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

[astro]

38 minutes ago, longwood50 said:

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.  

These are arguments often brought forward before the introduction of minimum wages or a proposed rise of those.

Businesses look for ways to reduce costs anyway, all the time. The easiest often is to find workers who'll work for less. Classic capitalism, plenty of examples in history, that's how the sytem works.

Minimum wage is a safeguard against exploitation.

An increase in minimum wage is also an incentive to further training for businesses, so they get more skills and value rather than using disposable unskilled labor.

[longwood50]

9 minutes ago, astro said:

Businesses look for ways to reduce costs anyway, all the time.

Yes businesses look for ways to reduce cost all the time.  That is how capitalism works.  If a business did not attempt to run as efficiently as possible its competitors would and that business goes bankrupt. 

However if I run a business and my cost of insurance goes up lets say from $10,000 to $10,500 I don't spend a huge amount of time looking at how to "save" $500.

However if my labor costs which typically run for most businesses between 20% and 25% of total costs go up as suggested 46% I now have a HUGE INCENTIVE to look for ways to get rid of employees or cut their hours.  The greater the amount saved, the greater the amount saved, and the greater the effort on the part of the business to eliminate them. 

This is Thailand already and what happens when businesses find a way to save money 

The lower the wage the less incentive a business has to spend the amount to automate.  However if the savings is enough, they will invest in ways to eliminate the worker. 

You want to "help" the worker, fine.  Have the government provide some form of food, or wage assistance.  You want to make the worker unemployed, raise the wage high enough that the business will reduce as many of them as possible. 
 

 

[joseph]

Do any of you have BOI experience in Thailand? Working in the manufacturing sector in Thailand for 30 + years I understand most of the arguments. Employer will not take a hit on forecasted profit. BOI will not allow it. The biggest change I see is the increase is across the board, not by the 5 geo-economic areas. I seriously doubt there will be any disproportionate swing in economics.       

 

[Fluke]

13 minutes ago, longwood50 said:

Yes businesses look for ways to reduce cost all the time.  That is how capitalism works.  If a business did not attempt to run as efficiently as possible its competitors would and that business goes bankrupt. 

However if I run a business and my cost of insurance goes up lets say from $10,000 to $10,500 I don't spend a huge amount of time looking at how to "save" $500.

However if my labor costs which typically run for most businesses between 20% and 25% of total costs go up as suggested 46% I now have a HUGE INCENTIVE to look for ways to get rid of employees or cut their hours.  The greater the amount saved, the greater the amount saved, and the greater the effort on the part of the business to eliminate them. 

This is Thailand already and what happens when businesses find a way to save money 

The lower the wage the less incentive a business has to spend the amount to automate.  However if the savings is enough, they will invest in ways to eliminate the worker. 

You want to "help" the worker, fine.  Have the government provide some form of food, or wage assistance.  You want to make the worker unemployed, raise the wage high enough that the business will reduce as many of them as possible. 

 

If your business can lose some employees and it has no effect on productivity , then when are you employing them ?

   If not having them wouldn't effect your business , you should have let them go along time ago .

If you pay them a better wage , they may work a bit harder and try a bit . 

From what I've heard, if you pay someone minimum wage , you wont get much work out of them

[Cabra]

1 hour ago, longwood50 said:

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.  

If your supply and demand based arguments actually worked we would have no need for these other alternatives (min.wage, tax schemes, etc.). It's an imperfect ecosystem. Unfortunately, greed, and employers exploiting cheap labor, push these laws into existence to protect unkillled labor from being exploited further. And the wage baselines, out of necessity, get recalibrated periodically (and not often) because employers continue to exploit cheap labor. And the debate for and against rages on...

[Guest1]

2 hours 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.

Of course not. Like with the covid 19 relief money, ONLY  workers hire under the social security system are getting minimum the minimum wages. 

And looking, how few that have been, include the people earning more as minimum wages, that leaves more out, as it includes!

[longwood50]

55 minutes ago, Fluke said:

From what I've heard, if you pay someone minimum wage , you wont get much work out of them

Fluke,

When you purchase a home or a car or a refrigerator the value of it is determined by two people the seller and the buyer. 

The same is true of what a job is worth.  The employer is willing to pay a certain amount, and the employee has the ability to either work for that amount or to seek employment elsewhere at a job that pays more. 

You are supplanting your "opinion" for what the job is worth for the person who is willing to work for that amount.  If that person was "worth" more they should be able to go elsewhere to command that additional money.  If they can't receive more, then the wage offered is fair. 

While I agree that it is impossible to not feel empathy towards those who earn a minimal amount, raising the minimum wage can only hurt not help those people.  You also forget that while the person receiving the higher minimum wage is helped, the employer who also may be struggling will  be hurt, and if the prices go up the customers of that employer will also be hurt ( and that includes other low income people)   So all you accomplished is taking from one to give to another.  

I also suggest that it is not just the employer that should be scrutinized.  If the worker does nothing to improve his/her value by acquiring skills that make them worth more, they should bear the consequences of their inaction.  Many people go back to school, go to trade school, etc to improve their value.  So don't give them a pass allowing them to do nothing to earn that higher pay. 

If minimum wage had zero negative effects then we should all command that employers all pay a minimum of 300,000 baht a month.  After all at that rate the employer according to you would get much higher productivity, prices would not go up, and the employer would not try to reduce or eliminate the number of employees.  POPPYCOCK.  

From personal experience, I owned a trucking delivery company.  The government mandated a huge increase in workers compensation insurance to cover those workers in the event of an accident.  What was the impact.  The trucking companies converted into businesses that had no truck drivers as employees.  They offered deliveries up for bid to "independent truck drivers" who had to now buy their own trucks, pay for their own insurance and were not covered by workers compensation.  Who were these independents.  Well they were the same employees who now found they could no longer find jobs at trucking companies as employees.  

This is what is known as the law of unintended consequences and I will guarantee that a higher minimum wage while well intentioned will in the end hurt the low income worker. 

[longwood50]

43 minutes ago, Cabra said:

Unfortunately, greed, and employers exploiting cheap labor

What is "greed" is that when you get a bid on someone working on your home, and you want the lowest price.  Or is it "greed" when you negotiate to sell your car or home and you want to sell it for more than what the willing buyer is willing to pay?

There is low income wages strictly because there is a supply of people willing to work for a specific wage.  That is not exploitation, that is paying "market rate"  If the workers was truly worth more, they should be able to go to an alternative employer and command that higher rate. 

The rate remains low because of the law of supply and demand.  There is a supply of people willing to work at low rates greater than the demand for those workers.  The only way to eliminate that is not by mandating what the wage should be, but to improve the economy to the point where companies have to bid up wages for scarce employees.  With the Thai economy in a dismal state raising the minimum wage just is nailing another nail in the coffin of the struggling businesses here trying to hang on. 

If those people at the bottom of the economic scale require assistance, it should come through government programs to assist them not higher minimum wage.  The minimum wage is just a convenient fall guy that theoretically passes the higher cost, with the illusion that there is no negatives to it.  

The cost of an employee is no different than the cost of gasoline.  The higher the cost of gas, the more it drives customers to move to electric cars to escape the high gas cost.  The higher the minimum wage the more the employer will seek to reduce or eliminate as much of that higher priced labor as they can.  It will foster black market laborers willing to work for cash and hurt the legitimate worker. It will increase the incentive on businesses to make capital investments in automation that eliminates the worker entirely. 

[Cabra]

22 minutes ago, longwood50 said:

What is "greed" is that when you get a bid on someone working on your home, and you want the lowest price.  Or is it "greed" when you negotiate to sell your car or home and you want to sell it for more than what the willing buyer is willing to pay?

There is low income wages strictly because there is a supply of people willing to work for a specific wage.  That is not exploitation, that is paying "market rate"  If the workers was truly worth more, they should be able to go to an alternative employer and command that higher rate. 

The rate remains low because of the law of supply and demand.  There is a supply of people willing to work at low rates greater than the demand for those workers.  The only way to eliminate that is not by mandating what the wage should be, but to improve the economy to the point where companies have to bid up wages for scarce employees.  With the Thai economy in a dismal state raising the minimum wage just is nailing another nail in the coffin of the struggling businesses here trying to hang on. 

If those people at the bottom of the economic scale require assistance, it should come through government programs to assist them not higher minimum wage.  The minimum wage is just a convenient fall guy that theoretically passes the higher cost, with the illusion that there is no negatives to it.  

The cost of an employee is no different than the cost of gasoline.  The higher the cost of gas, the more it drives customers to move to electric cars to escape the high gas cost.  The higher the minimum wage the more the employer will seek to reduce or eliminate as much of that higher priced labor as they can.  It will foster black market laborers willing to work for cash and hurt the legitimate worker. It will increase the incentive on businesses to make capital investments in automation that eliminates the worker entirely. 

Unfortunately for you, no one is buying the failed supply and demand arguments anymore as it pertains to fair (the opposite of greedy, btw) wage practices, and the minimum wage laws are in full effect, and have been for quite some time. We're done here. Good day.

[joseph]

If supply and demand are dead why am I constantly having to reduce cost to compete with China. I have lost 45% of original production to China. I survive by redesign, redirecting labor and reducing material cost. The Chinese copy with substandard material. Their idea of R & D is Ripp off and Duplicate. 

 

[HiuMak]

great news to prevent labour exploitation

[BigHewer]

19 hours ago, longwood50 said:

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. 

Brilliant post. I wanted to quote the whole thing, but it was a tad long. Actually, it could have been longer as there is so much more to talk about in regards to the detrimental effect of minimum wage hikes. 

Minimum wage should be a safety net only. The moment either a) it exceeds the median market wage or b) the cash economy gets around it, it results in even more inequality than if it wasn’t imposed.

It looks pretty in print and gets people excited, but ultimately it’s just a ploy to gain popular support.

 

 

[Grumpyoldman]

21 hours ago, longwood50 said:

 You help one group of people at the expense of others. 

Exactly..... its how you ultimately create a stronger economy and a better standard of living where everyone has enough money to live comfortably.

[Grumpyoldman]

21 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 

Spot on @fluke. Too many moaners on here as usual.

[Grumpyoldman]

17 hours ago, longwood50 said:

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. 

 

I disagree. Many people are already on a wage in excess of the minimum and so those businesses will feel little impact. That means their prices to the end consumer will not be affected as much as may be thought. So whilst some prices may rise, it won't be across the board.

 

Its also about standards of living. Levelling up is the phrase of the day in the UK and it needs to happen in Thailand.

[AussieBob]

22 hours 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. 

Yep - all about 'buying' votes by the Junta - they are obviously worried and so they should be.

All that this will lead to is price increases, reduced employment opportunities, and more illegal/imported workers.  But the Junta cares not one bit - they want to buy votes. Just the beginning I reckon. 

[Benroon]

21 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

So report them or get a Thai to do it - there are numerous articles on employers picking up hefty fines for not complying. What do they get paid ?

[Benroon]

31 minutes ago, AussieBob said:

Yep - all about 'buying' votes by the Junta - they are obviously worried and so they should be.

All that this will lead to is price increases, reduced employment opportunities, and more illegal/imported workers.  But the Junta cares not one bit - they want to buy votes. Just the beginning I reckon. 

Yep lets keep everyone poor so the rich can save a couple of baht.

[AussieBob]

48 minutes ago, Benroon said:

Yep lets keep everyone poor so the rich can save a couple of baht.

Simplistic ideology that has always eventually failed - socialism.  Appeals particularly to the young and naïve.  

Dont get me wrong, I agree that Thai employers should not be getting away with as much as they do with the low pay and poor conditions they provide  (including kickbacks and payments). But the answer is not to implement a 'western' style solution in the Thai 'system'. Those same Thai employers will just remove the Thai staff and employ imported workers who dont get social welfare - the system is not like in the west.  But definitely dont change it to the west - that is why everything costs so much in the west - the total costs of workers (not just the high salaries - it is all the other additional costs). The Unions are always complaining about Aussies not being employed in industries that are dominated by backpackers and other imported workers - but who can afford to pay someone $40,000+ a year (plus all the other costs) for someone to pick bananas or serve beers. 

[Stardust]

6 minutes ago, AussieBob said:

Simplistic ideology that has always eventually failed - socialism.  Appeals particularly to the young and naïve.  

Dont get me wrong, I agree that Thai employers should not be getting away with as much as they do with the low pay and poor conditions they provide  (including kickbacks and payments). But the answer is not to implement a 'western' style solution in the Thai 'system'. Those same Thai employers will just remove the Thai staff and employ imported workers who dont get social welfare - the system is not like in the west.  But definitely dont change it to the west - that is why everything costs so much in the west - the total costs of workers (not just the high salaries - it is all the other additional costs). The Unions are always complaining about Aussies not being employed in industries that are dominated by backpackers and other imported workers - but who can afford to pay someone $40,000+ a year (plus all the other costs) for someone to pick bananas or serve beers. 

Yes but not forget the so called comunist countries have the lowest wages in the world and the developed countries and with the highest gdp the highest wages. Their incomes are very important for the economy. In ccp China the majority have to survive with a monthly income under 160 usd per month but rents and prices are high. Democratic countries have the highest wages and this is important for their domestic economy and development. And for sure it is possible to pay more than 300 baht for sombody who just carry beer bottles or serve beer as it is possible in developed democratic countries, because they are also a part of the chain to run a company, restaurant or construction side etc.

[Stardust]

26 minutes ago, AussieBob said:

Simplistic ideology that has always eventually failed - socialism.  Appeals particularly to the young and naïve.  

Dont get me wrong, I agree that Thai employers should not be getting away with as much as they do with the low pay and poor conditions they provide  (including kickbacks and payments). But the answer is not to implement a 'western' style solution in the Thai 'system'. Those same Thai employers will just remove the Thai staff and employ imported workers who dont get social welfare - the system is not like in the west.  But definitely dont change it to the west - that is why everything costs so much in the west - the total costs of workers (not just the high salaries - it is all the other additional costs). The Unions are always complaining about Aussies not being employed in industries that are dominated by backpackers and other imported workers - but who can afford to pay someone $40,000+ a year (plus all the other costs) for someone to pick bananas or serve beers. 

But for sure in all other points I agree with you, also why they come up with that now. And there must be minimum wages for all including the migrants. Exploit the poor cannot be legal because otherwise they will also use child work or forced labour ( like in ccp China).

[poohy]

1 hour ago, Benroon said:

So report them or get a Thai to do it - there are numerous articles on employers picking up hefty fines for not complying. What do they get paid ?

Companies maybe local family farms/ businesses no

Ha ha ha like i am going grass up small family farms or tell another local Thai to to it

i like where i live and i dont work on the fields so not going to upset any apple carts

like i said i guy gets paid 220 thb

[longwood50]

2 hours ago, Grumpyoldman said:

disagree. Many people are already on a wage in excess of the minimum and so those businesses will feel little impact. That means their prices to the end consumer will not be affected as much as may be thought. So whilst some prices may rise, it won't be across the board.

Your answer is nonsensical.  If the people are already above minimum wage, this law has no effect, none, zero.  So using this as an argument is just lunacy.   

I don't know if you have ever run a business but I have owned four.  Every item whether that is rent, electricity, water, insurance, taxes, and most importantly employee cost has to be covered before the owner makes a profit.  If any of those expenses goes up the owner has only two choices,  raise his/her prices to offset it, meaning the customers pay it.  Or the owner accepts less profit. 

In the first instance the shopper now at Makro, Tesco, or the local hardware store who has employees now pays higher prices.  Those higher prices take money from them which the store now pays to the employee with higher wages.  A zero sum game.  Those shoppers include yes some wealthy but they include everyone. So all you are doing is robbing from one, to give to another. 

Now if the employer does not pass those costs along, they are the ones who are robbed to pay the employee.  The employer losing profits will search for ways to reduce the need for the number of employees and or the number of hours.  That hurts the very people you say you want to help.  Even if the hours or number of employees is not impacted the reduced profit gives the employer less money to expand to potentially hire more employees. At the very least it reduces the incentive to expand since it is less profitable. It may even push the employer over the edge into not being able to make a sufficient profit to warrant being in business and close.  That is hardly good for the low wage employee. 

If people wish to supplement the income of low wage workers fine.  Things like food subsidies that Thailand has already done are the way.  The minimum wage is a terrible way it hurts the very people it is intended to help. 

The minimum wage is governments way of illusion trying to convince people which obviously it has done to you that it is a free way to help those at the bottom of the income ladder.  Sorry, wage costs are an expense and somebody pays for them. 

[longwood50]

2 hours ago, Grumpyoldman said:

Exactly..... its how you ultimately create a stronger economy and a better standard of living where everyone has enough money to live comfortably.

You forget that those at the bottom end of the income ladder are also consumers.  So when that employer raises prices it is not just the wealthy that are impacted everyone who buys groceries, gas, rent, hardware, etc pay more too.  So you help one group of minimum wage workers and you hurt the local vendor at the market who works selling bananas, shirts, or Pad Thai and who is likely not earning minimum wage when they go to buy their necessities. 

This idea that somehow government can just mandate equity is nothing more than a different flavor of communism.  If the government believes that these people need help it should expand the subsidy programs such as 50/50 meals, or reduced utility costs etc.  
Passing this "social equity" mindset to employers will hurt the very people intended to help. 

I can tell you when employee costs rise, the employer has a greater need to eliminate them.  Case in point are the U.S. unions who drove up wage costs to the point that manufacturers just moved their plants.  First to other states that were lower cost and in some cases to other countries.  

So here in Thailand if a company has minimum wage employees who now cost 46% more than before and that company can move its operation to Vietnam or Cambodia and save money, guess what it will.  Then that poor Thai minimum wage worker goes from minimum wage to having no job.  Not a good trade off. 

 

[Stardust]

5 minutes ago, longwood50 said:

Your answer is nonsensical.  If the people are already above minimum wage, this law has no effect, none, zero.  So using this as an argument is just lunacy.   

I don't know if you have ever run a business but I have owned four.  Every item whether that is rent, electricity, water, insurance, taxes, and most importantly employee cost has to be covered before the owner makes a profit.  If any of those expenses goes up the owner has only two choices,  raise his/her prices to offset it, meaning the customers pay it.  Or the owner accepts less profit. 

In the first instance the shopper now at Makro, Tesco, or the local hardware store who has employees now pays higher prices.  Those higher prices take money from them which the store now pays to the employee with higher wages.  A zero sum game.  Those shoppers include yes some wealthy but they include everyone. So all you are doing is robbing from one, to give to another. 

Now if the employer does not pass those costs along, they are the ones who are robbed to pay the employee.  The employer losing profits will search for ways to reduce the need for the number of employees and or the number of hours.  That hurts the very people you say you want to help.  Even if the hours or number of employees is not impacted the reduced profit gives the employer less money to expand to potentially hire more employees. At the very least it reduces the incentive to expand since it is less profitable. It may even push the employer over the edge into not being able to make a sufficient profit to warrant being in business and close.  That is hardly good for the low wage employee. 

If people wish to supplement the income of low wage workers fine.  Things like food subsidies that Thailand has already done are the way.  The minimum wage is a terrible way it hurts the very people it is intended to help. 

The minimum wage is governments way of illusion trying to convince people which obviously it has done to you that it is a free way to help those at the bottom of the income ladder.  Sorry, wage costs are an expense and somebody pays for them. 

So you think to work under 300 baht the whole day ( mostly 12 hours) should be legal? Then you also can come up child work should be legal ! Exploiting the weaker ones should be never legal. Did you ever learned something about morals? For sure they will find children or parents who let their children work or find people in a weak position and let them work the whole day for 100 baht and for sure prices will be lower with forced labour or slave workers. Sure there must be protection for the weaker ones including the children. To exploit them cannot be legal. There must be red lines and morals or a society will not work.