Raising Thai minimum wage would raise smiles in Vietnam
Re: “Labour unions propose redefining of minimum wage”, Thai PBS, September 10.
I do agree that Bt300 per day is pitiful and many people have problems living on that.
To go from Bt300 to Bt600 or Bt700 a day is a laudable thing but brings with it new problems.
Firstly no employers can really afford a doubling of the wage packets without a corresponding doubling of the work rate and doubling of the efficiency.
Secondly a big part of the wage problem is the overstaffing in many places. For example I bought a circular saw blade for Bt210 at a HomePro shop in Nakhon Sawan. I counted 10 people behind the cash tills and admin area and at least five staff out on the shop floor. There was only one other customer that I saw, so how can they make any money or profit on Bt210?
The electricity bills alone for such businesses must be enormous not to mention staff wages, even at Bt300 per day.
When robotics are really introduced into Thailand there will be many undereducated Thais losing their jobs. I wonder if we will see a Thai version of 19th-century British Luddites – workers who smashed machinery in protest at mechanisation?
If the national minimum wage is doubled then the cost of living will be doubled at least, and then another pay rise will be needed – a vicious circle.
I have no answer to the problem.
“He suggested that the appropriate minimum wage should be between Bt600-Bt700.”
If this utterly insane proposition goes through, it will be the final nail in the coffin of foreign investment. As a young entrepreneur who moved here to start an arts and crafts company that employs uneducated locals full-time for non-strenuous manual labour work, I can say that while this proposition looks good on the surface it will ultimately be the death of uneducated Thais in the lower socio-economic strata. Many Thais already struggle to obtain the necessary tools or mental aptitude that allow them to create something of value in the vicinity of Bt300 daily. As an employer, I am now being asked to raise that bar even higher. This means that apart from being able to simply work with their hands, anyone I hire now has to be able to also recite poetry, fix computers, design catalogues and make spreadsheets for clients. In an industry that is constantly competing with cheap mass-produced products this wage increase would mean that my company’s already expensive hand-made goods would be priced entirely out of the market. I cannot automate because my products are made entirely by hand and thus depend on a low labour wage. I cannot cut into my own profits because there simply aren’t any. We are a new business and have been burning through our savings while working 80-hour weeks for over a year. In short, this would put us out of business overnight.
Now, we would not mind paying Bt600-700 if we could find sensible, multi-skilled, driven individuals with a good work ethic and a healthy determination to succeed. But we all know that Thailand’s education system fails spectacularly at creating such individuals.
This wage increase could work if there was already a large pool of highly skilled specialists, but right now no such pool exists.
The question is: what does Thailand have to offer to foreign investors when the low minimum wage disappears? The answer is: not much, especially when a country like Vietnam is right around the corner.
God, no! Thai people on this minimum wage already have bank mortgages, motorbikes, cars, stereo systems, and drink whisky and party all the time. Double their income and they’ll be buying boats, jet-skis, planes and villas next.
On a serious note, while it is low, I feel Thailand is set to go seriously downhill if they do raise it. Hundreds of thousands, if not millions, will lose their jobs and prices will most likely go up 20 per cent+ to cover the raise. I do not know the solution, but Thailand is cheap and that probably feeds into their exports. Double their costs and those exports will be bought elsewhere. With the baht high and prices rising if the basic wage goes up, Thailand looks more unappealing.
When the rate was increased to Bt300 per day, or Bt15,000 per month for graduates, many people didn’t actually receive it, and some still don’t.
The same thing would happen again this time.
That said, it’s a few years now since that major increase, and we are definitely overdue for another reasonable increase.
One thing that all Thai governments need to educate people about is that increases need to be earned, through efficiency gains or slimming down of the workforces. I am happy to pay my gardener B420/day on a five-day week, instead of B350/day on a six-day week, but he’ll have to do the same amount of work for it, and not get caught snoozing behind the bushes so often!
Now that’s not going to go down well. But it remains true, nevertheless.
Companies who claim that they are unable to pay $20 per day for a full day’s work are lying through their teeth and, if they do go out of business, then they also deserve to go out of business. This will be because they are run by morons.