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

[Benroon]

On 2/21/2022 at 9:39 AM, longwood50 said:

I doubt that you have ever owned a business, had to sell a product against competitors or hired an employee.  I have both managed a large department for a major USA bank and owned and ran four businesses.  Whether Thailand, the UK, Germany, or the USA or anyplace else on earth.  COSTS MATTER.  If they didn't you would not see companies relocate to other countries to reduce the operating costs including labor. 

Now I will ask you a simple question, see if you can answer. 

You have a restaurant in the UK and you pay your servers minimum wage approximately 10 Euro per hour.  The government mandates a 46% increase to $14.60 per hour.  Now what are you going to do to recoup the loss to profits? 

You have a restaurant here in Thailand and you pay your servers minimum wage of 332 baht per hour.  The government mandates a 46% increase to 492 baht per hour.  Now what are you going to do to recoup the loss to profits? 

I seriously doubt you can come up with how these two business people treat the prospect of higher costs any differently.  

There are only three solutions and/or some combination of them.  1) reduce staff or staffing hours  2) accept lower profits  3) raise prices. 

If you reduce staff or hours it hardly benefits those who you intend to "help" with raising the minimum wage. If the owner accepts lower profits you are assuming that the owner already is making a substantial profit and can absorb the loss and still have the financial incentive to remain in business. If you pass the cost on to the consumer, you help the server, hurt the customer.  Plus the higher the cost of the food, the less inclanation people have to dine out.  The lower customer traffic results in both less profit for the business owner and further reduces the need for minimum wage help. 

IMPROVE THE SKILLS OF THOSE WORKERS DON'T DUMP THE PROBLEM OF LOW WAGES ON THE EMPLOYERS. 

 

Of course costs matter and productivity doesn't ?

You're just plain wrong plus and with respect bereft of any vision if after ownership of four companies you see staff as a liability. In the scenarios you gave me? run promotions? review suppliers? review premises? offer home delivery? change your hours ? a myriad of options (it is patently absurd to say there are just three, you meant only three you can think of) rather than throw in the towel in a hissy fit because it has been mandated you have to treat your staff as human beings. However all the answers to your questions are clearly in my previous post - you just don't want to read them. Higher wages does not need to translate to lower profits, but I've already stated why. I can only lead the horse to water. Even if you don't have vision if higher costs come expand roles, add tasks, look at efficiencies, explain to staff you're facing those costs, treat them as humans and they will respond well in my experience (it's better than redundancy after all) 

I absolutely refuse to believe you ran anything (successfully) if you cannot see that a well provided for workforce is a more productive one. Guess what increased production brings ??? - increased profits .....absolutely elementary stuff.

Higher wages does not necessarily mean less profit in the long run - however to a poor boss without the capability to see the bigger picture it probably will end that way. Even having said that have you got instances of industry where a minimum wage has caused widespread job losses ? Industry chiefs always wail from the rooftops and then when the tears subside get on with it as their employment armageddon predictions come to nothing.

So you asked and thats fair - I owned my own IT consultancy after spending my life in it working for others, in the 9 years I had it NO-ONE left the company, and EVERYONE was on an above average industry wage for their skill set else you are constantly recruiting. Each placement would cost me upwards of £10k so taking care of them wasn't a nicety, it was a necessity! (They also nearly all went home half drunk at my expense every Friday after work). If anyone had to work late their meals were paid for and everyone got a taxi home at my expense as I didn't want anyone driving home tired and a taxi back in. That was all from my profit. But I viewed it as an investment not a drain.

Did paying everyone well and spoiling the staff rotten work ? Well I retired very early on the proceeds and have a life I couldn't have dreamed of when I left school and keep in touch with many of the staff I employed. 

I got my ethos after working for a fund management company started by a guy who went onto become a chief government advisor and in the 19 years I worked for his company I can count on one hand the people who left as well. A fantastic company that went under because having become extremely successful it was bought by a UK bank who came in with jumped up self important, but ultimately clueless management with a them and us culture, a little like you have, and within 12 months the business, brand and goodwill was gone, dead ! Absenteeism rocketed as it became just a job, costs presumably went through the roof, good people soon left to go to places where they would be respected for the good people they were and after being sold on a couple more times, it folded! We were all on great salaries and exceptional working conditions until poor management got involved and looked at industry averages and decided we were overpaid. I think the last point was it was outsourced to India to save money, paying people there crap wages, and undercutting the good guys that took it to where it was. I hear outsourcing which was once the darling of the IT industry by management who thought it was a genius move is firmly on the backfoot as the loss of customer goodwill outstripped the savings.

Take your staff with you else you will forever be pushing water uphill! 

You've dodged quite a few questions, well all of them actually but specifically still not mentioned where the budget is for retraining a few million rice pickers and where the demand will be for their newly found skills, or what those skills are likely to be, when millions of them flood the markets. You know all basic business stuff.

[Benroon]

On 2/22/2022 at 4:17 AM, Stonker said:

As I'm guessing that I'm the "one person" who you think @longwood50 "managed to fool" I checked his stats. maybe you should have done the same.

Eh ? Sorry I don't spend all day on here amassing 5k posts and can't keep a running total - at the time it was correct. Apologies

That was a direct quote from the first entry for a Google search for 'youth employment rate UK', taken from the House of Commons Library last week.

https://researchbriefings.files.parliament.uk/documents/SN05871/SN05871.pdf

and ? Statistics and all that - there's nothing wrong with the quote but it lacked context. You're usually dismissive of anyone using google - odd that.

 

[longwood50]

13 hours ago, Benroon said:

Of course costs matter and productivity doesn't ?

You're just plain wrong plus and with respect bereft of any vision if after ownership of four companies you see staff as a liability. In the scenarios you gave me? run promotions? review suppliers? review premises? offer home delivery? change your hours ? a myriad of options

1. There is no "productivity" increase with just raising a wage. 
2. All of the items you listed such as run promotions etc were there before any minimum wage increase.  What you are suggesting is that the business is so poorly run leaving untapped ways to increase profits.  
3. Whether you like it or not, business does not exist "to make lives comfortable" for the employees.  If they are "worth more" they should be able to go elsewhere where the employer recognizes their worth and pays them accordingly.  If they can not get more money elsewhere then they are paid fairly.  Just like selling your home.  It is worth, only as much as the buyer willing to pay the most will pay. 
4. I don't suggest the employers retrain, I suggested the government not dump the problem of low wages on the employers but rather assist low income people gain skills. 
5. In terms of automation.  I might say the cost of buying the mechanized equipment is not worth it since I can hire people at 342 baht per day so the equipment will not save enough to warrant that.  At 492 baht the calculation might be different. You already have restaurants in Bangkok using robots as servers "to save money"
6. The more unskilled, the more the person is at risk.  Jobs such as checkout cashier, gas station attendant, car wash, rice planting, rubber harvesting etc.  All of those can and will be mechanized "if the cost of labor becomes too high"

Already Thailand has the highest rate of "unskilled" labor in Asia.  You will never, I repeat never garner prosperity by having a work force only capable of the most routine tasks.  When Thailand's minimum wage rate exceeds that of other countries, garment manufacturing, rice harvesting, rubber exports, furniture manufacturing etc. all migrate to where the costs are the lowest assuming no difference in skills.  They have to otherwise their competitors will and they will be put out of business. 

If minimum wage is such a panacea for curing the poor, why stop at 492 baht per day.  Why not 1,000 or 10,000 after all according to you those additional costs can just be magically absorbed by better management. Poppycock.

I too want to help people have better lives.  The answer is not to mandate what an employer must pay but to elevate the worker to a job that pays more. 

https://www.thailand-business-news.com/asean/52226-83-5-per-cent-workforce-thailand-unskilled




 

[Stonker]

On 2/25/2022 at 10:53 PM, Benroon said:

(snip) ... at the time it was correct. Apologies

No, it wasn't correct at the time - it hasn't been true for over twenty years as the links I gave show very clearly.

[Stonker]

On 2/25/2022 at 10:53 PM, Benroon said:

Even having said that have you got instances of industry where a minimum wage has caused widespread job losses?

They're in the articles I linked to, some of which are specific to Thailand, and the effects on the lowest earners of increasing the minimum wage.

Maybe if you read them you'd understand the point, but maybe not.

On 2/25/2022 at 10:53 PM, Benroon said:

Of course costs matter and productivity doesn't ?

You're just plain wrong plus and with respect bereft of any vision if after ownership of four companies you see staff as a liability. In the scenarios you gave me? run promotions? review suppliers? review premises? offer home delivery? change your hours ? a myriad of options (it is patently absurd to say there are just three, you meant only three you can think of) rather than throw in the towel in a hissy fit because it has been mandated you have to treat your staff as human beings. However all the answers to your questions are clearly in my previous post - you just don't want to read them. Higher wages does not need to translate to lower profits, but I've already stated why. I can only lead the horse to water. Even if you don't have vision if higher costs come expand roles, add tasks, look at efficiencies, explain to staff you're facing those costs, treat them as humans and they will respond well in my experience (it's better than redundancy after all) 

I absolutely refuse to believe you ran anything (successfully) if you cannot see that a well provided for workforce is a more productive one. Guess what increased production brings ??? - increased profits .....absolutely elementary stuff.

Higher wages does not necessarily mean less profit in the long run - however to a poor boss without the capability to see the bigger picture it probably will end that way. Even having said that have you got instances of industry where a minimum wage has caused widespread job losses ? Industry chiefs always wail from the rooftops and then when the tears subside get on with it as their employment armageddon predictions come to nothing.

So you asked and thats fair - I owned my own IT consultancy after spending my life in it working for others, in the 9 years I had it NO-ONE left the company, and EVERYONE was on an above average industry wage for their skill set else you are constantly recruiting. Each placement would cost me upwards of £10k so taking care of them wasn't a nicety, it was a necessity! (They also nearly all went home half drunk at my expense every Friday after work). If anyone had to work late their meals were paid for and everyone got a taxi home at my expense as I didn't want anyone driving home tired and a taxi back in. That was all from my profit. But I viewed it as an investment not a drain.

Did paying everyone well and spoiling the staff rotten work ? Well I retired very early on the proceeds and have a life I couldn't have dreamed of when I left school and keep in touch with many of the staff I employed. 

I got my ethos after working for a fund management company started by a guy who went onto become a chief government advisor and in the 19 years I worked for his company I can count on one hand the people who left as well. A fantastic company that went under because having become extremely successful it was bought by a UK bank who came in with jumped up self important, but ultimately clueless management with a them and us culture, a little like you have, and within 12 months the business, brand and goodwill was gone, dead ! Absenteeism rocketed as it became just a job, costs presumably went through the roof, good people soon left to go to places where they would be respected for the good people they were and after being sold on a couple more times, it folded! We were all on great salaries and exceptional working conditions until poor management got involved and looked at industry averages and decided we were overpaid. I think the last point was it was outsourced to India to save money, paying people there crap wages, and undercutting the good guys that took it to where it was. I hear outsourcing which was once the darling of the IT industry by management who thought it was a genius move is firmly on the backfoot as the loss of customer goodwill outstripped the savings.

Take your staff with you else you will forever be pushing water uphill! 

You've dodged quite a few questions, well all of them actually but specifically still not mentioned where the budget is for retraining a few million rice pickers and where the demand will be for their newly found skills, or what those skills are likely to be, when millions of them flood the markets. You know all basic business stuff.

But your point and your example have absolutely nothing to do with the minimum wage here.

You're talking about employing highly skilled, highly trained staff who are in short supply and highly sought after in a very specialised field, whose services you need to retain as they can't be easily replaced and others want to recruit them, and if you don't look after them your business fails.

The minimum wage here is for unskilled, untrained staff, with no skills at all let alone transferable skills, who can be very easily replaced by either illegal or imported labour or by automation, in businesses that can happily get by without them if need be.

The two couldn't be further apart on every level.

[Benroon]

On 2/26/2022 at 5:50 AM, longwood50 said:

1. There is no "productivity" increase with just raising a wage. 
2. All of the items you listed such as run promotions etc were there before any minimum wage increase.  What you are suggesting is that the business is so poorly run leaving untapped ways to increase profits.  
3. Whether you like it or not, business does not exist "to make lives comfortable" for the employees.  If they are "worth more" they should be able to go elsewhere where the employer recognizes their worth and pays them accordingly.  If they can not get more money elsewhere then they are paid fairly.  Just like selling your home.  It is worth, only as much as the buyer willing to pay the most will pay. 
4. I don't suggest the employers retrain, I suggested the government not dump the problem of low wages on the employers but rather assist low income people gain skills. 
5. In terms of automation.  I might say the cost of buying the mechanized equipment is not worth it since I can hire people at 342 baht per day so the equipment will not save enough to warrant that.  At 492 baht the calculation might be different. You already have restaurants in Bangkok using robots as servers "to save money"
6. The more unskilled, the more the person is at risk.  Jobs such as checkout cashier, gas station attendant, car wash, rice planting, rubber harvesting etc.  All of those can and will be mechanized "if the cost of labor becomes too high"

Already Thailand has the highest rate of "unskilled" labor in Asia.  You will never, I repeat never garner prosperity by having a work force only capable of the most routine tasks.  When Thailand's minimum wage rate exceeds that of other countries, garment manufacturing, rice harvesting, rubber exports, furniture manufacturing etc. all migrate to where the costs are the lowest assuming no difference in skills.  They have to otherwise their competitors will and they will be put out of business. 

If minimum wage is such a panacea for curing the poor, why stop at 492 baht per day.  Why not 1,000 or 10,000 after all according to you those additional costs can just be magically absorbed by better management. Poppycock.

I too want to help people have better lives.  The answer is not to mandate what an employer must pay but to elevate the worker to a job that pays more. 

https://www.thailand-business-news.com/asean/52226-83-5-per-cent-workforce-thailand-unskilled




 

Right so just one of the dozens of questions you've dodged (but again have fooled your disciple) - where is the budget to train the 5 million odd rice pickers, and once you've trained them where are you going to place them ? We can leave the more difficult questions once you've grasped the basics.

[Benroon]

On 2/28/2022 at 7:00 AM, Stonker said:

They're in the articles I linked to, some of which are specific to Thailand, and the effects on the lowest earners of increasing the minimum wage.

Maybe if you read them you'd understand the point, but maybe not.

But your point and your example have absolutely nothing to do with the minimum wage here.

You're talking about employing highly skilled, highly trained staff who are in short supply and highly sought after in a very specialised field, whose services you need to retain as they can't be easily replaced and others want to recruit them, and if you don't look after them your business fails.

The minimum wage here is for unskilled, untrained staff, with no skills at all let alone transferable skills, who can be very easily replaced by either illegal or imported labour or by automation, in businesses that can happily get by without them if need be.

The two couldn't be further apart on every level.

Right so lets race to the bottom yes ? - ethical companies have made a killing in modern times by being just that and shouting their credentials from the rooftops. Numerous companies have had very valuable western contracts ripped from their grasps by penny pinching and treating human beings as animals.

Suppression to line pockets is so yesterday - I'm not sure how old you are but maybe it's too late for you to catch up.

[longwood50]

17 hours ago, Benroon said:

Right so just one of the dozens of questions you've dodged (but again have fooled your disciple) - where is the budget to train the 5 million odd rice pickers, and once you've trained them where are you going to place them ? We can leave the more difficult questions once you've grasped the basics.

I guess I would start with the billions slated to be spent on submarines and stealth aircraft. 

I did not say the task would be easy.  However it you want to "help" the worker you start with training them to be "worth more"   

China has over 1 billion people.  Do you think they trained all 1 billion simultaneously?  No, they targeted specific industries and trained workers to fill jobs for those industries.  As they became productive and contributed to the economy, China then had more money to spend on training additional workers.  Are they done.  Heck no.  Even the USA has a huge pool of people with next to zero skills.  

If you don't understand that, I don't have enough crayons to bring it down to your level of understanding. 

[astro]

On 2/21/2022 at 4:17 PM, longwood50 said:

Walmart pays 7.6% of its total top line sales in wages  so a 10% increase in wages would be .76% or 47% of the net profit it enjoys.  ....

As a business owner, you shouldn't conflate the different positions.

"top line sales" is not the same as net profits.

Due to the lack of other figures re. Walmart, your specious speculations are moot.

[astro]

News regarding the 46% hike:

 

 

 

Labor Ministry Dismisses Rumors About Minimum Wage Raise

BANGKOK (NNT) - The Ministry of Labor has dismissed claims on social media of plans to raise the minimum wage to 492 baht, up from 300 baht currently.
....

 

https://thainews.prd.go.th/en/news/detail/TCATG220319170424734

 

[longwood50]

16 hours ago, astro said:

As a business owner, you shouldn't conflate the different positions.

"top line sales" is not the same as net profits.

Due to the lack of other figures re. Walmart, your specious speculations are moo

I said, their cost of labor was 7.6% of the total cost of operation.  They make approximately 1.6% - 2% ( Net Profit. on top line sales.  Obviously you don't understand that.  You can quote the figure as a percent of sales, or a percent of net profit.  

https://askwonder.com/research/percentage-mcdonald-s-walmart-s-safeway-etc-operating-budget-spent-labor-hiring-7yyf5la6y

[Politenessman]

On 2/9/2022 at 3:52 PM, 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.

Unfortunately that isn't the case, frequently increasing minimum wage just gets workers fired if the business can't afford to pay it and for those that can, it means increased prices across the board eating up much if not all of the wage increase.

[astro]

8 hours ago, longwood50 said:

I said, their cost of labor was 7.6% of the total cost of operation.  They make approximately 1.6% - 2% ( Net Profit. on top line sales.  Obviously you don't understand that.
 

What you wrote is:

"Walmart pays 7.6% of its total top line sales in wages"

- which is, obviously, not the same as perent of net profit.

[astro]

6 hours ago, Politenessman said:

Unfortunately that isn't the case, frequently increasing minimum wage just gets workers fired if the business can't afford to pay it and for those that can, it means increased prices across the board eating up much if not all of the wage increase.

That myth has already been debunked. Not all wages and not other operating costs increase by 46%, the price increase would be far less, thus leaving the worker on minimum wage with a net gain.

 

That is, if the wage increase actually hit the target group. Apparently, in Thailand, the policy has been less than successful, thanks for the links, Stonker.

Besides, I already noted that a 46% rise is unrealistically high and counterproductive. Why not adjust it yearly in line with inflation or living cost index?

[AlexPTY]

Does this apply to Nana Plaza businesses? 

[longwood50]

15 hours ago, astro said:

What you wrote is:

"Walmart pays 7.6% of its total top line sales in wages"

- which is, obviously, not the same as perent of net profit.

Math and business was never your good subject was it.  Walmart pays about 7.6% of its total top line sales in wages.  It makes approximately 2% net of top line sales.   NET PROFITS ARE AFTER EXPENSES.  HINT: WAGES ARE AN EXPENSE. So you can not calculate wages from net profits since net profits are after all expenses are paid.  DUH

[Politenessman]

18 hours ago, astro said:

That myth has already been debunked. Not all wages and not other operating costs increase by 46%, the price increase would be far less, thus leaving the worker on minimum wage with a net gain.

That is, if the wage increase actually hit the target group. Apparently, in Thailand, the policy has been less than successful, thanks for the links, Stonker.

Besides, I already noted that a 46% rise is unrealistically high and counterproductive. Why not adjust it yearly in line with inflation or living cost index?

I'm afraid it hasn't been debunked, just denied. you raise a businesses production costs they either cut costs (less hours, less staff and more automation) or increase prices (or go out of business), now when the price of almost all of their inputs goes up (because all of the inputting companies have similar price rises to cover), they frequently have to sack staff and increase prices.

Real world examples of this abound.

[longwood50]

1 hour ago, Politenessman said:

I'm afraid it hasn't been debunked, just denied.

You are absolutely correct. 

These people who somehow "think" that you can raise the cost to a business and it can just be magically disapear amaze me.  

Common sense tells you that if somehow your own personal expenses go up, you have less to spend.  The same is true for the business person.  If the cost of wages goes up and the business does not pass along the additional expense of labor, the business "earns less" 

Their is this misguided notion that businesses make huge percentage of profits.  Take a small business like a 7/11 that is a single owned location.  

How much does a 7-Eleven store owner make? Well a lot depends on what you are selling as some items have much higher margins, but a very approximate estimate is 5% of store sales so a store doing $1,000,000 in sales would generate about $50,000 for the owner. There are more accurate ways to forecast 7-Eleven franchise earnings but that will give you a ballpark. Now you know why you often see owners working in the stores.
https://www.franchise.city/7-eleven-franchise
 

To get a very rough idea of the income a 7-Eleven can produce, just take 5% of store sales.

• So a store that does $1,300,000 in sales will make roughly $65,000.

For a slightly more accurate forecast, you will need the following key factors to determine the possible income:

• Store sales
• Store GP% – how much out of every dollar you actually keep (roughly 36%)
  • GP split with 7-eleven, 48-52 for the typical store (in favor of 7-Eleven) but will be worse if this is a high volume store, since your GP percent decreases as your total GP dollars increase.
• Payroll (including taxes & benefits) – A rough guideline is about 9% of sales, but this will increase if you choose to have a full time manager, get more traffic, or sell a lot of coffee.
• Other Expenses – A rough guideline is about 3% of sales, but could change significantly with inventory & cash shortages.
  https://conveniencestorenews.wordpress.com/2008/09/16/7-eleven-income-potential/
  
   

So if you have a small convience store in Thailand and you are the typical with 9% of top line sales going to labor and you are "typical" and you make 5% of top line sales as your profit, for each 11% increase in wages  your profit goes down by 20%.  And remember you are working at the store so your net profit is "your wages" for working there.  The 5% figure is lower if you hire full time managers. 

These small retailers are exactly the type of employer that hires "minimum wage" workers. 

Is 7/11 unusual.  No. Here are the net profit margins of the 10 largest retailers in the USA

 

 

And what about net margin? Not so high. According to an article on Investopedia’s website, the average profit margin for retail is typically from 0.5 to 3.5%. The 2016 Deloitte study mentioned earlier, which found the average for the entire industry to be 3.2%, noted the net profit margin for the ten largest retailers:

• Wal-Mart: 2.9%
• Costco: 2.0%
• Kroger: 1.7% (Grocery Stores as an industry: 2.3%)
• Schwarz Group (German): N/A
• Walgreens: 3.6%
• Amazon: 1.7%
• Home Depot: 8.4%
• Aldi (German): N/A
• Carrefour (French): 1.1%
• CVS: 3.0%
  
  Now these figures are are net as a percent of sales.  Using a ball park of 10% of top line sales as labor costs each 10% increase in wages would result in a 1% loss to the net profit.  For most then a 20% increase in wage costs would completely wipe out any profit for the business.  And Thailand is talking about a jump of 46%.  
  
  The more workers a company has at the minimum wage, the more they will be impacted.  And typically, wage increases at minimum wage creep up to non minimum wage workers as they demand pay higher than those with the most minimal skills. 
  
  The business faced with any increased cost whether it is cost of goods, taxes, rent, or labor has only 3 alternatives.  Pass the cost along, earn less money, or reduce the item(s) that have increased in cost.  Businesses to not have this reservoir of untapped inefficiencies that they can tap to mitigate wage, cost of goods, taxes or any other cost increase.  If they did, they would be out of business as more efficiently run businesses would run them out of business.  
  
  There is also this myopic view that somehow business in Thailand or for anywheres else operates in a protected bubble immune from foreign competition.  Business will and must go where its costs of operation are the lowest.  If it doesn't competitors will and soon they business that does not keep its cost the lowest will be out of business.  Industries here in Thailand like farming, furniture production, rubber etc will soon look to places like Vietnam, the Philippines, Malaysia etc instead of Thailand.  At the very least new businesses without the cost of relocation will view Thailand as a less attractive place to locate.  It isn't as if Thailand is offering anything more than the adjacent countries in terms of a skill set.  We are talking about unskilled minimum wage workers. 
  
  You want Thailand people to earn more, then educate them and provide them with skills. Here are the top 5 countries with the greatest percentage of "skilled workers"

   

• Switzerland..
• Singapore. 
• Denmark
• Sweden.
• Australia.

•  

• Now is it any suprise the wages in those countries are also higher?  If all they offered was unskilled labor they quality of life in those countries would be no different than SE Asia.  If you want to ensure making Thailand poor going forward, do nothing to improve the skill set it offers companies and to add a nail to the coffin make that minimum wage employee the most expensive in the region. 

[astro]

5 hours ago, longwood50 said:

Math and business was never your good subject was it.  Walmart pays about 7.6% of its total top line sales in wages.  It makes approximately 2% net of top line sales.   NET PROFITS ARE AFTER EXPENSES.  HINT: WAGES ARE AN EXPENSE. So you can not calculate wages from net profits since net profits are after all expenses are paid.  DUH

 

No need to get offensive & patronising, I know what the terms mean.

Going through the posts again, I failed to follow the calculations you applied. Your reasoning is correct in that a 10% wage increase translates to roughly half of Walmart's net profit.

That is assuming that ALL wages rise 10%, but we've been talking about raising the minimum wage. Others would still expect a pay rise, but considerably less. That's repeatedly been pointed out, but been ignored in your reasoning.

So, the actual increase in operating costs/wages would be considerably less than your .76%.

Given that Walmart is a fine example of a cut-throat business which competes on price through keeping wages and workers' rights to a bare minimum, perhaps they'd need to change their strategy if they cannot afford to pay the legal minimum wage.

[astro]

3 hours ago, Politenessman said:

I'm afraid it hasn't been debunked, just denied.

This is what you claimed and I took issue with:

On 3/21/2022 at 8:36 AM, Politenessman said:

it means increased prices across the board eating up much if not all of the wage increase.

In fact, you failed to address my reasoning refuting that claim.

 

 

[astro]

1 hour ago, longwood50 said:

These people who somehow "think" that you can raise the cost to a business and it can just be magically disapear amaze me.  

Hardly surprising that nobody here has such thoughts.

You've created a strawman.

[longwood50]

2 hours ago, astro said:

That is assuming that ALL wages rise 10%, but we've been talking about raising the minimum wage. Others would still expect a pay rise, but considerably less. That's repeatedly been pointed out, but been ignored in your reasoning.

Yes but this was to point out that if you raise the minimum wage that wages above it will also likely experience an increase. If the minimum wage was lets say $13.00 and that gets raised to $15.00 per hour  That is for new inexperienced workers in the lowest skill level.  

You have been with the company for 3 years started at $12.00 per hour and through annual raises you now earn $15.00 per hour.  You would certainly press that your job experience and higher level position deserves more than those with no experience. 

Walmart has 2.2 million employees and they bumped the pay by $1 for 565,000 workers .  That is 25.6% of its workforece In 2021 Walmarts minimum wage was $11 per hour.  So the bump increased Walmarts cost for minimum wage employees by just over 9%.   If the bump does not also boost the wages of those earning more than the minimum wage Walmart's cost of labor would go up from 7.6% of sales to approximately 7.8%.  that .2/10% of 1% represents 10% of ALL THE PROFITS Walmart has made on its average net income of 1.93% for the past four quarters.  Mind you that is with only a 9% raise to only 25% of its employees. 

And you are suggesting that a 46% increase in Thailand's minimum wage won't impact employers or prices. 

Your comment about Walmart being "cut throat" and that meaning something is just nonsensicle.   Do you really believe that Tesco is not cut throat in its business with Makro or Big C.  Do you think that 7/11 is not cut throat with Family Mart.  All businesses try to maximize THEIR profit by minimizing cost. 

Here in Thailand if the farmer now has a 46% increase in employee cost to pick/plant rice or harvest rubber do you really believe that won't impact the farmer and prices. How naive.  Now when that same farmer has to sell their product and compete against the Philipines and Vietnam and the rice or rubber is now more expensive, do you really believe that the higher price for Thailand products won't impact its export sales. 

Costs and it does not matter whether that cost is cost of material, rent, insurance, taxes, transportation or labor have to be paid for before the owner makes a profit.  Raise any of them and the owner has only 3 choices.  Keep prices the same and make less money, raise prices and potentially face lower sales or reduce the amount of the cost that is increasing.  With labor that means reducing either the number and/or hours worked by workers or automating if possible to get rid of them entirely. 

83.5 per cent

A World Bank survey results showed that 83.5 per cent of the workforce in Thailand is unskilled. This puts Thailand's skilled workforce at the lowest proportion among other Asean countries.  Now using your 'RAISE THE MINIMUM WAGE"  The significant portion of Thailand workers would get that raise since most are unskilled.  Look ahead 20 years and if the same percentage still exists then nothing has changed.  You still have Thailand with the majority of its citizens earning meager wages and unskilled. 

You want to "help Thailand and its citizens become prosperous" train them to occupations that command higher pay, not command higher pay for no skills.  Jobs in chip manufacturing, pharmaceuticals, electronic component assembly, etc. and you raise the wages for the employees, you make Thailand a more preferred place for companies that require higher skills to locate to.  Those workers with higher wages spend more improving the overall economy.  Raise the minimum wage and do nothing else, and you have a future with nothing more than people who pick rice, harvest rubber, raise vegetables, and grow flowers.  That is not a road to help people prosper.  Hurting the employer through raising the employers cost only serves to damper new entrants starting businesses and sucking available money to expand.  Again, hurting not helping. 

[Soidog]

On 2/10/2022 at 1:01 PM, PRC said:

Im nor against the idea but what people forget is that everybody who is on above the minimum salary like qualified carpenters who may be on 500 baht a day will now demand 600 a day to keep the parity which is completely  understandable  they should always be on a higher wage than laborers  but ultimately this rise will push up the price of everything 

It has to push up prices as you rightly say. This is a pay rise which as far as I know has not been met by improved productivity. Nothing is for free. 

[Wanderer]

On 3/20/2022 at 8:01 PM, astro said:

News regarding the 46% hike:

Labor Ministry Dismisses Rumors About Minimum Wage Raise

BANGKOK (NNT) - The Ministry of Labor has dismissed claims on social media of plans to raise the minimum wage to 492 baht, up from 300 baht currently.
....

 

https://thainews.prd.go.th/en/news/detail/TCATG220319170424734

Thank you Astro I was not clear if there was a firm date for the introduction of the new higher rate. 

[astro]

3 hours ago, longwood50 said:

And you are suggesting that a 46% increase in Thailand's minimum wage won't impact employers or prices. 

I never made any such suggestion, you're fantasising again.