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Should Thailand Raise the Minimum Wage?

Categories: East Asia, Thailand, Economics & Business, Labor, Law

One of the campaign promises of newly elected Prime Minister Yingluck Shinawatra and her Pheu Thai Party was to raise Thailand’s minimum wage [1] from the current average of 160 baht to a national level of 300 Baht (US$10) a day. After her electoral victory, it was announced that the increase will take effect next year while the new pay scale for university graduates (Bt15,000 or $500) will be implemented this October.

As expected, the business sector is opposing the proposed higher minimum wage. The government assures the private sector that it will be consulted before implementing the promised wage reform. Here are some reactions [2] from bloggers.

Andrew Spooner [3] calls for more research to support the need for a minimum wage adjustment:

What we seem to be witnessing, rather than an evidence-based debate on the likely benefits and possible pitfalls of increasing Thailand’s minimum wage, is the usual range of shrill, denuded voices that seem more eager to undermine a popularly elected government than actually establish what is good for the poorest members of the community (aren’t these the same people who are usually screeching about ‘national unity’ at any opportunity?).

Harrison George [4] of Prachatai highlights the main points of the debate:

Whether the minimum wage is the ideal mechanism for increasing the spending power of the poor sods on the bottom rungs of the economy is another matter, but it’s what we’ve got. Pheu Thai have promised to raise it and heaven only knows they have enough capitalist employers in their ranks, so they should know what they’re getting themselves into.

So do it.


Suthichai Yoon mentions the dilemma of the new Prime Minister who ‘used populist policies [5] to win votes’:

Here are the proposed DON'Ts:

1. Bring back the rice pledging scheme for paddy rice of up to Bt20,000 per tonne.
2. Increase the minimum wage for skilled labourers to Bt300 per day and the monthly salary for new graduates to Bt15,000 on Jan 2012.
3. Reduce corporate tax from 30 to 23%.
4. Provide tablet computers to every student from Prathom 1 up.
5. Build a land bridge to ensure long-term energy supply.

But then, those were the election campaign promises, weren't they? How they get out of that dilemma is the responsibility of politicians who use populist policies to win votes, knowing very well that they can't be implemented in real life.

Denyzofisarn reminds Yingluck to keep her promise [6]:

Yingluck was that sweet mango during the election campaign attracting millions of ‘houseflies’ in the most important region of Thailand, in term of mp seat number. Keep your promises! Increase minimum wages to 300bht nation-wide, right away with your 300-strong mps in the house. You have ‘cooked’ up a storm, haven’t you?!

Aye Nai of the Democratic Voice of Burma writes about the impact of a higher minimum wage to Thailand’s more than four million migrant workers [7]. Around 80 percent of the foreign workers are Burmese.

Ko Aye, a Burmese community worker who assists migrants in the Thai border town of Mae Sot, said that while the policy “sounds very delightful for migrant workers”, they are rarely paid the current minimum wage.

He added that more companies may look to exploit the lax enforcement of labour laws surrounded migrants, the majority of whom work in low-skilled industries and often do not enjoy the same workplace conditions as their Thai counterparts.

Thumbnail used is from the Flickr page of jenny downing [8] used under CC License Attribution 2.0 Generic (CC BY 2.0)