Labor network calls for wage hike to 360 baht

[webfact]

Labor network calls for wage hike to 360 baht

BANGKOK, 9 June 2015 (NNT) – The Thai Labor Solidarity Committee (TLSC) is planning to request the Ministry of Labor to consider raising the daily minimum wage to 360 baht.

Following the Prime Minister’s comment in support of the maintenance of the 300-baht minimum wage on fear that any hike would affect the country’s economy and investment, President of the TLSC Wilaiwan Saetia expressed her disagreement, reiterating that a wage increase is necessary. She claimed that the Central Wage Committee’s resolution on the wage rise to 300 baht has been effective since 2013 and is expiring this year, prompting the need for an adjustment for the year 2016.

In addition, since the government is set to push up the monthly salaries of civil servants and state enterprise workers soon, Ms Wilaiwan pointed out that a higher wage rate should be given to laborers as well.

As she estimated the appropriate rate at 360 baht per day, the President called on the government and the Central Wage Committee to allow the TLSC to clarify its reasoning behind the increase. She said a meeting should also be held for the government, employers and employees to discuss and settle the matter for the benefit of all sides.

Ms Wilaiwan revealed that her committee and supporters will travel to meet with the Minister of Labor and the Permanent Secretary for Labor within this month in a bid to propose the 360-baht minimum wage.


-- NNT 2015-06-09

[seajae]

a 20% increase, will they work 20% harder, I doubt it, actually working harder to earn more money is not what these workers want, they would rather an increase for less work.It is cheap labour but then so is everything else in this country, higher wages mean more increases in living costs but they probably dont realize that

[smutcakes]

a 20% increase, will they work 20% harder, I doubt it, actually working harder to earn more money is not what these workers want, they would rather an increase for less work.It is cheap labour but then so is everything else in this country, higher wages mean more increases in living costs but they probably dont realize that

A simple look at some of the largest employers in the country who frequent the forbes rich list suggests there is plenty of scope for increasing wages without disastrously affecting the lives of the bosses.

Cheap labour is cheap labour, many are uneducated, often through no fault of their own, and many do not have the nous or education to even think about self improvement.

Day to day living is still cheap here, or possible to be cheap. The only thing that grates me are the rental and condo costs, which with some of the new developments are bordering on Chelsea & central Sydney levels at 500K per sqm. which are crazy, but i have no illusion they will be snapped up by Thai's who have money to burn.

I am not really disagreeing with your post if it sounds like it, but something has to be done about developing the living and life standards of the lower rungs of society, but to be honest every which way you twist it there will be negatives associated with it. How to increase productivity of the work force who are uneducated? how to make them see this? It is a very difficult conundrum and not one unique to Thailand.

[seajae]

the money the bosses get is disgusting, the thing is though is wages go up so does the cost of what they make, this country needs to use productivity properly and also to regulate the amount of profit the scum bosses take out of the business, a much bigger tax on profit would be ideal

[Happy Grumpy]

they would rather an increase for less work.

Would mind that, myself.

[elgordo38]

a 20% increase, will they work 20% harder, I doubt it, actually working harder to earn more money is not what these workers want, they would rather an increase for less work.It is cheap labour but then so is everything else in this country, higher wages mean more increases in living costs but they probably dont realize that

Any raise the poor get goes back into the economy immediately. All the money the rich get is stashed away and added to over time. Dead money. Yes I know the rich provide jobs but only at the cheapest rate possible so they can what? Stash away more money.

[Srikcir]

How can reformists be in favor of an increase in the minimum wage? It's obviously a populist strategy to buy support for Prayut's continued leadership of the nation. That's why he almost immediately raised civil service wages after taking power to secure loyalty of government workers - with money.

The Prayut regime operates no differently than previous regimes. He makes promises for better lives. He creates subsidies and gives cash grants to increase worker wealth. He pays higher than market prices for crops to gain farmer loyalty.

It's almost like he is running for an elected office.

[Thai at Heart]

Why they don't mandate that the rate must rise by at least inflation as a start, god knows. Any further increases can be factored in on and above that, but it should not be the case that the rate stays fixed for years on end only to be bumped as a shock to the market. Hell 3% is 9 baht a day, but if it had been 3% a year for 3 years it would be 340 baht or so by now anyway.

[djjamie]

Imagine how "Home Pro" must feel about this proposed wage hike.

I walk into their Khon Kaen store there are about 15 staff talking to each other and no one noticing me at all. I walk up to the shower water heaters and ask them which one they would recommend. They take me over to an obscure unknown brand that is on sale and I notice "sale" signs for this product all over the place. I ask why they recommend this particular heater and they say "It gets the water very hot". I ask my wife to explain that the Toshiba system has a more efficient heat transfer thus resulting in reduced running costs..Blank look on the face of the salesman. He is not worth 360 baht a day.

Besides that, if the minimum wage was set at 360 baht Home Pro would reduce its amount of workers by 20% to continue to run the same profits. They would have 20% less incompetent people, BUT still have the remaining 80% incompetent people.

If the minimum wage was aligned to market forces and economic conditions as Prayut had recommended then Home Pro may well still pay bare minimum, but they would be out competed by their competitor that payed minimum wage, but gave pay rises to competent staff. More competent staff means the need to employe less people. (It seems that is how Thai's see it)

If I was on 200 baht a day I would learn and strive to improve so I could be on 360 baht a day. I would learn about heat transfer, heater brands, wattage used, running costs and I would make sure that the customer got my full support and the best advice I could give. If I did not get a pay rise from Home Pro I would go to Home Hub to have my skills recognised financially. I would then be promoted and be on more money.

I am all for a minimum wage, BUT one that is aligned with market forces and economic conditions. Not a pie in the sky figure that will create unemployment, stifle employee ambition and drive and most importantly send me home with a Ukrainian water heater that costs 400 baht an hour to run (which is higher than minimum wage and works harder than the guy that sold it to me!)

Market forces for minimum wage. Market forces cannot be beat no matter how much governments try to manipulate it. Look at the rice scam as an example of manipulation of market forces.

Some people truly never ever learn.

Edited June 9, 2015 by djjamie

[tbthailand]

what is remarkable on these minimum wage discussions - not just on this forum but every where - is how few people there are who understand what the minimum wage is about and why it exists.

[Nick167]

Time for more SMEs to move to Cambodia, Vietnam and Myanmar....labour is cheaper there plus more productive and less complaining and laziness. At least the unemployed thais can be supported by these unions in the future hopefully.

[Kalbo]

Imagine how "Home Pro" must feel about this proposed wage hike.

I walk into their Khon Kaen store there are about 15 staff talking to each other and no one noticing me at all. I walk up to the shower water heaters and ask them which one they would recommend. They take me over to an obscure unknown brand that is on sale and I notice "sale" signs for this product all over the place. I ask why they recommend this particular heater and they say "It gets the water very hot". I ask my wife to explain that the Toshiba system has a more efficient heat transfer thus resulting in reduced running costs..Blank look on the face of the salesman. He is not worth 360 baht a day.

Besides that, if the minimum wage was set at 360 baht Home Pro would reduce its amount of workers by 20% to continue to run the same profits. They would have 20% less incompetent people, BUT still have the remaining 80% incompetent people.

If the minimum wage was aligned to market forces and economic conditions as Prayut had recommended then Home Pro may well still pay bare minimum, but they would be out competed by their competitor that payed minimum wage, but gave pay rises to competent staff. More competent staff means the need to employe less people. (It seems that is how Thai's see it)

If I was on 200 baht a day I would learn and strive to improve so I could be on 360 baht a day. I would learn about heat transfer, heater brands, wattage used, running costs and I would make sure that the customer got my full support and the best advice I could give. If I did not get a pay rise from Home Pro I would go to Home Hub to have my skills recognised financially. I would then be promoted and be on more money.

I am all for a minimum wage, BUT one that is aligned with market forces and economic conditions. Not a pie in the sky figure that will create unemployment, stifle employee ambition and drive and most importantly send me home with a Ukrainian water heater that costs 400 baht an hour to run (which is higher than minimum wage and works harder than the guy that sold it to me!)

Market forces for minimum wage. Market forces cannot be beat no matter how much governments try to manipulate it. Look at the rice scam as an example of manipulation of market forces.

Some people truly never ever learn.

You hit the proverbial nail on the head. Nice piece of writing.

[gandalf12]

Pay an hourly rate, verified by results of course

Edited June 10, 2015 by gandalf12

[gandalf12]

Time for more SMEs to move to Cambodia, Vietnam and Myanmar....labour is cheaper there plus more productive and less complaining and laziness. At least the unemployed thais can be supported by these unions in the future hopefully.

I found the people in Vietnam very hard working. Cant say about Cambodia or Myanmar as I have not worked there

[Thai at Heart]

Imagine how "Home Pro" must feel about this proposed wage hike.

I walk into their Khon Kaen store there are about 15 staff talking to each other and no one noticing me at all. I walk up to the shower water heaters and ask them which one they would recommend. They take me over to an obscure unknown brand that is on sale and I notice "sale" signs for this product all over the place. I ask why they recommend this particular heater and they say "It gets the water very hot". I ask my wife to explain that the Toshiba system has a more efficient heat transfer thus resulting in reduced running costs..Blank look on the face of the salesman. He is not worth 360 baht a day.

Besides that, if the minimum wage was set at 360 baht Home Pro would reduce its amount of workers by 20% to continue to run the same profits. They would have 20% less incompetent people, BUT still have the remaining 80% incompetent people.

If the minimum wage was aligned to market forces and economic conditions as Prayut had recommended then Home Pro may well still pay bare minimum, but they would be out competed by their competitor that payed minimum wage, but gave pay rises to competent staff. More competent staff means the need to employe less people. (It seems that is how Thai's see it)

If I was on 200 baht a day I would learn and strive to improve so I could be on 360 baht a day. I would learn about heat transfer, heater brands, wattage used, running costs and I would make sure that the customer got my full support and the best advice I could give. If I did not get a pay rise from Home Pro I would go to Home Hub to have my skills recognised financially. I would then be promoted and be on more money.

I am all for a minimum wage, BUT one that is aligned with market forces and economic conditions. Not a pie in the sky figure that will create unemployment, stifle employee ambition and drive and most importantly send me home with a Ukrainian water heater that costs 400 baht an hour to run (which is higher than minimum wage and works harder than the guy that sold it to me!)

Market forces for minimum wage. Market forces cannot be beat no matter how much governments try to manipulate it. Look at the rice scam as an example of manipulation of market forces.

Some people truly never ever learn.

The people on the shop floor don't work for homepro and are on commission. Hence why they can never answer the question, "which is the best water heater" because they are representing their brand, not homepro.......

Funny how this endless talk about minimum wages causing unemployment persists. This is not cast in stone at all.

http://www.huffingtonpost.com/aaron-pacitti/raising-the-minimum-wage-_3_b_7152976.html

When the minimum wage rises, it is usually phased in over time, giving firms time to adjust. As wages rise, firms become more productive and efficient because higher wages reduce turnover, absenteeism, and hiring and training costs. Each time a worker quits a fast-food job, where turnover rates are exceptionally high, it costs the employer $4,700 to replace them. Using the low estimate of a living wage, raising the minimum wage to $15 would save firms a total of $2.1 billion, allowing them to avoid layoffs and afford the higher costs.

Another reason higher minimum wages do not lead to increased unemployment is that firms can compensate for the higher labor costs by raising prices. A $15 minimum wage would cause firms who employ low-wage workers to raise prices by only three percent.

Instead of turning to layoffs, firms could also accept slightly lower profits in the short term and, instead of engaging in stock buybacks which enrich stockholders, share with their workforce in the fruits of this growth. But, over the longer term, as incomes rise, consumption will increase leading, ultimately, to higher profits.

As businesses experience greater demand and sales, they are likely to hire moreworkers over time. This would serve as a stimulus that could help workers, firms, and the economy as a whole.

Small firms would face a special set of challenges since they operate with thinner profit margins. With the additional tax revenue generated by higher incomes and increased growth, coupled with reduced spending on income support programs for low-wage workers, small businesses could be given tax credits to offset the cost of a higher minimum wage, enabling them to avoid layoffs.

By failing to ensure the minimum wage keeps pace with the cost of living and worker productivity, policymakers have created a situation where full-time workers earning the minimum wage have to rely on public assistance to make ends meet.

http://en.wikipedia.org/wiki/Minimum_wage

Empirical studies[edit]

Estimated minimum wage effects on employment from a meta-study of 64 other studies showed insignificant employment effect (both practically and statistically) from minimum-wage raises. The most precise estimates were heavily clustered at or near zero employment effects (elasticity = 0).^[56]

Economists disagree as to the measurable impact of minimum wages in the 'real world'. This disagreement usually takes the form of competing empirical tests of the elasticities of supply and demand in labor markets and the degree to which markets differ from the efficiency that models of perfect competition predict.

Economists have done empirical studies on different aspects of the minimum wage, including:^[10]

• Employment effects, the most frequently studied aspect
• Effects on the distribution of wages and earnings among low-paid and higher-paid workers
• Effects on the distribution of incomes among low-income and higher-income families
• Effects on the skills of workers through job training and the deferring of work to acquire education
• Effects on prices and profits
• Effects on on-the-job training

Until the mid-1990s, a general consensus existed among economists, both conservative and liberal, that the minimum wage reduced employment, especially among younger and low-skill workers.^[36] In addition to the basic supply-demand intuition, there were a number of empirical studies that supported this view. For example, Gramlich (1976) found that many of the benefits went to higher income families, and in particular that teenagers were made worse off by the unemployment associated with the minimum wage.^[57]

Brown et al. (1983) noted that time series studies to that point had found that for a 10 percent increase in the minimum wage, there was a decrease in teenage employment of 1–3 percent. However, the studies found wider variation, from 0 to over 3 percent, in their estimates for the effect on teenage unemployment (teenagers without a job and looking for one). In contrast to the simple supply and demand diagram, it was commonly found that teenagers withdrew from the labor force in response to the minimum wage, which produced the possibility of equal reductions in the supply as well as the demand for labor at a higher minimum wage and hence no impact on the unemployment rate. Using a variety of specifications of the employment and unemployment equations (using ordinary least squares vs. generalized least squares regression procedures, and linear vs. logarithmic specifications), they found that a 10 percent increase in the minimum wage caused a 1 percent decrease in teenage employment, and no change in the teenage unemployment rate. The study also found a small, but statistically significant, increase in unemployment for adults aged 20–24.^[58]

CBO table illustrating projections of the effects of minimum wage increases on employment and income, under two scenarios

Wellington (1991) updated Brown et al.'s research with data through 1986 to provide new estimates encompassing a period when the real (i.e., inflation-adjusted) value of the minimum wage was declining, because it had not increased since 1981. She found that a 10% increase in the minimum wage decreased the absolute teenage employment by 0.6%, with no effect on the teen or young adult unemployment rates.^[59]

Some research suggests that the unemployment effects of small minimum wage increases are dominated by other factors.^[60] In Florida, where voters approved an increase in 2004, a follow-up comprehensive study after the increase confirmed a strong economy with increased employment above previous years in Florida and better than in the U.S. as a whole.^[61] When it comes to on-the-job training, some believe the increase in wages is taken out of training expenses. A 2001 empirical study found that there is "no evidence that minimum wages reduce training, and little evidence that they tend to increase training."^[62]

Some empirical studies have tried to ascertain the benefits of a minimum wage beyond employment effects. In an analysis of Census data, Joseph Sabia and Robert Nielson found no statistically significant evidence that minimum wage increases helped reduce financial, housing, health, or food insecurity.^[63] This study was undertaken by the Employment Policies Institute, a think tank funded by the food, beverage and hospitality industries. In 2012, Michael Reich published an economic analysis that suggested that a proposed minimum wage hike in San Diego might stimulate the city's economy by about $190 million.^[64]

The Economist wrote in December 2013: "A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs....America's federal minimum wage, at 38% of median income, is one of the rich world's lowest. Some studies find no harm to employment from federal or state minimum wages, others see a small one, but none finds any serious damage. ... High minimum wages, however, particularly in rigid labour markets, do appear to hit employment. France has the rich world’s highest wage floor, at more than 60% of the median for adults and a far bigger fraction of the typical wage for the young. This helps explain why France also has shockingly high rates of youth unemployment: 26% for 15- to 24-year-olds."^[65]

Card and Krueger[edit]

In 1992, the minimum wage in New Jersey increased from $4.25 to $5.05 per hour (an 18.8% increase) while the adjacent state of Pennsylvania remained at $4.25. David Cardand Alan Krueger gathered information on fast food restaurants in New Jersey and eastern Pennsylvania in an attempt to see what effect this increase had on employment within New Jersey. Basic economic theory would have implied that relative employment should have decreased in New Jersey. Card and Krueger surveyed employers before the April 1992 New Jersey increase, and again in November–December 1992, asking managers for data on the full-time equivalent staff level of their restaurants both times.^[66] Based on data from the employers' responses, the authors concluded that the increase in the minimum wage slightly increased employment in the New Jersey restaurants.^[66]

One possible explanation for why the current minimum wage laws may not affect unemployment in the United States is that the minimum wage is set close to the equilibrium point for low and unskilled workers. Thus, according to this explanation, in the absence of the minimum wage law unskilled workers would be paid approximately the same amount and an increase above this equilibrium point could likely bring about increased unemployment for the low and unskilled workers.^[42]

Card and Krueger expanded on this initial article in their 1995 book Myth and Measurement: The New Economics of the Minimum Wage.^[67] They argued that the negative employment effects of minimum wage laws are minimal if not non-existent. For example, they look at the 1992 increase in New Jersey's minimum wage, the 1988 rise in California's minimum wage, and the 1990–91 increases in the federal minimum wage. In addition to their own findings, they reanalyzed earlier studies with updated data, generally finding that the older results of a negative employment effect did not hold up in the larger datasets.^[68]

Research subsequent to Card and Krueger's work[edit]

A 2010 study published in theReview of Economics and Statisticscompared 288 pairs of contiguous U.S. counties with minimum wage differentials from 1990 to 2006 and found no adverse employment effects from a minimum wage increase. Contiguous counties with different minimum wages are in purple. All other counties are in white.^[69]

In subsequent research, David Neumark and William Wascher attempted to verify Card and Krueger's results by using administrativepayroll records from a sample of large fast food restaurant chains in order to verify employment. They found that the minimum wage increases were followed by decreases in employment. On the other hand, an assessment of data collected and analyzed by Neumark and Wascher did not initially contradict the Card and Krueger results,^[70] but in a later edited version they found a four percent decrease in employment, and reported that "the estimated disemployment effects in the payroll data are often statistically significant at the 5- or 10- percent level although there are some estimators and subsamples that yield insignificant—although almost always negative" employment effects.^[71][72] However, this paper's conclusions were rebutted in a 2000 paper by Card and Krueger.^[73] A 2011 paper has reconciled the difference between Card and Krueger's survey data and Neumark and Wascher's payroll-based data. The paper shows that both datasets evidence conditional employment effects that are positive for small restaurants, but are negative for large fast-food restaurants.^[74]

In 1996 and 1997, the federal minimum wage was increased from $4.25 to $5.15, thereby increasing the minimum wage by $0.90 in Pennsylvania but by just $0.10 in New Jersey; this allowed for an examination of the effects of minimum wage increases in the same area, subsequent to the 1992 change studied by Card and Krueger. A study by Hoffman and Trace found the result anticipated by traditional theory: a detrimental effect on employment.^[75]

Further application of the methodology used by Card and Krueger by other researchers yielded results similar to their original findings, across additional data sets.^[76] A 2010 study by three economists (Arindrajit Dube of the University of Massachusetts Amherst, T. William Lester of the University of North Carolina at Chapel Hill, and Michael Reich of the University of California, Berkeley), compared adjacent counties in different states where the minimum wage had been raised in one of the states. They analyzed employment trends for several categories of low-wage workers from 1990 to 2006 and found that increases in minimum wages had no negative effects on low-wage employment and successfully increased the income of workers in food services and retail employment, as well as the narrower category of workers in restaurants.^[76][77]

However, a 2011 study by Baskaya and Rubinstein of Brown University found that at the federal level, "a rise in minimum wage have [sic] an instantaneous impact on wage rates and a corresponding negative impact on employment", stating, "Minimum wage increases boost teenage wage rates and reduce teenage employment."^[78] Another 2011 study by Sen, Rybczynski, and Van De Waal found that "a 10% increase in the minimum wage is significantly correlated with a 3−5% drop in teen employment."^[79] A 2012 study by Sabia, Hansen, and Burkhauser found that "minimum wage increases can have substantial adverse labor demand effects for low-skilled individuals", with the largest effects on those aged 16 to 24.^[80]

A 2013 study by Meer and West concluded that "the minimum wage reduces net job growth, primarily through its effect on job creation by expanding establishments ... most pronounced for younger workers and in industries with a higher proportion of low-wage workers."^[81] This study by Meer and West was later critiqued for its trends of assumption in the context of narrowly defined low-wage groups.^[82] The authors replied to the critiques and released additional data which addressed the criticism of their methodology, but did not resolve the issue of whether their data showed a causal relationship.^[83][84] Another 2013 study by Suzana Laporšek of the University of Primorska, on youth unemployment in Europe claimed there was "a negative, statistically significant impact of minimum wage on youth employment."^[85] A 2013 study by labor economists Tony Fang and Carl Lin which studied minimum wages and employment in China, found that "minimum wage changes have significant adverse effects on employment in the Eastern and Central regions of China, and result in disemployment for females, young adults, and low-skilled workers".^[86]

The labour market isn't as simple as that for widgets and is open to manipulation and abuse....

[Srikcir]

a 20% increase, will they work 20% harder, I doubt it, actually working harder to earn more money is not what these workers want, they would rather an increase for less work.It is cheap labour but then so is everything else in this country, higher wages mean more increases in living costs but they probably dont realize that

It comes to less than 3% per annum.

Under Prayut civil service got a 5% pay raise back-to-back for a two-year priod during which there was negative inflation. The current government seems more concerned about government employee loyalty than minimum wage earners.

Welcome to the Junta's reform for Equality.

[Thai at Heart]

a 20% increase, will they work 20% harder, I doubt it, actually working harder to earn more money is not what these workers want, they would rather an increase for less work.It is cheap labour but then so is everything else in this country, higher wages mean more increases in living costs but they probably dont realize that

It comes to less than 3% per annum.

Under Prayut civil service got a 5% pay raise back-to-back for a two-year priod during which there was negative inflation. The current government seems more concerned about government employee loyalty than minimum wage earners.

Welcome to the Junta's reform for Equality.

Exactly. Every company would love to know that their labour costs are fixed for the next 3 years. It is crazy that they don't mandate a minimum increase of some form of inflation movement. Basically, by the 3 yrd year the company will be profiting at the expense of its employees....