Thai workers still in heavy debt

[gandalf12]

Decent salaries and an understanding of money management will solve it. To quote a saying "Baht 100 earned, Baht 101 spent result misery. Baht 100 earned, Baht 99 spent result happiness"

[Time Traveller]

"On average, this is amounted to a debt burden of 117,839 baht per household and will require around 7,300 baht payments every month" ---

So like $3570 per household. Hardly worth worrying about.

[gandalf12]

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"On average, this is amounted to a debt burden of 117,839 baht per household and will require around 7,300 baht payments every month" ---

So like $3570 per household. Hardly worth worrying about.

For you maybe but it is massive if you are getting the salaries most of the people receive

[Bluespunk]

Decent wages might eliminate the need for or many to get into debt.

It will certainly take away the inevitability of it happening.

? like teaching an alcoholic in a liquor store...the sins of being drunk.

If someone is given nothing but alcohol to drink, then what else but an alcoholic can they become.

And who has been feeding them alcohol?

I was extending your analogy.

You compared workers in debt to alcoholics in a liquor store. {Or at least I assumed that was what you meant}

My point was that the workers would not be in debt if they were paid decent wages.

Really? And you think the stats of 89% of households with debts are all from people earning 300 baht a day?

I'm saying that there would be less debt if people were paid decent wages.

[Bluespunk]

Decent wages might eliminate the need for or many to get into debt.

It will certainly take away the inevitability of it happening.

Yeah nah.

Guy at my work earns 12k per month, he had a perfectly fine pickup that he owned.

He sold that pickup to cover the deposit of a new one, repayments are 10k per month.

The finance companies are to blame for this as they should never have approved the loan.

I work with a lot of Thais who receive a decent wage. The ones I know well live a good life within their means. Well as much as any of us do these days.

[angiolo]

"The latest survey conducted by the Thai Chamber of Commerce has revealed worrying revelations that 94% of Thai workers remain in heavy debt and of these 60% are unofficial loans."

So pay them wages above and beyond subsistence levels.

Not a solution, just more to spend

[bheard]

You could say the average young worker in Australia is heavily in debt - he's got a loan for his house which will take him 30 years to pay off.

He does have decent (legislated) wages to allow him to do it of course.

Workplace regulations and equity in Thailand have a long way to go.

[trogers]

"The latest survey conducted by the Thai Chamber of Commerce has revealed worrying revelations that 94% of Thai workers remain in heavy debt and of these 60% are unofficial loans."

So pay them wages above and beyond subsistence levels.

Not a solution, just more to spend

The fear is not in having more to spend, but more borrowings based on the higher wage. Like an alcoholic in a liquor store.

[Lekong]

They've been caught in Consumerist Circus haven't they. Phones , Tabs , Notes, Ipods all shit that they have been brainwashed into thinking they need and are foolish enough to get in debt for. I do feel sorry for them because they do not get a fair living wage in many cases

I agree! These people can afford to go out and buy a new car or Samsung phone or other gadget making sure it is top of the line and get themselves into huge debts thinking they will be able to make minimum payments until they find out they barely have enough to pay for food and rent. Responsibility for finances is the least in their thinking. I had an ex-gf who made 12000 a month and was doing OK with her finances. Then she got a bug up her butt that made her think a new car would be great. Payments were only 7000 a month. So even after she refused my advice she went and bought the car. She could not even afford gas to put in it. She sold all her gold and borrowed money just to make the down payment. Needless to say, I refused to fill her tank every 2 weeks and left her shortly afterwards. No thought for the future.. Just! I must have it now

Exactly, how can someone with a wage of 12000 baht wants to ride in a car? They get themselves indebted to the extend that they find it very difficult to feed themselves.

[trogers]

They've been caught in Consumerist Circus haven't they. Phones , Tabs , Notes, Ipods all shit that they have been brainwashed into thinking they need and are foolish enough to get in debt for. I do feel sorry for them because they do not get a fair living wage in many cases

I agree! These people can afford to go out and buy a new car or Samsung phone or other gadget making sure it is top of the line and get themselves into huge debts thinking they will be able to make minimum payments until they find out they barely have enough to pay for food and rent. Responsibility for finances is the least in their thinking. I had an ex-gf who made 12000 a month and was doing OK with her finances. Then she got a bug up her butt that made her think a new car would be great. Payments were only 7000 a month. So even after she refused my advice she went and bought the car. She could not even afford gas to put in it. She sold all her gold and borrowed money just to make the down payment. Needless to say, I refused to fill her tank every 2 weeks and left her shortly afterwards. No thought for the future.. Just! I must have it now

Exactly, how can someone with a wage of 12000 baht wants to ride in a car? They get themselves indebted to the extend that they find it very difficult to feed themselves.

Who cares if she eats only mama noodles. Those photos of her in her new car posted on her Facebook pages would fulfill her ego.

[tonbridgebrit]

Wait a minute, wait a minute.
If everybody refused to use credit, and everybody only bought stuff that they really needed, well, we might be in trouble then.
See, if everybody was sensible, then, the number of mobile phones and cars sold would plunge by a third or even half. This basically generates a sharp and painful recession. That's no good, is it ??

[trogers]

Wait a minute, wait a minute.

If everybody refused to use credit, and everybody only bought stuff that they really needed, well, we might be in trouble then.

See, if everybody was sensible, then, the number of mobile phones and cars sold would plunge by a third or even half. This basically generates a sharp and painful recession. That's no good, is it ??

Economic growth based on ballooning debt has a maturity date. Growth based on increased productivity is long term.

[ExPratt]

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Wait a minute, wait a minute.
If everybody refused to use credit, and everybody only bought stuff that they really needed, well, we might be in trouble then.
See, if everybody was sensible, then, the number of mobile phones and cars sold would plunge by a third or even half. This basically generates a sharp and painful recession. That's no good, is it ??

Problem being as we found out in 2008 is when the debt is so great it cannot be repaid

[Moonlover]

It was just a couple of days ago that a news article in TV said that there is an estimated 200k to 600k shortfall in the labor force that needs to be filled. Which means bringing in low-paid immigrants to flood the labor market and drive average wages down meet the needs of a robust economy requiring additional labor. Now let me think here: There is a labor shortfall, which means it's a worker's markets, which means wages should be going up to attract the necessary labor. Hummm.

You can apply exactly the same comment to Western Europe and the UK. Now let me think here. Why was my small town in Herefordshire flooded with Poles, Romanians, Bulgarians etc. every summer, whilst UK citizens were without well paid jobs? And the answer is the exactly the same. Hummm.

Edited May 1, 2015 by Moonlover

[Time Traveller]

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"On average, this is amounted to a debt burden of 117,839 baht per household and will require around 7,300 baht payments every month" ---

So like $3570 per household. Hardly worth worrying about.

For you maybe but it is massive if you are getting the salaries most of the people receive

please re-read the sentence. It's not most thai households, it's the "average household". Most thai households may only get 12,000 a month. But the average household income is probably closer to 30,000 baht a mnth.

While the average household debt is 118k baht, most thai households would likely have debts much less than that amount because it's the relatively few households with very high debts that make the average higher than the median level of household debt.

This is simple stats. Unfortunately, most people have no understanding of real life mathematics, it's easy for the media to make sensationalist headlines to scare people.

Edited May 1, 2015 by Time Traveller

[metisdead]

Off topic posts and replies have been removed.

[SoilSpoil]

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"On average, this is amounted to a debt burden of 117,839 baht per household and will require around 7,300 baht payments every month" ---

So like $3570 per household. Hardly worth worrying about.

For you maybe but it is massive if you are getting the salaries most of the people receive

please re-read the sentence. It's not most thai households, it's the "average household". Most thai households may only get 12,000 a month. But the average household income is probably closer to 30,000 baht a mnth.

While the average household debt is 118k baht, most thai households would likely have debts much less than that amount because it's the relatively few households with very high debts that make the average higher than the median level of household debt.

This is simple stats. Unfortunately, most people have no understanding of real life mathematics, it's easy for the media to make sensationalist headlines to scare people.

Lets do the Math, shall we,

According to the Thai government, the formal Thai household debts stands at around 85% of the GDP and is still increasing.

85% of a GDP (2013) of 387 billion dollars, equates to a household debt of $5,770 per CAPITA, or about 190,000 baht per capita.

Who or what to believe?

Edited May 1, 2015 by SoilSpoil

[hawker9000]

Nobody with little education can be blamed for not knowing or understanding the rules when borrowing money.

The loaning institutions should have the obligation to have the borrower understand the rules.

Unfortunately they care less, they make money, and make the figures look good.

The loan institutions are to be held responsible for the resulting problems Thailand is in now.

Every loan should be accompanied by a small booklet or folder explaining the rules in a simple way and not some fine print on the contract.

Ridiculous. The idea that banks & lenders are responsible for teaching the public what greed is and somehow rectifying deeply ingrained thai social cultural problems. This is precisely the kind of thing that should be taught at HOME, and then reinforced in the schools. I get at least two credit card offers (with cash borrowing limits) every week. And see easy, no-collateral loan offers on television daily. But I've known since teenagerdom about the responsibilities & dangers of borrowing, and what to do with such offers. And I definitely didn't learn it from some handbook I got from any bank!

Self-reliance and responsibility & planning for one's own future should be part of the culture. Blame the banks for predatory lending, and even for exploiting this sad aspect of Thai socialization, by not enforcing lending standards and not withholding loans from those not qualified. But it's totally unrealistic to say that thai greed and unwillingness to plan for the future and accept responsibility, are the fault of the banks. That approach might kill legitimate banking (with all the unpleasant economic consequences that'll certainly entail), but it will never solve the ubiquitous problem of irresponsibility.

It's parents that need handbooks, or maybe a kick in the a$$, on how to raise kids!!! Preferably BEFORE they have them!

[willyumiii]

The min wage is now 300 baht per day.

Most jobs require the worker to work a 12 hour day to earn that 300 baht.

That comes to 25 baht per hour.......that's about $0.70 usd. / hour

Even if the min wage were to jump to the mentioned 491 baht per day, that would only be about 40 baht per hour.

That's $1.10 usd / hour

Can anyone be expected to live on those wages?

Is is any wonder why so many go into debt, just to survive?

[Cake Monster]

The Thai Financial Institutions are mostly responsible for the amount of debt in the Country.

How is it possible to lend money to a " Noodle Shop Business " that can neither prove income, nor expenditure, or even provide some kind of plan for their business ?

Factory workers / employees of Companies can prove incomes and outgoings for loans to be either approved or rejected, but the miriad of " SME " businesses ?

[hawker9000]

The min wage is now 300 baht per day.

Most jobs require the worker to work a 12 hour day to earn that 300 baht.

That comes to 25 baht per hour.......that's about $0.70 usd. / hour

Even if the min wage were to jump to the mentioned 491 baht per day, that would only be about 40 baht per hour.

That's $1.10 usd / hour

Can anyone be expected to live on those wages?

Is is any wonder why so many go into debt, just to survive?

Some folks just LOVE to quote these minimum wage numbers, but among your script of talking-point questions, the one you're conveniently leaving off is how much it takes, for a local (not a foreigner, in the multi-tiered thai system, buying the things at inflated prices only foreigners buy), to live in Thailand. How about providing us with some numbers on that please? Then it would be just lovely to have you resume with the sermonizing.

[bruceybonus]

A lot of people over here have got champagne tastes with brown ale money. I know it happens in the west too, but an i phone in the UK/tablet is not a massive chunk out of most people's salary. Neither are the payments on a car. Quite a lot of people in Thailand have car repayments almost as much as their salary!!

[duckmandon]

We as foreigners are looked at by most Thais as being wealthy. Many of us are not, but we do know how save money & budget for things that we need (not want) to survive. I have had very well paying jobs over the years but only got ahead when I was around 45 years old. Its how you are taught by your parents, on how to make a future for yourselves. The Thais including my wife have no idea how to budget or save money. Just spend, spend, spend. Start teaching basic economics in schools & hopefully things will change for them.

[Don Mega]

The min wage is now 300 baht per day.

Most jobs require the worker to work a 12 hour day to earn that 300 baht.

That comes to 25 baht per hour.......that's about $0.70 usd. / hour

Even if the min wage were to jump to the mentioned 491 baht per day, that would only be about 40 baht per hour.

That's $1.10 usd / hour

Can anyone be expected to live on those wages?

Is is any wonder why so many go into debt, just to survive?

Thai labour Dept stipulates a working week of 48 hours with the maximum of 8 hours per day, those extra 4 hours should be paid at overtime rates.

[billd766]

The min wage is now 300 baht per day.

Most jobs require the worker to work a 12 hour day to earn that 300 baht.

That comes to 25 baht per hour.......that's about $0.70 usd. / hour

Even if the min wage were to jump to the mentioned 491 baht per day, that would only be about 40 baht per hour.

That's $1.10 usd / hour

Can anyone be expected to live on those wages?

Is is any wonder why so many go into debt, just to survive?

Thai labour Dept stipulates a working week of 48 hours with the maximum of 8 hours per day, those extra 4 hours should be paid at overtime rates.

How many Thai Labour Department officials will take a drive or ride their motorbike out to farms and small shops etc in the rural areas, firstly to check that labourers are actually getting 300 baht for an 8 hour day and secondly to confirm that the workers are getting paid overtime for the next 4 hours?

How many small shop owners are employing family and paying the full rates?

[Don Mega]

I guess the Thai labour dept will only be concerned with those working for legit businesses, for those working outside the law the conditions are up to them if they choose to work them.

[butch333]

the difference between europe usa and thailand is that the staff in europe and usa is working during the working hours don't play with their phone or internet or joke with the other staff all day they have a good output they don't eat all day but just at midday they can answer and take care when a customer have problem or need some help . it's for sure not the case here in thailand , the staff is uncompetant no have output and play all day ( mobile internet and joke with the others ) , proof is that there quite 10 times more staff here then in europe . so , for me , 300 bath or max 400 bath a day is more then enough salary for them , don't forget that they don't pay any taxes or insurance like in europe so the salary is netto . in europe , the workers are paying something like 35% taxes and 28% for the social taxe , and pay a few other taxes ( for clean the water , for the take the waste , taxe on house , taxes on the plastic bottles , on the shave knifes , on the soda , and so many others ) , the vat is min 21% ( and not 7% like here ) , and i don't speak about the price of electricity ( between6 and 10 time more expensive ) , the price of the water ( 150bath for 1000ltrs ) , people have to heat their house in the winter ( not here ) . with a salary of 1300euros , when you take out all the taxes , pay electricity water oil insurances , how much stay ? and they can do it cause they can make a budget , and look for a long term . not the thai people , when they want something they buy it , and not think about the future . life is for sure 4 time less expensive here then in europe , so a salary of 400bath a day is more then enough . do they need the last Iphone 6 or the last Ipad ??? or the new car ??? for what ??? even if they get 1000bath salary per day , everythink will be spend the 15 of the month .

[Godders]

Thais are little different from other nationalities. The whole world is in debt, not just individuals, but the vast majority of governments, too. Most of the major banks are technically insolvent and would go bankrupt without regular injections of computer-generated digital money from the Fed and the rest of the central banks which control the global money supply.

Don't expect your government to bail you out. Politicians rely on donations the big financial institutions and mega corporations to put them in power and, once elected, serve their sponsors' interests rather those of the electorate.

In effect, we are all debt slaves, living on credit at the will of the money masters who have created so much Monopoly money out of thin air that only around three per cent of the paper cash in circulation is backed by a real asset. With their help, the banks who play pass the parcel with the money they borrow at historically low interest rates, have inflated a bubble comprised of derivatives and other dodgy financial instruments estimated at a quadrillion dollars or more.

When this bursts, as it inevitably must when interest rates eventually rise, not just Thailand will go pop!

[retarius]

My brother in law has just bought a second hand pick-up....it's 7 years old and he has finance for 7 years...he scraped together the money for the 5000 baht deposit and the first month's payment and drove away in what looks like a totally clapped out relic to me; a relic that has been tarted up with a respray and new, non-matching front seats. It is 7,000 a month. He also has a motorbike....payment 2000 a month. He lives with a girlfriend and pays no rent but has to pay the electricity bill of about 1100 a month...he smokes 2 packs a day which is say 3000 a month, and half a bottle of Hong Thong each day, another 3000 a month....so expenses are about 16000 a month before putting gas in his car...he earns 300 to 400 baht a day as a motorbike taxi driver but doesn't work every day, so his earnings come to about 8-9000 a month. He came to me for financial advice (he wanted a loan to cover his car and motorbike payments). I told him about Mr McCawber in Dickens (which is how I live my life) but he didn't understand. He wound up selling his taxi permit to raise short term cash to hang onto the pick-up truck for a couple more months, but has now lost all his income. I would like to help him, but he is unhelpable.

[trogers]

My brother in law has just bought a second hand pick-up....it's 7 years old and he has finance for 7 years...he scraped together the money for the 5000 baht deposit and the first month's payment and drove away in what looks like a totally clapped out relic to me; a relic that has been tarted up with a respray and new, non-matching front seats. It is 7,000 a month. He also has a motorbike....payment 2000 a month. He lives with a girlfriend and pays no rent but has to pay the electricity bill of about 1100 a month...he smokes 2 packs a day which is say 3000 a month, and half a bottle of Hong Thong each day, another 3000 a month....so expenses are about 16000 a month before putting gas in his car...he earns 300 to 400 baht a day as a motorbike taxi driver but doesn't work every day, so his earnings come to about 8-9000 a month. He came to me for financial advice (he wanted a loan to cover his car and motorbike payments). I told him about Mr McCawber in Dickens (which is how I live my life) but he didn't understand. He wound up selling his taxi permit to raise short term cash to hang onto the pick-up truck for a couple more months, but has now lost all his income. I would like to help him, but he is unhelpable.

Offer to send him for a refresher course in grade 1 math.