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

[Faz]

This topic is about the average daily wage increase in Thailand.
Debates about the average wages and economies in China, US, or Germany are off topic.

[Stonker]

2 hours ago, Cabra said:

But when you look at the number of Thai people that will actually benefit from this increase (who are now working for less than 495 baht per day -- outside of small children and farmer workers), the negative impact on Thailand's job growth and inflation are likely being largely overstated.

What you're missing is that you can't just put up wages for those at the bottom by 42%  -  do that and you not only lose differentials but you end up paying those at the bottom more than those further up the pay scale, who are now going to be earning less than them.

Put up wages at the bottom by that amount, and you have to put everyone's up or it's not worth anyone's while to produce more or be better trained and qualified.

[Stonker]

2 hours ago, Cabra said:

What has been completely absent from this thread is actual use cases, data and information from ASEAN countries (e.g., historical and current with respect to inflation, real wages, unemployment, job growth, etc.).

How can there be any data when no one has ever put up the minimum wage by 42% in one go, or anything remotely like it???

[jaco]

Actually in 2012 the minimum wage went from 210 to 300 Baht per day, a 42.8% increase in that one year.

[longwood50]

4 hours ago, oldschooler said:

. UK Socialists also believe that jobs won’t disappear when govt. min wage increased… because “businesses can afford it “but none of them ever had a real business or job ….

Certainly most politicians and many liberals believe that somehow that you can just waive a magic wand, pass a law and all of life's problems will be solved.  The best assistance for all workers, low, medium and high paying employees is a good economy and strong businesses.  Cripple them with high taxes, burdensome regulation, and wage and hour laws and they find it difficult to compete.  The company you mentioned Steelcase use to employ over 10,000 people in Grand Rapids, now down to only 3,500 despite being a bigger company.  Why? Because the cost of labor in the USA particularly in Michigan makes selling office furniture uncompetitive with overseas manufacturers.  It is not just the hourly rate.  It is the mandated healthcare, family parental leave, sick days, workers compensation, unemployment compensation premiums etc.  

We can dig coal in the USA, ship it to China 7,500 KM away and have it come back in steel products at less cost than if the products were made it the USA.  Now that is nuts.  Who is hurt?  The office furniture employee, the car maker, the steel worker.  All an effort to "help" the workers has ended up costing them jobs.  Now in the USA there is a barbell as the middle class is evaporating.  There are the menial workers and the wealthy.  The middle class which use to be made up of good paying manufacturing jobs has been gutted.  That has happened in large part because USA work rules makes those employees so expensive.  

The best way to have good wages is to have an employer making so much money they want to expand and they need more workers.  Hurt them with higher taxes, insurance, mandatory wages and work rules and at best they don't expand, at worse they close and move to another country. 

[Cabra]

1 hour ago, Stonker said:

How can there be any data when no one has ever put up the minimum wage by 42% in one go, or anything remotely like it???

Wrong again. 2012 the minimum wage went from 210 to 300 Baht per day, a 42.8% increase.

[Cabra]

1 hour ago, Stonker said:

What you're missing is that you can't just put up wages for those at the bottom by 42%  -  do that and you not only lose differentials but you end up paying those at the bottom more than those further up the pay scale, who are now going to be earning less than them.

Put up wages at the bottom by that amount, and you have to put everyone's up or it's not worth anyone's while to produce more or be better trained and qualified.

There are less people at the bottom than you think. 

[dj230]

Minimum wage is an interesting topic, never studied economics but if they raise minimum wage, what happens to the rest of the wages up the ladder? If business' have to pay more wages, do they increase prices and cause inflation? If inflation occurs, how does the minimum wage increase end up having a net positive effect on ones financial situation?

 

[Stardust]

5 hours ago, Cabra said:

Thailand has had minimum wage laws on the books since the 70s. They have done far more good than harm contrary to what the Western biased arguments presented in this thread purport

Also it is unbelievable they claim they know something about economy and are coming with examples from America as prove for their claims in Thailand. How absurd and shows they even have no knowledge about the differences of the economies. And absurd is their calculations from the usa while we are talking about a few hundred baht. What they are writing have zero substance and for sure not any knowledge about the economy in Thailand or any realities. You can give them even links for datas from the worldbank about the differences in the economies even then they cannot understand it but claiming something as they know something about economy or management.

[Stonker]

49 minutes ago, Cabra said:

Wrong again. 2012 the minimum wage went from 210 to 300 Baht per day, a 42.8% increase.

It would probably be a good idea to check your sources before telling someone "wrong again".

The increase in 2012, which as you can see was strongly against industry advice and led to all the problems anticipated here, was from 239 baht to 300 - an increase of just under 26%.

https://www.bangkokpost.com/learning/advanced/278162/300-baht-minimum-daily-wage

https://www.pier.or.th/en/abridged/2016/11/

 

[Stonker]

26 minutes ago, Cabra said:

There are less people at the bottom than you think. 

You don't seem to understand what I'm referring to by 'wage differentials'.

https://www.dictionary.com/browse/wage-differential#:~:text=the difference in wages between,in different industries or localities

However many there are "at the bottom", if you put up wages for those "at the bottom" then unless you do so for the rest there's no incentive for those not "at the bottom" to be more productive, trained, skilled or responsible.

The wage increase may taper off as it goes up the chain, as it usually does, but unless there is one why would anyone want to be more skilled, and waste time being trained and qualified, when they're no better off?

If those "at the bottom" get a 42% pay rise, do you seriously think those who've been paid more because they're more skilled and more productive will be happy when they're on the same pay band?

Seriously ?

[Marc26]

6 hours ago, Cabra said:

Thailand has had minimum wage laws on the books since the 70s. They have done far more good than harm contrary to what the Western biased arguments presented in this thread purport

Has it ever jumped 40+%?

[Faz]

A post containing an image without any comment or link has been removed in breach of FG's.
Please read and follow the FG's.

[astro]

1 hour ago, dj230 said:

Minimum wage is an interesting topic, never studied economics but if they raise minimum wage, what happens to the rest of the wages up the ladder? If business' have to pay more wages, do they increase prices and cause inflation? If inflation occurs, how does the minimum wage increase end up having a net positive effect on ones financial situation?

Yes, prices will go up, but since the min. wage increase only applies to a small portion of workers, not at the same rate. There should still be a net increase in purchasing power

[astro]

BTW, I am not up to date with it, but minimum wages used to be regionally adjusted, so it would be less in, say Phrae than Bangkok. So, difficult to talk about absolute percentages in increase.

 

In Nan, where I used to live, it took several years for farm labor wages to climb up to the minimum 270 or so after it (the "300") was legislated. As I indicated earlier, IMO the steps in increase are unrealistically high.

Edited February 14, 2022 by astro

[dj230]

54 minutes ago, astro said:

Yes, prices will go up, but since the min. wage increase only applies to a small portion of workers, not at the same rate. There should still be a net increase in purchasing power

Net increase in purchasing power to those in the minimum wage group? and everyone else gets a net decrease in purchasing power?

[Stonker]

1 hour ago, Marc26 said:

Has it ever jumped 40+%?

Despite the claims here - no.

As detailed in the links I gave above, the biggest jump was 25% after it had been stagnant for a period, from 239 to 300 baht. The detailed economic analysis of that particular  increase was that it was a failure and made things worse for the poor it was intended to benefit not better (I'll give a link tomorrow).

[Stonker]

1 hour ago, astro said:

Yes, prices will go up, but since the min. wage increase only applies to a small portion of workers, not at the same rate. There should still be a net increase in purchasing power

The problem is that this is a fallacy - you can't just increase pay for "a small portion of workers" as you're raising their pay to that of the next level up.

Why would the next level up be happy to be paid the same as those who are less skilled and less productive?

[astro]

2 hours ago, Stonker said:

The wage increase may taper off as it goes up the chain

As you said yourself, the increase for the better earners would be less, so, a net gain for the minimum earners.

[astro]

1 hour ago, dj230 said:

Net increase in purchasing power to those in the minimum wage group? and everyone else gets a net decrease in purchasing power?

In percentage wage increases, it's less, yes.

In real terms, a, for example, 10% increase on 2000 Bt is more money than 40% on 300 Bt.

Edited February 14, 2022 by astro

[Marc26]

30 minutes ago, Stonker said:

Despite the claims here - no.

As detailed in the links I gave above, the biggest jump was 25% after it had been stagnant for a period, from 239 to 300 baht. The detailed economic analysis of that particular  increase was that it was a failure and made things worse for the poor it was intended to benefit not better (I'll give a link tomorrow).

I do remember when it went to 300 baht

 

My wife is always complaining about prices, so can't recall the impact..... 5555

[Stonker]

4 minutes ago, astro said:

As you said yourself, the increase for the better earners would be less, so, a net gain for the minimum earners.

Yes, a "net gain for the minimum earners" but not much use if they're priced out of a job and they go from being a minimum earner to not earning at all!

If salaries are low you employ people to do menial jobs; once they get too high, it's cheaper to automate them or buy equipment - 20 men vs one JCB, etc.

[Marc26]

For a little comedic relief in this thread

 

My wife said that prices have risen so much in Thailand and my stepson is "Mai Im"(not full) with the monthly allowance he gets to live at University

 

I responded............."That motherfcuker has gained 25kg's in Uni, I think he can be a bit hungry sometimes!" :)

 

My wife did not find that funny.............(even though she has been on him about his weight)

[dj230]

12 minutes ago, astro said:

In percentage wage increases, it's less, yes.

In real terms, a, for example, 10% increase on 2000 Bt is more money than 40% on 300 Bt.

Not following too well, but from my experience, the increase in inflation usually out paces any minimum wage increase, that being said, I have no clue whether the inflationary pressure was caused solely by minimum wage increases.

I haven't lived long enough or studied economics to understand it completely, I just wonder whether it will actually benefit those working minimum wage in Thailand. I know a few people working minimum wage in Thailand, most can't afford to live in Bangkok. If prices for goods / expenses go higher I wonder how that will affect those just barely able to afford living in Bangkok (those not making minimum wage). 

Will be interesting to see this play out, also curious how will affect prices for expats, to be quite honest, some prices in Bangkok were a huge shocker to me, I was expecting most, if not all goods/expenses to be cheaper in Bangkok compared to Toronto, but many things are the same or even more expensive. 

[astro]

26 minutes ago, Stonker said:

Yes, a "net gain for the minimum earners" but not much use if they're priced out of a job and they go from being a minimum earner to not earning at all!

If salaries are low you employ people to do menial jobs; once they get too high, it's cheaper to automate them or buy equipment - 20 men vs one JCB, etc.

The question is, where that breaking point is.

In Western industrialised nations, we are well past that point.

Despite all the doomssaying and whining from employers, unenployment figures and inflation have not risen to end the world as we know it. lol

As a loony lefty, I was happy when minimum wage was introduced in Germany, even more so as I have profited myself, as I am working in a low-wage occupation. lol

Unemployment hasn't risen, inflation only gained speed since COVID arrived...

 

Looking forward to your link later.