Business operators oppose Thai minimum wage increase now

[webfact]

Business operators oppose minimum wage increase now



BANGKOK: -- The Board of Trade and the Thai Chamber of Commerce disagree with increasing minimum wage claiming that it is not the right time yet as the economy is not fully recovering.

The BoT conducted a random opinion survey of 218 business operators and most of them said that it was not the right time now to adjust the minimum wage as demanded by labour unions, said BoT vice president Mr Phumin Harinsud on Tuesday.

The opinion survey shows the following results: 36.5 percent favour separate wages for separate places; 29.8 percent want wages to be determined by skills of the workers; most agree that the average minimum wage should be 293.45 baht/day; 299.39 baht for Bangkok and peripherals; 274.06 baht/day for the North; 300.58 baht/day for the South and 271.63 baht/day for the Northeast.

89 percent of the business operators agree that adjustment of minimum wage now will badly affect their businesses; 24.1 percent claim their production costs will rise up; 22.32 percent say they will lose; 11.31 percent say they will have to lay off some workers and 10.79 percent say they will introduce machinery to replace labour force.

Both the BoT and TCC agree that the minimum wage should be maintained at 300 baht/day.

Source: http://englishnews.thaipbs.or.th/business-operators-oppose-minimum-wage-increase-now


-- Thai PBS 2015-06-30

[peterq]

These would be business operators whose whole business plan and viability rest on their capacity to get away with paying less than areasaonable living wage to their employees, not to mention sub-standard conditions in the vast majority of work places. If their business plan relies on such de-based thinking, they don't deserve to be in business, and certainly don't deserve patronage by consumers.

[Travelman868]

I thought the official minimum wage was already 300 baht per day, of course a day has 24 hours.

Thailand do need to start regulating work conditions but as with everything it takes time

[bangkokfrog]

An unprofessional survey. Whether warranted or not, I don't think that a sample of 218 employers anywhere in the world would support an across the board increase in their country's minimum wage

[Bluespunk]

"The BoT conducted a random opinion survey of 218 business operators and most of them said that it was not the right time now to adjust the minimum wage as demanded by labour unions, said BoT vice president Mr Phumin Harinsud on Tuesday."

Now, there's a surprise…..

[Johnny S]

Surprise surprise ... The fat cats want the poor to remain poor ...

[Emster23]

They will always oppose raising wages now.... and now.... and now..... it's the nature of capitalism.

[robblok]

"The BoT conducted a random opinion survey of 218 business operators and most of them said that it was not the right time now to adjust the minimum wage as demanded by labour unions, said BoT vice president Mr Phumin Harinsud on Tuesday."

Now, there's a surprise…..

Of course its never the right time for this but with all things not going that great in Thailand I have to agree that doing it now is not the smartest move.

[Thai at Heart]

89 percent of the business operators agree that adjustment of minimum wage now will badly affect their businesses; 24.1 percent claim their production costs will rise up; 22.32 percent say they will lose; 11.31 percent say they will have to lay off some workers and 10.79 percent say they will introduce machinery to replace labour force.

So, production cost up.. and.....

They will lose......and.........

Badly effect their business. I.e. The owners make less money. This in and of itself is not a reason to not increase the minimum wage

[robblok]

89 percent of the business operators agree that adjustment of minimum wage now will badly affect their businesses; 24.1 percent claim their production costs will rise up; 22.32 percent say they will lose; 11.31 percent say they will have to lay off some workers and 10.79 percent say they will introduce machinery to replace labour force.

So, production cost up.. and.....

They will lose......and.........

Badly effect their business. I.e. The owners make less money. This in and of itself is not a reason to not increase the minimum wage

Unless they start making losses and have to close down and see work go to other countries. But if it just cuts a bit in their profit margin that is a different story.

[Thai at Heart]

89 percent of the business operators agree that adjustment of minimum wage now will badly affect their businesses; 24.1 percent claim their production costs will rise up; 22.32 percent say they will lose; 11.31 percent say they will have to lay off some workers and 10.79 percent say they will introduce machinery to replace labour force.

So, production cost up.. and.....

They will lose......and.........

Badly effect their business. I.e. The owners make less money. This in and of itself is not a reason to not increase the minimum wage

Unless they start making losses and have to close down and see work go to other countries. But if it just cuts a bit in their profit margin that is a different story.

Thats as maybe. Hence, my statement, that effecting my business isn't a reason to not increase the minimum wage in and of itself.

[PattayaPhom]

Since the introduction of 300 a day prices for almost everything have increased, its a vicious circle that could easily be learnt from the mistakes made by Western countries in the 70's.....higher wages = higher cost of goods/services...not too hard to understand

[NeverSure]

So, "some people" believe that most business people are "fat cats" and their Thai employees are angelic, highly productive people who are producing much more than they are paid for.

"Some people" don't know that if you raise wages you also raise prices to keep businesses from going under and the people on the bottom stay on the bottom.

If it's that simple and that easy, why doesn't everyone work for himself, become a "fat cat", and no one would be a slave to a job ever again? Everyone should be a "fat cat", right?

[NeverSure]

Why would expats in Thailand cheer for strong inflation of the prices of goods and services when Thais would suffer the same thing? Why would expats in Thailand not see how much prices have increased since the last and recent raise in the minimum wage? Why wouldn't they see that Thais really aren't any better off with higher wages and prices and that expats are worse off?

No wonder there is a bunch of broke-ass people after a life devoid of math.

[robblok]

So, "some people" believe that most business people are "fat cats" and their Thai employees are angelic, highly productive people who are producing much more than they are paid for.

"Some people" don't know that if you raise wages you also raise prices to keep businesses from going under and the people on the bottom stay on the bottom.

If it's that simple and that easy, why doesn't everyone work for himself, become a "fat cat", and no one would be a slave to a job ever again? Everyone should be a "fat cat", right?

Your right, but neither you and I know how much profit they make on their employees. If they are making crazy amounts of money and exploiting their employees then that is an other story.

So it kinda depends on the facts, and we both don't know them. I am all for capitalism but not at all cost.

[NeverSure]

So, "some people" believe that most business people are "fat cats" and their Thai employees are angelic, highly productive people who are producing much more than they are paid for.

"Some people" don't know that if you raise wages you also raise prices to keep businesses from going under and the people on the bottom stay on the bottom.

If it's that simple and that easy, why doesn't everyone work for himself, become a "fat cat", and no one would be a slave to a job ever again? Everyone should be a "fat cat", right?

Your right, but neither you and I know how much profit they make on their employees. If they are making crazy amounts of money and exploiting their employees then that is an other story.

So it kinda depends on the facts, and we both don't know them. I am all for capitalism but not at all cost.

Most businesses don't make crazy amounts of money, not even a franchise burger place or 7/11 much less an independent place. Most businesses creating most jobs are small private businesses we see all up and down the streets. The most difficult job they have is managing costs because income is going to top out at some point.

A good business runs on a margin that's not that big, and if managed properly states all expenses as a percentage of income. That's the way you see where you're gaining or losing. If labor costs get a bit too high as a percentage you have to cut back there. If people are lazy it makes it much harder to hold payroll costs in line. Running a business is a hard job that most bleeding hearts aren't even willing to do. Most businesses are making it month to month.

If wages are raised prices must go up or the small percentage of profit disappears. Every business will raise prices to survive and that keeps customers from going elsewhere where it's cheaper to the large extent.

There ain't no such thing as a free lunch. Someone has to pay that minimum wage and it's the customer, not the business. The customer also has to pay the increased cost for everything else as other businesses/suppliers raise prices to the business.

It's a vicious circle that is self-fulfilling. Surely every expat can see how much prices went up after that last increase in wages gaining nothing for the masses or the businesses.

Cheers

[Thai at Heart]

So, "some people" believe that most business people are "fat cats" and their Thai employees are angelic, highly productive people who are producing much more than they are paid for.

"Some people" don't know that if you raise wages you also raise prices to keep businesses from going under and the people on the bottom stay on the bottom.

If it's that simple and that easy, why doesn't everyone work for himself, become a "fat cat", and no one would be a slave to a job ever again? Everyone should be a "fat cat", right?

Your right, but neither you and I know how much profit they make on their employees. If they are making crazy amounts of money and exploiting their employees then that is an other story.

So it kinda depends on the facts, and we both don't know them. I am all for capitalism but not at all cost.

Most businesses don't make crazy amounts of money, not even a franchise burger place or 7/11 much less an independent place. Most businesses creating most jobs are small private businesses we see all up and down the streets. The most difficult job they have is managing costs because income is going to top out at some point.

A good business runs on a margin that's not that big, and if managed properly states all expenses as a percentage of income. That's the way you see where you're gaining or losing. If labor costs get a bit too high as a percentage you have to cut back there. If people are lazy it makes it much harder to hold payroll costs in line. Running a business is a hard job that most bleeding hearts aren't even willing to do. Most businesses are making it month to month.

If wages are raised prices must go up or the small percentage of profit disappears. Every business will raise prices to survive and that keeps customers from going elsewhere where it's cheaper to the large extent.

There ain't no such thing as a free lunch. Someone has to pay that minimum wage and it's the customer, not the business. The customer also has to pay the increased cost for everything else as other businesses/suppliers raise prices to the business.

It's a vicious circle that is self-fulfilling. Surely every expat can see how much prices went up after that last increase in wages gaining nothing for the masses or the businesses.

Cheers

Whilst it would seem like a very obvious connection between minimum wage and inflation, it is in no way a direct connection. This is by no means a proven connection, as much as right wing economists have tried to prove. In Thailand, the cost of fuel and logistics makes up a huge wedge of the cost of products.

http://www.dol.gov/minwage/mythbuster.htm

Overal cost of crude oil in USD terms versus baht terms makes a greater contribution to bottom line costs than wages alone. Oil fuels everything from the fertiliser, to the packaging, the plastics, to running the boilers, to running the power stations, to running the trucks that are all needed to get industry moving. This is why, devaluing the currency will not deliver what Thailand needs. It will give with one and take with the other because any reduction in the cost of domestic inputs in any produtive process will be outweighed by the cost of imported inputs including fuel cost.

Yes there has been inflationary pressure the last few years in Thailand, this isn't to be laid 100% at the foot of the minimum wage. It is far more nuanced than that.

[robblok]

So, "some people" believe that most business people are "fat cats" and their Thai employees are angelic, highly productive people who are producing much more than they are paid for.

"Some people" don't know that if you raise wages you also raise prices to keep businesses from going under and the people on the bottom stay on the bottom.

If it's that simple and that easy, why doesn't everyone work for himself, become a "fat cat", and no one would be a slave to a job ever again? Everyone should be a "fat cat", right?

Your right, but neither you and I know how much profit they make on their employees. If they are making crazy amounts of money and exploiting their employees then that is an other story.

So it kinda depends on the facts, and we both don't know them. I am all for capitalism but not at all cost.

Most businesses don't make crazy amounts of money, not even a franchise burger place or 7/11 much less an independent place. Most businesses creating most jobs are small private businesses we see all up and down the streets. The most difficult job they have is managing costs because income is going to top out at some point.

A good business runs on a margin that's not that big, and if managed properly states all expenses as a percentage of income. That's the way you see where you're gaining or losing. If labor costs get a bit too high as a percentage you have to cut back there. If people are lazy it makes it much harder to hold payroll costs in line. Running a business is a hard job that most bleeding hearts aren't even willing to do. Most businesses are making it month to month.

If wages are raised prices must go up or the small percentage of profit disappears. Every business will raise prices to survive and that keeps customers from going elsewhere where it's cheaper to the large extent.

There ain't no such thing as a free lunch. Someone has to pay that minimum wage and it's the customer, not the business. The customer also has to pay the increased cost for everything else as other businesses/suppliers raise prices to the business.

It's a vicious circle that is self-fulfilling. Surely every expat can see how much prices went up after that last increase in wages gaining nothing for the masses or the businesses.

Cheers

Your right, in what you say but so am I. We don't know how much they make and what you and I know from experience (im an accountant and see many businesses) might not apply here.

In Thailand there were no unions and other stuff making sure that profits did not get too high, here there is an enormous gap in in incomes. So I am not 100% sure that the thing we in the Western world see applies here.

Otherwise I would agree.

[robblok]

So, "some people" believe that most business people are "fat cats" and their Thai employees are angelic, highly productive people who are producing much more than they are paid for.

"Some people" don't know that if you raise wages you also raise prices to keep businesses from going under and the people on the bottom stay on the bottom.

If it's that simple and that easy, why doesn't everyone work for himself, become a "fat cat", and no one would be a slave to a job ever again? Everyone should be a "fat cat", right?

Your right, but neither you and I know how much profit they make on their employees. If they are making crazy amounts of money and exploiting their employees then that is an other story.

So it kinda depends on the facts, and we both don't know them. I am all for capitalism but not at all cost.

Most businesses don't make crazy amounts of money, not even a franchise burger place or 7/11 much less an independent place. Most businesses creating most jobs are small private businesses we see all up and down the streets. The most difficult job they have is managing costs because income is going to top out at some point.

A good business runs on a margin that's not that big, and if managed properly states all expenses as a percentage of income. That's the way you see where you're gaining or losing. If labor costs get a bit too high as a percentage you have to cut back there. If people are lazy it makes it much harder to hold payroll costs in line. Running a business is a hard job that most bleeding hearts aren't even willing to do. Most businesses are making it month to month.

If wages are raised prices must go up or the small percentage of profit disappears. Every business will raise prices to survive and that keeps customers from going elsewhere where it's cheaper to the large extent.

There ain't no such thing as a free lunch. Someone has to pay that minimum wage and it's the customer, not the business. The customer also has to pay the increased cost for everything else as other businesses/suppliers raise prices to the business.

It's a vicious circle that is self-fulfilling. Surely every expat can see how much prices went up after that last increase in wages gaining nothing for the masses or the businesses.

Cheers

Whilst it would seem like a very obvious connection between minimum wage and inflation, it is in no way a direct connection. This is by no means a proven connection, as much as right wing economists have tried to prove. In Thailand, the cost of fuel and logistics makes up a huge wedge of the cost of products.

http://www.dol.gov/minwage/mythbuster.htm

Overal cost of crude oil in USD terms versus baht terms makes a greater contribution to bottom line costs than wages alone. Oil fuels everything from the fertiliser, to the packaging, the plastics, to running the boilers, to running the power stations, to running the trucks that are all needed to get industry moving. This is why, devaluing the currency will not deliver what Thailand needs. It will give with one and take with the other because any reduction in the cost of domestic inputs in any produtive process will be outweighed by the cost of imported inputs including fuel cost.

Yes there has been inflationary pressure the last few years in Thailand, this isn't to be laid 100% at the foot of the minimum wage. It is far more nuanced than that.

Not 100% but for a large part it was the raise that started it. you can't just give people 100% raise and no increased productivity and not expect inflation. Your totally wrong here if you think like that. I was here when YL raised the wages and saw its effect on everything in the market. Such high raises are crazy.

Edited June 30, 2015 by robblok

[Thai at Heart]

So, "some people" believe that most business people are "fat cats" and their Thai employees are angelic, highly productive people who are producing much more than they are paid for.

"Some people" don't know that if you raise wages you also raise prices to keep businesses from going under and the people on the bottom stay on the bottom.

If it's that simple and that easy, why doesn't everyone work for himself, become a "fat cat", and no one would be a slave to a job ever again? Everyone should be a "fat cat", right?

Your right, but neither you and I know how much profit they make on their employees. If they are making crazy amounts of money and exploiting their employees then that is an other story.

So it kinda depends on the facts, and we both don't know them. I am all for capitalism but not at all cost.

Most businesses don't make crazy amounts of money, not even a franchise burger place or 7/11 much less an independent place. Most businesses creating most jobs are small private businesses we see all up and down the streets. The most difficult job they have is managing costs because income is going to top out at some point.

A good business runs on a margin that's not that big, and if managed properly states all expenses as a percentage of income. That's the way you see where you're gaining or losing. If labor costs get a bit too high as a percentage you have to cut back there. If people are lazy it makes it much harder to hold payroll costs in line. Running a business is a hard job that most bleeding hearts aren't even willing to do. Most businesses are making it month to month.

If wages are raised prices must go up or the small percentage of profit disappears. Every business will raise prices to survive and that keeps customers from going elsewhere where it's cheaper to the large extent.

There ain't no such thing as a free lunch. Someone has to pay that minimum wage and it's the customer, not the business. The customer also has to pay the increased cost for everything else as other businesses/suppliers raise prices to the business.

It's a vicious circle that is self-fulfilling. Surely every expat can see how much prices went up after that last increase in wages gaining nothing for the masses or the businesses.

Cheers

Your right, in what you say but so am I. We don't know how much they make and what you and I know from experience (im an accountant and see many businesses) might not apply here.

In Thailand there were no unions and other stuff making sure that profits did not get too high, here there is an enormous gap in in incomes. So I am not 100% sure that the thing we in the Western world see applies here.

Otherwise I would agree.

I agree. I have seen far too many massively inefficient factories using hundreds upon hundreds of minimum wage employees over the years in Thailand.

Amazingly though, when the increase came, a couple of companies I know of, simply invested in some long awaited machinery, but didnt get rid of anyone, since this new machinery needed maintenance and servicing. Now, admittedly, the rise to 300 was quite severe and so constitutied a shock to some, but it isn't as though reported unemployment is running away with itself, and reportedly they continue to import labour.

[Ace of Pop]

A good business to some requires the small thrifty person to save money . Be successfully . Just to be labeled a rich bastard. CP, Tesco you name em all the big boys kill us using dirty accountant look at Richard Green as apposed to Branson who hides nowhere

[Thai at Heart]

Not 100% but for a large part it was the raise that started it. you can't just give people 1000% raise and no increased productivity and not expect inflation. Your totally wrong here if you think like that. I was here when YL raised the wages and saw its effect on everything in the market. Such high raises are crazy.

Well, first of all, they didn't get 1000% increase did they. Some areas got more than others, but they had had below inflationary rates of increase for nearly 10 years.

http://www.tradingeconomics.com/thailand/minimum-wages

I saw the effect on the market too, and it wasn't solely the increase in wages that caused this price increases.

http://www.tradingeconomics.com/commodity/crude-oil

From 2010 to 2014 crude oil went from 68 USD per barrel to 115 USD per barrel. It has been dropping for the last year or so, and the inflation rate in Thailand is approaching negative growth. Yes minimum wages will have contributed some, but during a period where oil doubled in price, discounting its contribution and placing it all at the foot of the minimum wage is pretty narrow minded in my opinion.

Minimum wages have been stagnant since 2012. At a minimum, in 3 years, the companies are already 8 to 10% better off against inflationary rates for minimum wage employeers. The rate by now should be at least 320 baht......Every year they don't increase it, they are stealing from the poorest in society.

[robblok]

Not 100% but for a large part it was the raise that started it. you can't just give people 1000% raise and no increased productivity and not expect inflation. Your totally wrong here if you think like that. I was here when YL raised the wages and saw its effect on everything in the market. Such high raises are crazy.

Well, first of all, they didn't get 1000% increase did they. Some areas got more than others, but they had had below inflationary rates of increase for nearly 10 years.

http://www.tradingeconomics.com/thailand/minimum-wages

I saw the effect on the market too, and it wasn't solely the increase in wages that caused this price increases.

http://www.tradingeconomics.com/commodity/crude-oil

From 2010 to 2014 crude oil went from 68 USD per barrel to 115 USD per barrel. It has been dropping for the last year or so, and the inflation rate in Thailand is approaching negative growth. Yes minimum wages will have contributed some, but during a period where oil doubled in price, discounting its contribution and placing it all at the foot of the minimum wage is pretty narrow minded in my opinion.

Minimum wages have been stagnant since 2012. At a minimum, in 3 years, the companies are already 8 to 10% better off against inflationary rates for minimum wage employeers. The rate by now should be at least 320 baht......Every year they don't increase it, they are stealing from the poorest in society.

I wanted to write 100% (as some really got 100% or more), and you are now agreeing it caused quite a bit of inflation. It was the main course there were some other things too but this was the main reason.

Every year they don't increase is not stealing.. not after you just got a 100% raise. I bet you never got a 100% raise.. i know I never got one that high.

Fact is I can understand small raises.. but not these kinds. But you need to get more productive too.. and Thais are just not that productive. (just look at the big C and or home pro and watch them all stand and do nothing.

I am all for raises.. but not the kind they got before because they hurt everyone by driving up inflation.

[Thai at Heart]

Not 100% but for a large part it was the raise that started it. you can't just give people 1000% raise and no increased productivity and not expect inflation. Your totally wrong here if you think like that. I was here when YL raised the wages and saw its effect on everything in the market. Such high raises are crazy.

Well, first of all, they didn't get 1000% increase did they. Some areas got more than others, but they had had below inflationary rates of increase for nearly 10 years.

http://www.tradingeconomics.com/thailand/minimum-wages

I saw the effect on the market too, and it wasn't solely the increase in wages that caused this price increases.

http://www.tradingeconomics.com/commodity/crude-oil

From 2010 to 2014 crude oil went from 68 USD per barrel to 115 USD per barrel. It has been dropping for the last year or so, and the inflation rate in Thailand is approaching negative growth. Yes minimum wages will have contributed some, but during a period where oil doubled in price, discounting its contribution and placing it all at the foot of the minimum wage is pretty narrow minded in my opinion.

Minimum wages have been stagnant since 2012. At a minimum, in 3 years, the companies are already 8 to 10% better off against inflationary rates for minimum wage employeers. The rate by now should be at least 320 baht......Every year they don't increase it, they are stealing from the poorest in society.

I wanted to write 100% (as some really got 100% or more), and you are now agreeing it caused quite a bit of inflation. It was the main course there were some other things too but this was the main reason.

Every year they don't increase is not stealing.. not after you just got a 100% raise. I bet you never got a 100% raise.. i know I never got one that high.

Fact is I can understand small raises.. but not these kinds. But you need to get more productive too.. and Thais are just not that productive. (just look at the big C and or home pro and watch them all stand and do nothing.

I am all for raises.. but not the kind they got before because they hurt everyone by driving up inflation.

It still wasnt a 100% increase either. Bangkok and other southern areas were already 230 baht.

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQFjAA&url=http%3A%2F%2Fftp.iza.org%2Fdp7911.pdf&ei=ErqSVaHOA8qt7gb23ajQDA&usg=AFQjCNFE2VfN2Lw6jAcbgevX7tORFEOBRw&sig2=SxVAIUoCoqYOdkUdALBCCg

Homepro and Big C are not the problem. They are hardly labour intensive places. It is the clothing manufacturers and the food processors who employ bodies by the thousand in factories that this effects. And, most of them were already paying more than 300 due to piece meal rates and decent production. But for them, 300 appears to be a sticky number. I have two old friends in textiles, and they reckon about 350 will be a breaking point because they can't find any more efficiency to compete with neighbours. However, that assumes that the neighbours don't increase their rates for a few years.

So, the role of the minimum wage in inflation isn't a 100% relationship. It contributes, but in THaialnd there are other factors such as crude oil that have a very big effect and are beyond the control of anyone.

They should mandate that it rises by at least inflation and that is it. Done and dusted. No discussion.

[robblok]

Not 100% but for a large part it was the raise that started it. you can't just give people 1000% raise and no increased productivity and not expect inflation. Your totally wrong here if you think like that. I was here when YL raised the wages and saw its effect on everything in the market. Such high raises are crazy.

Well, first of all, they didn't get 1000% increase did they. Some areas got more than others, but they had had below inflationary rates of increase for nearly 10 years.

http://www.tradingeconomics.com/thailand/minimum-wages

I saw the effect on the market too, and it wasn't solely the increase in wages that caused this price increases.

http://www.tradingeconomics.com/commodity/crude-oil

From 2010 to 2014 crude oil went from 68 USD per barrel to 115 USD per barrel. It has been dropping for the last year or so, and the inflation rate in Thailand is approaching negative growth. Yes minimum wages will have contributed some, but during a period where oil doubled in price, discounting its contribution and placing it all at the foot of the minimum wage is pretty narrow minded in my opinion.

Minimum wages have been stagnant since 2012. At a minimum, in 3 years, the companies are already 8 to 10% better off against inflationary rates for minimum wage employeers. The rate by now should be at least 320 baht......Every year they don't increase it, they are stealing from the poorest in society.

I wanted to write 100% (as some really got 100% or more), and you are now agreeing it caused quite a bit of inflation. It was the main course there were some other things too but this was the main reason.

Every year they don't increase is not stealing.. not after you just got a 100% raise. I bet you never got a 100% raise.. i know I never got one that high.

Fact is I can understand small raises.. but not these kinds. But you need to get more productive too.. and Thais are just not that productive. (just look at the big C and or home pro and watch them all stand and do nothing.

I am all for raises.. but not the kind they got before because they hurt everyone by driving up inflation.

It still wasnt a 100% increase either. Bangkok and other southern areas were already 230 baht.

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQFjAA&url=http%3A%2F%2Fftp.iza.org%2Fdp7911.pdf&ei=ErqSVaHOA8qt7gb23ajQDA&usg=AFQjCNFE2VfN2Lw6jAcbgevX7tORFEOBRw&sig2=SxVAIUoCoqYOdkUdALBCCg

Homepro and Big C are not the problem. They are hardly labour intensive places. It is the clothing manufacturers and the food processors who employ bodies by the thousand in factories that this effects. And, most of them were already paying more than 300 due to piece meal rates and decent production. But for them, 300 appears to be a sticky number. I have two old friends in textiles, and they reckon about 350 will be a breaking point because they can't find any more efficiency to compete with neighbours. However, that assumes that the neighbours don't increase their rates for a few years.

So, the role of the minimum wage in inflation isn't a 100% relationship. It contributes, but in THaialnd there are other factors such as crude oil that have a very big effect and are beyond the control of anyone.

They should mandate that it rises by at least inflation and that is it. Done and dusted. No discussion.

It contributed a LOT to the inflation and that its not a 100% relation that is clear but it made all things here a lot more expensive. As for rising it to meet inflation that is the norm in most countries.. though only if the economy is good.

But nothing like the raise before that was madness. That bangkok was already 230.. but there were many lower too.. so I get quite close with my 100% raise and even if it was 80% it was crazy and raised prices and there are already factories leaving Thailand to go to cheaper wages. So it all depends what they want.. no work.. or at this level of salary.

[Thai at Heart]

www.aseancenter.org.tw/upload/files/outlook009-06.pdf

The most underpressure industry is textiles and clothing manufacture and gems and jewelry. But still, wages only make up 24% of costs at worst case. Interesting article

[Thai at Heart]

http://in.reuters.com/article/2011/03/02/idINIndia-55257020110302

For the past decade, Thailand's minimum wage has trailed inflation, creating one of the widest gaps between rich and poor in Asia according to the World Bank, and fuelling working-class frustrations that erupted into violent street protests last year.

According to Thailand's Labour Ministry, there were only two years in the past decade when the increase in minimum wage exceeded inflation: in 2001 when inflation was 1.6 percent and the increase was 2.2 percent and 2007 when inflation was 2.3 percent and the wage rose 3.1 percent.

Maybe they were just readjusting what should have been coming their way all along>........

[Nigeone]

I'm sure there are many factors that make up the rises in goods and services but I will never understand how you can raise the mininum wage by 100% and not expect prices and services to increase..I used to try and explain to Thai family that if a guy employs people for 200bht and then it goes up to 300bht that money comes from somewhere..he has to charge more for his product or services who then pass that on and so it goes on..it's not rocket science is it..initially of course it doesn't show because it takes a few months or more to filter through but be sure it always will..I would have at a guess that after that settling readjusting period Thai people would be actually no better off and maybe even worse of if you take in all the other factors..Ex pats of course would I would thing be surely worse of for goods and services..

[NeverSure]

Whilst it would seem like a very obvious connection between minimum wage and inflation, it is in no way a direct connection. This is by no means a proven connection, as much as right wing economists have tried to prove. In Thailand, the cost of fuel and logistics makes up a huge wedge of the cost of products.

http://www.dol.gov/minwage/mythbuster.htm

Overal cost of crude oil in USD terms versus baht terms makes a greater contribution to bottom line costs than wages alone. Oil fuels everything from the fertiliser, to the packaging, the plastics, to running the boilers, to running the power stations, to running the trucks that are all needed to get industry moving. This is why, devaluing the currency will not deliver what Thailand needs. It will give with one and take with the other because any reduction in the cost of domestic inputs in any produtive process will be outweighed by the cost of imported inputs including fuel cost.

Yes there has been inflationary pressure the last few years in Thailand, this isn't to be laid 100% at the foot of the minimum wage. It is far more nuanced than that.

So in the past few years as the cost of oil went down did consumer prices of everything else go down, or just oil? Did fertilizer made from oil go down in Thailand? How about tires made from oil? No they didn't. Only gasoline went down because there was a glut of it and in Thailand with price controls it didn't go down in lockstep at all.

Your example using oil isn't related to wages which the OP is. Can you instead give an example of what happens to a restaurant which has a 7% net profit when wages increase by that same 7%?

Can you further explain what happens to a restaurant when not only its wages increase but the costs of all of its purchased supplies also increase as other businesses scramble to cover the additional costs of wages?

It has a domino affect in that as everything begins to increase it spills over into everything else that begins to increase. Almost nothing can stay at the same price because cost increases reverberate through the economy.

(You're out of your league here.)

[englishoak]

Prices have been dropping most places around the globe since oil went back down. Only problem is Thailand never has high street price deflation, they just raise them if theres a slowdown in trade.

One day they will hit the proverbial brick wall, if they havnt already and just wont accept it yet.