News Forum - Big pay day: Thailand minimum wage to hike to 400 baht in 2025

[Thaiger]

Thai workers could be ringing in the new year with a pay boost, as the Labour Ministry announces plans to raise the minimum wage to 400 baht per day in 2025. Labour Minister Phiphat Ratchakitprakarn confirmed the increase, calling it “a new year present” for the nation’s workforce. Initially slated for October, the raise faced … …

The story Big pay day: Thailand minimum wage to hike to 400 baht in 2025 as seen on Thaiger News.

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[Pinetree]

The equivalent of £9 in UK money, or US$11.69  per day, yep, really big hike, jubilation all around. So many unskilled workers will not even get that. 

[ChrisS]

Long overdue but still many will employ illegal workers for less than that.

[AussieBob]

This is not good news - the already struggling Thai economy will now struggle even more. The PT Party is order to buy votes has promised to increase the amount to 600 Baht per day by 2027 (next election). This is going to drive even more investments away and into neighbouring countries who dont impose such ridiculous over-reach on businesses.  Those Chinese/Thai business with access to illegal workers will just hire more illegals. It only affects those with over 200 employees - but who knows what other vote buying lunacy this minority Govt is going to try over the next few years. 

For this who disagree, the reality of wages rates is that whenever workers get a pay rise without a productivity increase, the net affect is higher prices - the costs are passed on to the consumer. If you are like me have a think back to 1970s and how since then when wages started increasing in 80s, that everything became so much more expensive - and the never ending cycle continues to this day. There are additional reasons, especially increased government regulation costs, but the result will be the same. 

Japan was the second largest economy in the world in 1980s for one reason and one reason only - their costs of manufacturing (mainly costs of wages and regulations) were a lot lower than in the west. When they started paying higher salaries, their economy started to decline - they have basically been in a recession since early 2000s. Thailand used to be cheap and easy - but 10 years of a Junta and political uncertainties since Covid - has resulted in other countries nearby taking up the slack. Vietnam, Malaysia and Indonesia have been making big inroads into the China alternative SEAsia  location that was once Thailand. This policy and many other lunacy policies, are making Thailand less and less attractive to foreign investors (and retirees too). 

[Marc26]

5 minutes ago, AussieBob said:

This is not good news - the already struggling Thai economy will now struggle even more. The PT Party is order to buy votes has promised to increase the amount to 600 Baht per day by 2027 (next election). This is going to drive even more investments away and into neighbouring countries who dont impose such ridiculous over-reach on businesses.  Those Chinese/Thai business with access to illegal workers will just hire more illegals. It only affects those with over 200 employees - but who knows what other vote buying lunacy this minority Govt is going to try over the next few years. 

For this who disagree, the reality of wages rates is that whenever workers get a pay rise without a productivity increase, the net affect is higher prices - the costs are passed on to the consumer. If you are like me have a think back to 1970s and how since then when wages started increasing in 80s, that everything became so much more expensive - and the never ending cycle continues to this day. There are additional reasons, especially increased government regulation costs, but the result will be the same. 

Japan was the second largest economy in the world in 1980s for one reason and one reason only - their costs of manufacturing (mainly costs of wages and regulations) were a lot lower than in the west. When they started paying higher salaries, their economy started to decline - they have basically been in a recession since early 2000s. Thailand used to be cheap and easy - but 10 years of a Junta and political uncertainties since Covid - has resulted in other countries nearby taking up the slack. Vietnam, Malaysia and Indonesia have been making big inroads into the China alternative SEAsia  location that was once Thailand. This policy and many other lunacy policies, are making Thailand less and less attractive to foreign investors (and retirees too). 

I understand your point but disagree...

 

I have been coming to Thailand for 22yrs

Been with my wife for 20 years 

 

And we are in the village (a relatively prosperous village) but travel all over 

 

And I've seen massive growth in the middle class in that time.

 

There aren't many businesses that I can think of that can't absord 400 baht min wage.

 

And that min wage makes other wages rise.

 

A 400 baht min wage increases the wages above that.

 

Anecdotal....but my SIL has worked the same company for 25 years

No education but she worked her way up to a middle manager 

Her husband works a carpenter, so he has a skill above min wage

 

They both have to work long hours bur can afford a townhouse, a car, school expenses 

 

And I see that all around to a much a bigger degree than when I 1st started coming to Thailand 

[AussieBob]

22 minutes ago, Marc26 said:

I understand your point but disagree...

I have been coming to Thailand for 22yrs

Been with my wife for 20 years 

And we are in the village (a relatively prosperous village) but travel all over 

And I've seen massive growth in the middle class in that time.

There aren't many businesses that I can think of that can't absord 400 baht min wage.

And that min wage makes other wages rise.

A 400 baht min wage increases the wages above that.

Anecdotal....but my SIL has worked the same company for 25 years

No education but she worked her way up to a middle manager 

Her husband works a carpenter, so he has a skill above min wage

They both have to work long hours bur can afford a townhouse, a car, school expenses 

And I see that all around to a much a bigger degree than when I 1st started coming to Thailand 

We will see Marc - and just like a few days ago, IO you are wrong again.  Your limited exposure does not relate to the 100 of thousands of low paid salaries in Thailand (mainly Bangkok and surrounds).  I am not saying I have met them all - I am saying I understand business costs and employees are the biggest. Most people in Thailand dont work for companies with over 200 staff - this is an impact that will be mainly felt by larger businesses. If you as a foreign investor factor into the equations a min salary of 600 Baht is 3-4 years, that has a dramatically negative impact on the numbers. Slowly slowly Thailand's economic strengths and advantages are falling away. The supply of unlimited cheap Myanmar workers has had a big impact (and will for a while) - this is another straw on the back. This seems small to some, but that is because they only look at it in isolation. 

[Marc26]

16 minutes ago, AussieBob said:

We will see Marc - and just like a few days ago, IO you are wrong again.  Your limited exposure does not relate to the 100 of thousands of low paid salaries in Thailand (mainly Bangkok and surrounds).  I am not saying I have met them all - I am saying I understand business costs and employees are the biggest. Most people in Thailand dont work for companies with over 200 staff - this is an impact that will be mainly felt by larger businesses. If you as a foreign investor factor into the equations a min salary of 600 Baht is 3-4 years, that has a dramatically negative impact on the numbers. Slowly slowly Thailand's economic strengths and advantages are falling away. The supply of unlimited cheap Myanmar workers has had a big impact (and will for a while) - this is another straw on the back. This seems small to some, but that is because they only look at it in isolation. 

My whole Thai family works for the packaging arm of Colgate

A massive company.....

My wife is from Samut Prakan, where besides the Rayong area, is some of the biggest factories in the Bangkok vicinity..

 

Employee costs will always be a company's biggest expense.

 

But wages are and will continue growing throughout the region, not just Thailand

[Khunmark]

In this instance the increase is justified and long overdue. Productivity has outstripped wages for the last five years in Thailand. And inflation (the argument against) is an unlikely outcome because in Thailand the ratio of wage earners is considerably lower than OECD countries, currently around 45% of the work force.
 

Thailand won’t have shaken its tag as a developing country until it lifts the standard of living for its workforce beyond the status of working poor. Furthermore, Thailand is absent of wage indexation and organised labour, which in many countries negates the decline in living standards caused by inflation.
 

 

[AussieBob]

1 hour ago, Marc26 said:

My whole Thai family works for the packaging arm of Colgate

A massive company.....

My wife is from Samut Prakan, where besides the Rayong area, is some of the biggest factories in the Bangkok vicinity..

Employee costs will always be a company's biggest expense.

But wages are and will continue growing throughout the region, not just Thailand

When the local Colgate franchise can make it elsewhere and bring it into the country for 20-30% less than it costs in Thailand, things will change. It has already started - China is having an impact already, and companies are leaving and not many new ones coming. This wages measure on its own would not be an issue, but combined with the other factors and the statement it will be 600 Baht in 2027, means businesses will be even more reluctant to invest in Thailand. Things are not going good at the moment.

Bangkok Post - Factories closing as cheap imports flood Thailand

561 factories in Thailand shut their doors in 2024

Two automotive manufacturers to close production factories in Thailand - Polymers Paint Colour Journal

[AussieBob]

1 hour ago, Khunmark said:

In this instance the increase is justified and long overdue. Productivity has outstripped wages for the last five years in Thailand. And inflation (the argument against) is an unlikely outcome because in Thailand the ratio of wage earners is considerably lower than OECD countries, currently around 45% of the work force.
 

Thailand won’t have shaken its tag as a developing country until it lifts the standard of living for its workforce beyond the status of working poor. Furthermore, Thailand is absent of wage indexation and organised labour, which in many countries negates the decline in living standards caused by inflation.
 

See my post above - this is not a simple matter of what is 'justified' or 'overdue'. That is not the point - it is about the Thai economy going downwards, and what the Govt is doing to slow/stop that decline. This announcement only adds fuel to the fire - not much, but for some it will make a difference.  The number one reason manufacturers make stuff here is because of the cheaper labour costs - taking that away by making it 600 Baht in 2027 (almost double what it is now) is not a good idea - period.

[Khunmark]

27 minutes ago, AussieBob said:

See my post above - this is not a simple matter of what is 'justified' or 'overdue'. That is not the point - it is about the Thai economy going downwards, and what the Govt is doing to slow/stop that decline. This announcement only adds fuel to the fire - not much, but for some it will make a difference.  The number one reason manufacturers make stuff here is because of the cheaper labour costs - taking that away by making it 600 Baht in 2027 (almost double what it is now) is not a good idea - period.

The logical extension of your argument is that the minimum wage, under no circumstances should be increased, for fear of manufacturers moving their operations off-shore. It’s a short sighted argument, largely because the cost of uprooting your operations and finding  a highly trained workforce aboard is not worth the cost.

Not to mention, the ease of doing business in the host country. And this is what Thailand should be doing if they aren’t already, promoting itself as place conducive to business, whilst providing protections and incentives to its workforce. There are numerous example of where large businesses have forsaken the lure of a cheaper labour cost workforce to stay put, and that’s due to a myriad of variables which precipitate such a decision. It’s a far more nuanced environment than you’re painting.

[Pinetree]

4 hours ago, AussieBob said:

We will see Marc - and just like a few days ago, IO you are wrong again.  Your limited exposure does not relate to the 100 of thousands of low paid salaries in Thailand (mainly Bangkok and surrounds).  I am not saying I have met them all - I am saying I understand business costs and employees are the biggest. Most people in Thailand dont work for companies with over 200 staff - this is an impact that will be mainly felt by larger businesses. If you as a foreign investor factor into the equations a min salary of 600 Baht is 3-4 years, that has a dramatically negative impact on the numbers. Slowly slowly Thailand's economic strengths and advantages are falling away. The supply of unlimited cheap Myanmar workers has had a big impact (and will for a while) - this is another straw on the back. This seems small to some, but that is because they only look at it in isolation. 

If a MW of 400 Baht, per day,  puts off any organization from investing here, then that organization is in big financial doo doo and is looking only  to exploit its workforce, to their detriment and Thailand doesn't need it.  It's 400 Baht people, PER DAY 

[AussieBob]

23 hours ago, Khunmark said:

The logical extension of your argument is that the minimum wage, under no circumstances should be increased, for fear of manufacturers moving their operations off-shore. It’s a short sighted argument, largely because the cost of uprooting your operations and finding  a highly trained workforce aboard is not worth the cost.

Not to mention, the ease of doing business in the host country. And this is what Thailand should be doing if they aren’t already, promoting itself as place conducive to business, whilst providing protections and incentives to its workforce. There are numerous example of where large businesses have forsaken the lure of a cheaper labour cost workforce to stay put, and that’s due to a myriad of variables which precipitate such a decision. It’s a far more nuanced environment than you’re painting.

No it is not logical - that is irrational. The basic minimum wage should be slowly increased - in line with some annual measure for the costs of living of those earning minimum wages. Nothing like that exists here, and in most countries - they count the total increased costs for all people - which is higher than the costs for people who live on minimum wage. Those on minimum wage are not highly trained.

Yes they should do more to ease the cost of doing business - one example is that organisations must employ a minimum number of Thais. Over the years I have known a lot of Expats who have business operations, and aside from family, they all say Thais do not work hard - and if you push them, they get extremely offended - plus they get a lot of holidays. 

If you think that businesses have not be locating operations in China and other locations in SEAsia mainly due to costs, then IMO you dont understand how large and medium business works. Sure, they are also encouraged to do so in order to get preferential tariff treatments (such as over those that fully import their products) - Honda, Toyota, Mercedes all have build and assembly plants here for that reason AND the costs of labour and other associated expenses (bribes and other 'things' are also taken into account).

[AussieBob]

22 hours ago, Pinetree said:

If a MW of 400 Baht, per day,  puts off any organization from investing here, then that organization is in big financial doo doo and is looking only  to exploit its workforce, to their detriment and Thailand doesn't need it.  It's 400 Baht people, PER DAY 

You clearly have never worked with or owned a business that operates in SEAsia/China - and your socialistic views are just totally wrong. The PT Party have said they will also increase MW to 600 Baht within 2 years. That is almost a 100% increase in under 3 years. Sorry, but your simplistic local village type thinking does not apply for large and medium organisations.  1000 employees at 350 per day equals 109,200,000 Baht (6 days a week). 1000 employees at 600 Baht per day equal 187,200,00o million baht. An annual increase of about 80 million baht in salary costs for a medium enterprise is nothing?? How about one that employs 10,000 on MW all over the country - that is 800 million baht.  Mate - that is only part of the equation. When the businesses looking at their plans going forward 3-5 years (minimum) when deciding if the invest (or re-invest), those numbers make a huge difference to the equation. That and a few others reasons (political uncertainty and economic growth especially) is why as poer my posted links, companies are leaving Thailand and not many are coming in. Dont quote me Google/FB data centre od things like that - because having done those things I know the new business operation that has a initial large up front cost (mostly made up over overseas equipment and staff), but going forward there are not many people actually working in that centre/facility.  IT&T things like a manufacturing plant or a call centre - that is what employs large numbers over the longer period. 

[Khunmark]

2 hours ago, AussieBob said:

The basic minimum wage should be slowly increased - in line with some annual measure for the costs of living of those earning minimum wages

So your solution is a tiered wage indexed system in what would be a world first. I hadn’t released you were such a fan of bureaucracy, Bob.

In case you haven’t noticed, the current administration is having difficulty delivering on their relatively simple digital wallet program. Which begs the question how would they implement the vague and convoluted scheme that you propose? It’s obvious that public policy is not your one wood. If it was you would realize the unworkability of your suggestion. 

[Marc26]

8 hours ago, AussieBob said:

No it is not logical - that is irrational. The basic minimum wage should be slowly increased - in line with some annual measure for the costs of living of those earning minimum wages. Nothing like that exists here, and in most countries - they count the total increased costs for all people - which is higher than the costs for people who live on minimum wage. Those on minimum wage are not highly trained.

Yes they should do more to ease the cost of doing business - one example is that organisations must employ a minimum number of Thais. Over the years I have known a lot of Expats who have business operations, and aside from family, they all say Thais do not work hard - and if you push them, they get extremely offended - plus they get a lot of holidays. 

If you think that businesses have not be locating operations in China and other locations in SEAsia mainly due to costs, then IMO you dont understand how large and medium business works. Sure, they are also encouraged to do so in order to get preferential tariff treatments (such as over those that fully import their products) - Honda, Toyota, Mercedes all have build and assembly plants here for that reason AND the costs of labour and other associated expenses (bribes and other 'things' are also taken into account).

I do agree with you that you need to raise the wage incrementally vs these big bumps that Thailand seems to do

 

Regardless if it's "only " 400 baht to us

Increasing wages by 25% and then by 50% in a short period of time, does have an effect on businesses...

[Marc26]

8 hours ago, AussieBob said:

. Over the years I have known a lot of Expats who have business operations, and aside from family, they all say Thais do not work hard - and if you push them, they get extremely offended - plus they get a lot of holidays. 

 

Reminded me when I lived in Patong

 

I lived in a great little development 

About 30 units

Had a pool and restaurant and small tiki bar downstairs 

 

The guy who ran the bar/restaurant was a great guy.

He had gobs of money and just enjoyed having the place....I don't think he cared if he lost money

 

He paid the 3 or 4 waitresses and then the 2 cooks very well and for the most part, most days when it was just us residents hanging around the staff could play cards, take naps, really was a dream job 

The 3/4 days a month when it'd get a bit busier and they'd actually have to work a bit hard(and get more tips) they would walk around pouting and a lot of times, basically shut down physically 

[Marc26]

On 11/9/2024 at 10:23 PM, Khunmark said:

The logical extension of your argument is that the minimum wage, under no circumstances should be increased, for fear of manufacturers moving their operations off-shore. It’s a short sighted argument, largely because the cost of uprooting your operations and finding  a highly trained workforce aboard is not worth the cost.

Not to mention, the ease of doing business in the host country. And this is what Thailand should be doing if they aren’t already, promoting itself as place conducive to business, whilst providing protections and incentives to its workforce. There are numerous example of where large businesses have forsaken the lure of a cheaper labour cost workforce to stay put, and that’s due to a myriad of variables which precipitate such a decision. It’s a far more nuanced environment than you’re painting.

 

[Marc26]

8 hours ago, AussieBob said:

. Over the years I have known a lot of Expats who have business operations, and aside from family, they all say Thais do not work hard - and if you push them, they get extremely offended - 

My wife built a very good business from scratch before Covid hit, solely on being diligent, meticulous in her jobs and always getting the job done properly.

 

She was getting jobs from big firms like Kawasaki and Robinson's department store and the Bangkok Auto Show

 

And it all came down to doing the jobs right 

[AussieBob]

17 hours ago, Khunmark said:

So your solution is a tiered wage indexed system in what would be a world first. I hadn’t released you were such a fan of bureaucracy, Bob.

In case you haven’t noticed, the current administration is having difficulty delivering on their relatively simple digital wallet program. Which begs the question how would they implement the vague and convoluted scheme that you propose? It’s obvious that public policy is not your one wood. If it was you would realize the unworkability of your suggestion. 

Never made such a suggestion - you assumed that, and as usual you got it wrong.

I have forgotten more about Government than you will ever know.

If your question (rather than an attack) is - how would you measure the 'inflation index for minimum wage', then my answer is simple. I would have the committee that examines yearly the setting of the minimum wage, take the existing components of the existing inflation index measurement and remove those components not applicable and add those that are. That would be the base level consideration for the annual minimum wage increase (on the basis that it would never go down). Which ones in and which ones out is a matter for their decision, but it would basically be the same ones each year (average mortgage payments for example).  There are other factors to take into account, such as the economic growth of those businesses that employ people on MW, but that is another area. In order to smooth out the peaks and troughs, I would base the calculations over this year and the last 3 years and next year's forecasts - that would make sure no big increase one year and then no increase for years.

Thailand is not as sophisticated as Australia - but here is some of what I know for the laymen (and the geese).

Inflation and its Measurement | Explainer | Education | RBA

       

[AussieBob]

13 hours ago, Marc26 said:

I do agree with you that you need to raise the wage incrementally vs these big bumps that Thailand seems to do

Regardless if it's "only " 400 baht to us

Increasing wages by 25% and then by 50% in a short period of time, does have an effect on businesses...

Cheers Marc.  If only more people realised that if the Government gave every single person 1 million dollars they will be far worse off in 2-3 years. Simple economics is not understood by many people these days. I blame the education system, and I note many liberal teachers these days are more interested in teaching kids about BS issues like gender, climate and DEI.  

[AussieBob]

12 hours ago, Marc26 said:

My wife built a very good business from scratch before Covid hit, solely on being diligent, meticulous in her jobs and always getting the job done properly.

She was getting jobs from big firms like Kawasaki and Robinson's department store and the Bangkok Auto Show

And it all came down to doing the jobs right 

Ditto - my wife ran a small shop (and 2 of her Sisters still do). The ratio of 'good' Thai workers to lazy Thais workers is about 10 to 1 (10 being lazy). Any Thai that is 'educated' and speaks English, and who has a good work ethic, will stand out and do very well - because there are so few of them. So many Thais think Mai Pen Rai means in all things and it does not apply to doing something you are being paid to do. 

One of the worst things any Thai Government could ever do - and I think maybe MFP failing meant they dodged a bullet - would be to introduce welfare payments for the unemployed.  If you think there are many lazy people who will just sit back and take the welfare and not care about life in the West, they are an absolute minority compared to their numbers in Thailand. That would be like comparing the number of Amish to the number of Christians in America. I really should not mention the Amish in Pennsylvania - but there you go 

[Khunmark]

3 hours ago, AussieBob said:

Never made such a suggestion - you assumed that, and as usual you got it wrong.

I have forgotten more about Government than you will ever know.

If your question (rather than an attack) is - how would you measure the 'inflation index for minimum wage', then my answer is simple. I would have the committee that examines yearly the setting of the minimum wage, take the existing components of the existing inflation index measurement and remove those components not applicable and add those that are. That would be the base level consideration for the annual minimum wage increase (on the basis that it would never go down). Which ones in and which ones out is a matter for their decision, but it would basically be the same ones each year (average mortgage payments for example).  There are other factors to take into account, such as the economic growth of those businesses that employ people on MW, but that is another area. In order to smooth out the peaks and troughs, I would base the calculations over this year and the last 3 years and next year's forecasts - that would make sure no big increase one year and then no increase for years.

Thailand is not as sophisticated as Australia - but here is some of what I know for the laymen (and the geese).

Inflation and its Measurement | Explainer | Education | RBA

[Marc26]

8 hours ago, AussieBob said:

Ditto - my wife ran a small shop (and 2 of her Sisters still do). The ratio of 'good' Thai workers to lazy Thais workers is about 10 to 1 (10 being lazy). Any Thai that is 'educated' and speaks English, and who has a good work ethic, will stand out and do very well - because there are so few of them. So many Thais think Mai Pen Rai means in all things and it does not apply to doing something you are being paid to do. 

One of the worst things any Thai Government could ever do - and I think maybe MFP failing meant they dodged a bullet - would be to introduce welfare payments for the unemployed.  If you think there are many lazy people who will just sit back and take the welfare and not care about life in the West, they are an absolute minority compared to their numbers in Thailand. That would be like comparing the number of Amish to the number of Christians in America. I really should not mention the Amish in Pennsylvania - but there you go 

As I mentioned above, I don't have really any issues with my Thai family

 

4 brothers and 1 sister and all but one are extremely hard workers.

 

Too hard actually 

If we need anything done at the house and need to go somewhere to do something they are at the house at 5am waiting on us to get going 

 

The one brother who doesn't work hard had some health issues but that was a while ago and he's used that as an excuse ever since to work sparingly.

But even him, he's basically become my wife's assistant of sorts

And he's very diligent at that.

 

But at 33yrs old, we would be worried about our "future"

He is just fine getting by from his family 

 

Not a way I'd want to live but he seems fine with it