News Forum - Minimum daily wage in Thailand looks set to increase to 492 baht

[Thaiger]

The Labour Ministry is expected to approve a rise in Thailand’s daily minimum wage from 336 baht to a flat rate of 492, according to a Nation Thailand report. The sharp increase comes just 2 years after a previous hike and is expected to mainly favour labourers. It’s understood that 2 agencies representing workers in the Tripartite Wage Committee have proposed the increase and approved it in principle. The Tripartite Wage Committee consists of employers, worker representatives, and government officials. The government is represented by the Labour Ministry, workers are represented by the Thai Labour Solidarity Committee and State Enterprises […]

The story Minimum daily wage in Thailand looks set to increase to 492 baht as seen on Thaiger News.

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[Soidog]

Wow!  That’s a 46% increase. I’m all for increasing the minimum wage, but it has to be done using sound economics and employment policies and practices. 
 

The obvious concern with a rise in wages is a rise in prices. In reality, there is a large variation in wage increases and prices increases. A 10% rise in wages is often met with only a 1%-2% price increase.  The other way for companies to absorb wage increases is to accept lower profits. Finally, the third option is all about efficiency and productivity of operations, often referred to as “Agile production” leading to more output and/or doing the same but with less resources. My concern with this being applied in Thailand is that I doubt companies will accept less profits. Management skills are at the standards required and employee collaboration to improve operations is not something that comes easily. 
 

I wish them well in this endeavour. However, this is a high risk strategy especially as the country is looking to emerge from Covid and the pressures already on inflation. Ultimately there is no such thing as free money. It has to be paid for in some way. 

[KaptainRob]

Not approved yet but if it gets the nod you can be sure Anutin will use it as vote-buying among lower paid Thai's. 

[Soidog]

10 minutes ago, KaptainRob said:

Not approved yet but if it gets the nod you can be sure Anutin will use it as vote-buying among lower paid Thai's. 

Well it’s certainly what is referred to as a populist policy. 

[KhunG]

The minimum wage is and always has been zero.  All the government can do is mandate a reduction in employment and economic activity by interfering.

 

[Cabra]

This is good for very young adults (working menial labor) and farmers/field workers. The majority of everyone else (particularly in larger metro areas) is already make over minimum - if working for a larger established/name brand  employer.

[longwood50]

Minimum wage - Now that means the government not the marketplace determines what a job is worth, and what a person is willing to do that job for. 

That is a perfect way to add to the misery already facing the Thai worker who is devastated by the soft economy due to Covid.  Employers already struggling to exist will have to fire more workers rather than lose more money from lack of business. 

The higher the cost of an employee the greater the incentive on the part of the employer to 
1. reduce the number of employees and/or reduce hours  2. automate eliminating workers and 3. close their business because they no longer can make a profit. 

So who is the winner.  The few workers who get paid more for doing the exact same work.  Who are the losers, the workers whose jobs get eliminated, hours reduced or those never hired because they are too expensive. 

You want higher wages for those working, make the economy strong so businesses are busy and they need extra workers to meet the demand.  

It is important to keep in mine, that the higher wages get passed on to the customers in the form of higher costs.  So when you go to the stores and the prices are higher yet, just remember.  You help one group of people at the expense of others. 

[Fluke]

26 minutes ago, longwood50 said:

 So when you go to the stores and the prices are higher yet, just remember.  You help one group of people at the expense of others. 

Its the richer people paying more , so that poorer people can have a living wage .

Poorer people with some extra Baht in their pocket will go and spend it locally , which will boost the economy 

[poohy]

42 minutes ago, Cabra said:

This is good for very young adults (working menial labor) and farmers/field workers. The majority of everyone else (particularly in larger metro areas) is already make over minimum - if working for a larger established/name brand  employer.

We live in the countryside in south of Hua Hin 

Farming field workers

Good it would be if they get it

BUT  they dont get minimum wage now 300THB

they certainly will not get paid 492 THB

Edited February 9, 2022 by poohy

[LoongFred]

As long as there aren't big disparities in wages between Bangkok and the provinces I'm OK.  If  there is too much of a difference between Bangkok and the provinces, more labor will move to Bangkok and place development in the provinces at a disadvantage. 

[Noble_Design]

21 minutes ago, poohy said:

We live in the countryside in south of Hua Hin 

Farming field workers

Good it would be if they get it

BUT  they dont get minimum wage now 300THB

they certainly will not get paid 492 THB

Are those field workers of Thai nationality or migrant workers? I believe minimum wage are only for Thai workers not migrant workers.

[Loong]

I think that this is a good thing but the timing could have been a lot better. Many businesses are struggling because of covid and this may well tip them over the edge.

[poohy]

9 minutes ago, Noble_Design said:

Are those field workers of Thai nationality or migrant workers? I believe minimum wage are only for Thai workers not migrant workers.

the only ones i know are Thai

One  i know for sure gets paid 220 a day labouring looking after cows etc

No idea what Burmese(and there's lots of them here) get paid

Also some hotels are or were paying 6/7000 for cleaning staff prior to covid 6 day week

it not Bangkok or anywhere near it here

 

Edited February 9, 2022 by poohy

[Cabra]

1 hour ago, LoongFred said:

As long as there aren't big disparities in wages between Bangkok and the provinces I'm OK.  If  there is too much of a difference between Bangkok and the provinces, more labor will move to Bangkok and place development in the provinces at a disadvantage. 

People will usually paid more in large cities. In 2018/2019 the average salary in Bangkok was 20,000 per month. That's about 650 per day if working 30 days each month.

[Cabra]

2 hours ago, poohy said:

We live in the countryside in south of Hua Hin 

Farming field workers

Good it would be if they get it

BUT  they dont get minimum wage now 300THB

they certainly will not get paid 492 THB

That's interesting. In Mukdahan the laborers harvesting rice are paid 400 baht per day (adult or children) for a full 8 hour day. Of course there are many different farming related jobs (tending livestock, etc.) that pay different rates. Per my girlfriend, her family will likely have to pay more for harvesting labor when/of this law goes into affect.

[longwood50]

3 hours ago, Fluke said:

Its the richer people paying more , so that poorer people can have a living wage .

Poorer people with some extra Baht in their pocket will go and spend it locally , which will boost the economy 

Fluke, 

Sorry but you miss the point EVERYONE Rich or Poor buys products.  So when the Poor go to the grocery store, hardware store, gasoline station, the higher wages impacts them every bit as much as the wealthy.  

As to your comment about "boosting the economy" that makes no sense at all.  If you charge more for your products because of the minimum wage those spending it have less dollars to spend on other products.  Raising the minimum wage is what is called a Zero Sum Game.  You take from one group of people to give to another.  The net effect is ZERO. 

 

[Fluke]

9 minutes ago, longwood50 said:

Fluke, 

Sorry but you miss the point EVERYONE Rich or Poor buys products.  So when the Poor go to the grocery store, hardware store, gasoline station, the higher wages impacts them every bit as much as the wealthy.  

As to your comment about "boosting the economy" that makes no sense at all.  If you charge more for your products because of the minimum wage those spending it have less dollars to spend on other products.  Raising the minimum wage is what is called a Zero Sum Game.  You take from one group of people to give to another.  The net effect is ZERO. 

 

Yes, but the richer people spend more than the poorer people . 

If you have a 500 Baht meal in a restaurant and the worker gets 300 Baht per day , he would spend his wages on basic survival , food and rent and telephone .

   If you then paid 600 Baht for a meal and the worker got 400 baht per day , he would spend that extra money in the local economy , but yes  he would also be subject to local price rises  , making his extra 100 baht have the spending power of 50 Baht , due to inflation 

[longwood50]

3 hours ago, Cabra said:

This is good for very young adults (working menial labor) and farmers/field workers. The majority of everyone else (particularly in larger metro areas) is already make over minimum - if working for a larger established/name brand  employer.

This comment is just not sensical.  If raising the wages had NO NEGATIVE IMPACT why stop at 492 baht, why not 1,000 baht or 10,000 baht per hour.  

For every baht paid to a workers 'SOMEBODY" pays.  The employer is only a go between.  The employer is the one who gives the money to the worker but it is the employer's customers who provide the money so that the employer can pay the worker.  The employer "keeps" only the difference between the total amount that they sell, and the total amount of the costs incurred to sell it.  That is "profit"  Wages are costs.  There are only two ways that the wage increase can be dealt with.  The employer passes on those costs in the form of higher prices or the employer accepts a lower "profit"  

If it is the price increase, then everyone who buys Rich or Poor will pay more for the identical product or service leaving them with less to live on.  If it is the employer who bears some or all of the increase in wages then the employer earns less profit leaving them with less to live on.  The natural incentive is for the employer with higher wages to employ fewer people, reduce the hours of those working, and if possible automate to eliminate the jobs.  The higher the employee cost the greater the incentive on the employer to eliminate them.  

This is not a magic goose that lays golden eggs.  A higher minimum wage is merely income redistribution.  It takes from the employers and/or their customers and gives to the minimum wage earner.  That is a zero sum game given that in total the net effect is zero.  One group gets more, the other less. 

Those that are earning minimum wage should learn some skill to make them "worth" more.  The government should take steps to boost the economy with tourism that will increase the business for the various employers making them want to pay more for minimum wage workers to service their business. 

All of the studies show that raising the minimum wage in the end, hurts rather than helps the group it was intended to benefit.  Case in point, in the USA the Congressional Budget Office stated that it would help raise 900,000 above the poverty line but put 1.4 million out of work.  All that plus higher prices for consumers including the poor who do buy groceries, clothes, hardware supplies, and gas and will now pay more for those items. 

Common sense tells you if minimum wage had no negative impacts why stop at 492 baht an hour.  Make it 10,000 baht an hour and let everyone live in luxury. 

https://abcnews.go.com/Politics/15-minimum-wage-cost-14-million-jobs-lift/story?id=75760612

[longwood50]

1 minute ago, Fluke said:

Yes, but the richer people spend more than the poorer people .

Fluke, 

Yes they "spend more" in total.  However the poor are the ones most impacted by the price increases.  The increase in grocery costs, gasoline costs, clothing costs, etc impact the working poor far more than the wealthy. 

The wealthy may earn 20 times the income of the working poor but they dont spend 20 times more on groceries, gas, clothing, electric, water,  So the impact of raising prices hurts them proportionate to their income far more. 

Again common sense tells if this was such a magic money tree with no negatives, don't stop at 492 baht per hour make it 10,000 baht per hour and let everyone live the life of luxury after all you believe that increasing worker wages will only be paid by those who have the upper incomes. 

[Fluke]

4 minutes ago, longwood50 said:

Fluke, 

Yes they "spend more" in total.  However the poor are the ones most impacted by the price increases.  The increase in grocery costs, gasoline costs, clothing costs, etc impact the working poor far more than the wealthy. 

The wealthy may earn 20 times the income of the working poor but they dont spend 20 times more on groceries, gas, clothing, electric, water,  So the impact of raising prices hurts them proportionate to their income far more. 

Again common sense tells if this was such a magic money tree with no negatives, don't stop at 492 baht per hour make it 10,000 baht per hour and let everyone live the life of luxury after all you believe that increasing worker wages will only be paid by those who have the upper incomes. 

Yes, you have to find the right balance between price increases and inflation and wages. 

[Guest1]

3 hours ago, Noble_Design said:

Are those field workers of Thai nationality or migrant workers? I believe minimum wage are only for Thai workers not migrant workers.

They would need to be legal, to be able to get minimum pay!

And even for Thai workers, minimum pay is only available for people, paying taxes, social insurances, are hired by the books.

Which is almost never happening in farm work. Or even in construction, aside the few "manager" positions! It is always cheaper, for the companies, to have an agreement with the Law-"enforcer"

[Cabra]

1 hour ago, longwood50 said:

This comment is just not sensical.  If raising the wages had NO NEGATIVE IMPACT why stop at 492 baht, why not 1,000 baht or 10,000 baht per hour.  

For every baht paid to a workers 'SOMEBODY" pays.  The employer is only a go between.  The employer is the one who gives the money to the worker but it is the employer's customers who provide the money so that the employer can pay the worker.  The employer "keeps" only the difference between the total amount that they sell, and the total amount of the costs incurred to sell it.  That is "profit"  Wages are costs.  There are only two ways that the wage increase can be dealt with.  The employer passes on those costs in the form of higher prices or the employer accepts a lower "profit"  

If it is the price increase, then everyone who buys Rich or Poor will pay more for the identical product or service leaving them with less to live on.  If it is the employer who bears some or all of the increase in wages then the employer earns less profit leaving them with less to live on.  The natural incentive is for the employer with higher wages to employ fewer people, reduce the hours of those working, and if possible automate to eliminate the jobs.  The higher the employee cost the greater the incentive on the employer to eliminate them.  

This is not a magic goose that lays golden eggs.  A higher minimum wage is merely income redistribution.  It takes from the employers and/or their customers and gives to the minimum wage earner.  That is a zero sum game given that in total the net effect is zero.  One group gets more, the other less. 

Those that are earning minimum wage should learn some skill to make them "worth" more.  The government should take steps to boost the economy with tourism that will increase the business for the various employers making them want to pay more for minimum wage workers to service their business. 

All of the studies show that raising the minimum wage in the end, hurts rather than helps the group it was intended to benefit.  Case in point, in the USA the Congressional Budget Office stated that it would help raise 900,000 above the poverty line but put 1.4 million out of work.  All that plus higher prices for consumers including the poor who do buy groceries, clothes, hardware supplies, and gas and will now pay more for those items. 

Common sense tells you if minimum wage had no negative impacts why stop at 492 baht an hour.  Make it 10,000 baht an hour and let everyone live in luxury. 

https://abcnews.go.com/Politics/15-minimum-wage-cost-14-million-jobs-lift/story?id=75760612

Raising the minimum wage is good for working poor Thai people making less than 340 baht per day. Its the right thing to do. I can't even follow you US centric rant  Do you live in Thailand? Are you afraid you will have to pay an extra 5 baht for the lunch next week? Another cheap Charlie? Too bad 

 

 

[longwood50]

47 minutes ago, Cabra said:

Raising the minimum wage is good for working poor Thai people making less than 340 baht per day. Its the right thing to do. I can't even follow you US centric rant  Do you live in Thailand? Are you afraid you will have to pay an extra 5 baht for the lunch next week? Another cheap Charlie? Too bad

It is you that are being nonsensical.  You seem to think that the extra money to the working poor is only paid by the Farangs and other wealthy.  Think again.  The working poor also buy groceries, cars, appliances, gas, rent, clothing, medicines etc.  The increased labor expense is PASSED ON to customers. 

If you want to help those at the bottom end of the economic ladder it is either through a direct subsidy from the government which takes tax money from some people and redistributes to those below the poverty rate. 

The way you do it, EVERYONE including those least able to afford the increase in prices gets hit with higher costs for everything you buy.  The minimum wage merely takes from one group those who pay, to give to another group the group that works. 

The add insult to injury use some common sense man.  If you own a business and the cost of lets say your rent goes up.  You look for a cheaper place to rent.  If you electric costs go up, you look for ways to reduce your electricity use.  If minimum wage causes you to pay your workers more, you look for ways to reduce the number of workers, and/or the number of hours they work.  SO YOU END UP HURTING EXACTLY THOSE YOU SAY YOU WANT TO HELP. 

The greater the savings to the employer the more incentive there is to get rid of that expense.  Also why don't the working poor try something novel to help themselves.  GET A SKILL THAT PAYS MORE.  A job is worth only so much and an electrician earns more than someone who picks fruit.  

 

 

[SteveM]

My wife has always said that not everyone gets the legal minimum wage. So, while I hope this helps some Thais, it won't matter to a lot of the cash economy workers.

[Fluke]

31 minutes ago, SteveM said:

My wife has always said that not everyone gets the legal minimum wage. So, while I hope this helps some Thais, it won't matter to a lot of the cash economy workers.

What does your Wife think about the minimum wage being increased ?