot of them. Traditional economics would argue that raising wages in a recession (don't know how this is defined in Thailand) is not a good idea. Wages generally rise when there are more jobs than workers.

In agreement, what is needed is much more of a government funded safety net so that people do not pay for economic cycles or misguided economic polices. What is going to back stop the thousands of workers that will be directly and indirectly effected by the EU red card on imports? How will this be paid for? My opinion is that the top 2% of the population that has benefited the most during the last 10 years and most likely pay the smallest percentage of taxes should pay the largest share. There is no free lunch, even for the elites.

[Valentine]

Some pretty cynical comments here. Any wage increases are simply passed on to the consumer much like the famous rice subsidy whereby costs of fertilizer, land rents & so forth were increased. In reality with the present system & mindset it seems an increase will not really benefit. If corruption is eradicated (will never happen) or simply reduced then that alone will make the cost of goods much lower. Take out the host of middlemen who add large profits to their cost. Make companies fully justify any price increase before it is allowed to be passed on. Change the taxation on goods. IN New Zealand when they first brought in GST (goods & services tax) many items actually reduced in price as they eliminated all the hidden taxes at the same time.

A change in the system & the mindset is what is truly needed. Based on current household commodity prices it is understandable why a wage increase is being called for.

[Chupup]

Thailand's rice farmers are getting squeezed already, cost of production is up, price for sale of rice low all a wage hike will do is put laborers out of work as farmers turn to machines to do the job cheaper/ bigger investment firms move to other countries

but carry on, you reap what you sow, exports are already suffering a wage hike can only make things worse

[Bcgardener]

When I look at my Thai staff , all of whom earn way more than the minimum wage, they are all in financial difficulty due to loans and debts. On average we get one or two demands for payment notices sent to our company address but with a staff members name at the top every Month (I guess they get the address through Social Security or some other Government source).

In pretty much all these cases the loans are for "discretionary spending" items. My assistant bought a new motor scooter about 18 Months ago on time payment and it was probably within her budget to pay it back. However about 6 Months ago decided that she needed a car with payments of 8,500 Baht per Month when her Monthly salary is about 14,000 Baht per Month. One of the factory workers who is on about 13,500 Baht per Month just bought a second hand Yaris for about 285,000 Baht with no deposit down and repayments over 72 Months. I pointed out that the final cost of this "cheap car" was going to be over 680,000 Baht but that didn't register.

I think fiscal education is a far more important prority before considering increases in the minimum wage. As an earlier poster said, any worker that stays with a company for more than a year os so is unlikely to be on minimum wage and will probably receive annual bonuses. This includes the auto workers , an industry where minimum wage may be paid but their annual bonus can sometimes be 6 Months wages.

[SoilSpoil]

Thailand's rice farmers are getting squeezed already, cost of production is up, price for sale of rice low all a wage hike will do is put laborers out of work as farmers turn to machines to do the job cheaper/ bigger investment firms move to other countries

but carry on, you reap what you sow, exports are already suffering a wage hike can only make things worse

We grow, modestly, organic rice (riceberry) and workers to help out occasionally cost 500 baht a day if they care to show up. For us thats alright as riceberry is still a premium product.

[Praematura]

I'm all for being able to make a living wage but now is not the time with zero growth, declining exports, etc. if there is a labor shortage as another article referenced then the market should make the requisite correction.

What is needed is an easy way to do the equivalent of a chapter 7 bankruptcy. Banks would write off these uncollected debts as a tax deduction. As part of the process participants would go through financial counseling.

Unless household debt is addressed I don't see where future growth is coming in the short term. I think FDI is roughly half of YTD 2013.

[dageurreotype]

Does this minimum wage apply to non-Thai workers? Major stores on Phuket are being stuffed with Burmese and Khmer now, so I'm guessing Thailand is now taking a leaf out of the UK's book and encouraging immigrants from poorer countries in order to maintain their obscene profit margins, thus depressing the already piss poor daily wage. Way to go Siam.

[Srikcir]

The Thai economy is collapsing in part due to the prolonged elected government disruption, military coup, and Junta mismanagement that has cost the nation almost 10% GDP growth to date. Now the nation is entering deflation and devaluation of the baht. Calling for a minimum wage hike is not the solution but will only further damage the economy.

It would better serve the labor leaders to protest the Junta to move more quickly to disinvesting itself of rule government, reactivate the 2007 constitution, elect a new government, and normalize the economy.