300 baht wage to be imposed no matter what...apparently

[David Nears]

The new Min wage for Hua Hin is 240 Baht.

When you consider that you can get 200 bt a day for unskilled farm labour up in Issan with a meal thrown in as well, 240 bt in Hua Hin isn't very much at all.

It is a huge issue,

1. An unskilled Issan worker is no different from an unskilled worker anywhere else
2. The education level is the same
3. Wage increases are all relative, you cannot raise the base rate without raising all rates
4. As an employer you must pay to train the staff
5. You must pay to manage the staff and train the management staff
6. You must make increased SS payments
7. You must pay taxes and now higher costs in expenses as other businesses shall increase prices as a result of higher wages
8.There is an informal worker ratio of 1 in 3
9.You have to pay a considerable fee in order to have accurate background checks on staff and these may not even be accurate.

The informal worker do not pay Tax of any kind, they do not have to follow any rules at all in terms of insurance and can conduct themselves as they please providing no security for consumers.

Informal workers contribute zero to the growth of local areas services and infrastructure,

Consumers should consider this when they pay for these services, they are actually hindering the progress of Thailand and Thai people.

Paying for these services only promotes poor education health care and public services, consider this the next time when you feel angry or upset about Thailand. Consumers of informal workers products simply contribute to the tag TIT, because of their pursuit of cheap, cheap.

This can only mean that there is little or no improvement in the immediate area due to less income from tax revenue.

The real question is who really benefits,

No one really, there is no improvement in the basic fundamentals
Education, health care & public services

Hua Hin is struggling to cope with growth, the local area cannot even provide consistent running water to a massive proportion of residential areas, this is just the tip of the iceberg.

Could continue but best not too,

People always see things as in terms of cheap and want things cheap.

So the market I compete in is by definition an unfair market as competition is allowed to compete without paying tax, we as an employer have to pay for the minimum wage and raise rates accordingly and pay higher expenses as a result.

I would like to see things improve in terms of education and health care for Thai people. I would like to see the improvement of public service, transport, Police etc.

I would like a safe environment for my daughter, a park free of danger for her to play in that is maintained, a street to walk on that does not trip me up, a walk on a sunny day without being attacked by dogs or looking at rubbish all over the place, good education that does not cost a small fortune.

The basics,

If the money being spent was being put to good use this would be amazing for Hua Hin.

Sadly at the moment it is difficult to see the difference between today and the 1st of April in terms of what are the improvements for Thai people going to be, or to be bold for HUA HIN people foreign and domestic, we all live in the same environment!

What are businesses getting for their investment in Thailand?
What are we as Hua Hin people getting?
What are Thai people getting?

Rant Over

[STEVE G]

1. An unskilled Issan worker is no different from an unskilled worker anywhere else...

Except that they're working from their family homes and have very low living costs which is very different from most of the workers in Hua Hin who have come from elsewhere and have to provide accommodation from those salaries.

[David Nears]

1. An unskilled Issan worker is no different from an unskilled worker anywhere else...

Except that they're working from their family homes and have very low living costs which is very different from most of the workers in Hua Hin who have come from elsewhere and have to provide accommodation from those salaries.

This is not the issue, the issue is UNSKILLED and workforce's are all kinds of demographics and life stages.

The issue is that they have to be trained and also in most cases educated in how to learn, they actually need training in how to accept information and how to use it. There are many cultural issues related to training and education here. This needs to be managed and implemented, all of my employees are Thai.

All of my training literature has been written by me in English and translated to Thai, I have spent years creating this alone, from the basics to advanced.

One of my biggest problems is that I am training them at the risk of them competing against me, in an unfair market. There is no protection for my time invested in this,

I am training them in how to deal with foreigners, I am training them in all kinds of self discipline and self management that they have never considered before.

Some of them cannot even read or write, this is how limited the labour pool is here and how lacking the education system is,

Everyone in the world resists and fights change.

Everything they are being taught is change and different, so they naturally resist it, fundamentally because they have never experienced any kind of education that isn't Thai. Our educations do vary but they are influenced on an international level as we study a wider range of subjects, we are taught to open our minds and question.

There are some startling differences in our experiences of education influencing our ability to learn and more importantly the benefits of learning.

Knowledge is power!

Is this as common a phrase in Thailand as it is in the West?

[Takiap]

You make some very valid points David, but to be honest, I can't imagine we'll see major change any time soon. Many Thais actually prefer to work below the radar, or as you put it, in the informal sector. One reason is of course that they can dodge paying tax. I know unskilled laborers don't earn enough to pay tax, but there are many people working in the informal sector who do earn good money.


My guess is that there are millions of people in Thailand earning considerably more than my wife for example, but don't pay tax as she does. Admittedly, she benefits from things ongoing education in the form of training being provided by her employer. She also has very good medical aid and etc. However, ongoing training and things like medical aid are of no interest to the millions who are earning good money in the informal sector.


While I see the minimum wage increase as being a good thing, I also think some will lose their jobs because of it. It's just the way things work.

[dtaai-maai]

1. An unskilled Issan worker is no different from an unskilled worker anywhere else...

Except that they're working from their family homes and have very low living costs which is very different from most of the workers in Hua Hin who have come from elsewhere and have to provide accommodation from those salaries.

This is not the issue, the issue is UNSKILLED and workforce's are all kinds of demographics and life stages.

It may not be the issue you were focusing on, but income v. cost of living must be a crucial issue to the unskilled worker in question. If it costs him/her twice as much to get by in HH, yet the salary is only, say, 30% higher.
I agree with Takiap that David makes a lot of valid points, particularly about basic infrastructure and facilities, but I also agree that we have to be realistic in the knowledge that none of that is going to change much in the next decade or so.
I'm probably being a bit over-simplistic here, and I'm certainly not referring to David in particular, but if I have to choose between the poorly educated, unskilled worker trying to get by on 230 baht per day and the employer (whether Thai or farang) trying, quite properly, to maintain a profit and improve a business, my sympathies would lean toward the worker.
Then again, I'm not a businessman!

[Takiap]

I agree DM. Unskilled workers here in Hua-Hin don't have much going for them simply because of the relatively high cost of living here.


I can of course understand David's comment about him wanting protection for his time and money investment, with regards to the training he provides to his employees, but this is an issue all employers face. They can provide endless training but that doesn't stop employees from leaving to go and work for a competing business. We see this happening in the oil and gas industry all the time. Drilling companies spend million on training courses and etc, and yet employees come and go all the time.


But, as with you DM, I too am not a business man, so I guess I don't really understand what people like Dave go through, especially over here in Thailand.

[STEVE G]

Yes, the issues with an unskilled workforce and lack of training are very valid points but surely a skilled worker is commanding a salary above the minimum wage already, in any country.
My only experience of Thai employment is from my partner taking on casual labour on the small farm she has and if you offer less than 200 bt nobody will turn up!

[ste860]

i agree with david here ,i too have people work for me ,and them leaving you in the lurch . By just not turning up or trying to set up in compition is a familiar story here
that i hear all the time from various friends with companies here

[David Nears]

Ste860 - Sadly it is all too common, thanks for your understanding and support, this is a complicated and important issue for consumers to understand.

Thanks for your comments
Some other things to consider,

Takiap - The oil industry workers do not go into business and compete against their employer they are employed by other companies so this is completely different as if they did they would have to set-up a company and abide by competition rules, therefore this is a different case entirely. Plus I think the oil industry can afford this small investment

We are training people who are allowed to compete in our market against us without contributing anything to the local infrastructure ultimately at the cost of growth of our environment. It actually promotes exploitation of the masses by hindering progress as they contribute to nothing but expect to use the common facilities of the country,

STEVE G - This is not about a minimum wage, this is about a 40% increase in wages, the BASE rate is now 240 but increases have now had to made across the board for experienced workers and long term employees to keep them from returning to the informal workforce, staff are also paid bonuses by companies as it is an expectation that at the end of the year they get a lump sum

dtaai maai - It is strange how people do this in this country, we seem to sympathise with the informal work force. In Scotland if someone came to my door offering services I would be apprehensive, I would be uncomfortable paying cash to this person. I would realise that I was doing something illegal and would understand that there is no protection and that ultimately the big cost is that there is no contribution to our society and they are a blight on it

People using these services are promoting this culture and really should not as it is supporting nothing and improving nothing

This is why there is rubbish everywhere as individuals have no ethics
This is why many companies will go bust and local government spending has no growth
This is why there is a lack of improvement in education and as Thai's working for companies learn a great deal about other things other than just the job itself there is education there
This is why there is such a huge class difference in Thailand
This is why the hospitals are so poorly stocked and run
This is why schools have less literature and equipment
This is why rescue workers have to look for donations
This is why westerners are less understood

I could go on and on but this must be considered EXACTLY the same as it is in the western countries, we simply would not do it as we ultimately know the masses suffer.

We are not big companies making massive profits, I now employ a large number of people, this part of my business will barely break even now and the other areas shall have to improve to make the company profits in order for me to make money, the costs go up but the government still wants the same amount of tax they were getting before if not more, the social security payments have now increased proportionatly

People really need to think about paying informal workers and the impact it has in general.

If the only motivation is cheap then so be it thats what we all get cheap cheap roads, schools, services. Thanks to all if this is what you want. It is not what I want! It is not what Hua Hin deserves

People think that using a western run company will be giving all the profits west, completely wrong. I and my wife are westerners, the others are all Thai and our company promotes Thailand, helps Thai people and is hugely beneficial for Thai people and Thailand in more ways you can imagine.

Informal workers are ONLY benefiting themselves, they could easily get work in a company

Consider this more before looking for the cheaper option

I want to see Hua Hin get better not go backwards, informal working should not exist except for the wealthy to exploit the poor and hinder progress

There is a much bigger picture to consider here,

[crazy88]

Some very good points from David and others. Interesting thread.

Some food for thought. Whilst I am not a cynic, where do you think the extra revenue generated in the form of income tax will go? Education? Health? Or?

Knowledge is power. Correct.Which is exactly why, throughout history, governments and the ruling classes have done their best not to let the masses have it.

Crazy 88

[STEVE G]

It is strange how people do this in this country, we seem to sympathise with the informal work force.

I think you have to keep in mind that if you go out into the Thai countryside where the majority of workers come from, there is no formal workforce. People get by on subsistance farming or working for day rates on other enterprises.
When that system gets replaced, as it has in many areas in the rice bowl of the Chao Phraya basin, it doesn't get replaced by a formal workforce, it gets replaced by mechanisation.
I know that in an ideal world all those informal workers should go out and get an education and become software engineers or whatever but that is not going to happen overnight. ( Also a Thai village has certain quality of life factors that I'm not sure will be so greatly improved when everyone has a job, a mortgage and a Mercedes on credit. )

[Spitfire]

There is a formal work force in the countryside, but it only really stretches as far as the government workers like cops/teachers/hospital types and political types that 'hand-out' contracts from the government for serving minions (which they have to pay large sums for) whilst whichever 'tin-pot-hat' local 'big-wig' is in favour etc for 4 years.

The rest are family-run businesse types that operate from their land or are farmers/builders/market traders/micro business practitioners etc that exist from their small holdings and supplement their income working for others with larger farms that need local workers.

I simply can't see how this new rule will affect any other than those in large cities, at factories or are semi-professional.

The colleges and universities where I am seem to be having an increased influx of students that want to study for their BA degrees at the weekend so they can profit from this new deal.

However, I've also read that many employers are now thinking that they will hire people that do not have BAs and only have a diploma, thus circumventing the rules, whilst mentioning that many of these students that have BA degrees in things like social studies, or an equally non-relevant subject, means nothing in the labour market of today. The employers say that if the student has a degree in engineering, accounting or something as useful as that then the minimum wage is fine, but they say there are huge numbers of graduates leaving colleges and universities with degrees that have little, if any, use in the modern labour market.

[buksida]

At least 10 per cent of the 2.2 million SMEs in the country - about 200,000 - would be forced to shut down or move out to other countries within half a year after the minimum wage was bumped up to Bt300 this month, a leading businessman has claimed.

"About 98 per cent of all companies will suffer from the higher wage as they are SMEs. Construction and security will be hurt the most since they have made advanced contracts for a job, but they have to increase their spending on staff," Bhumindr Harinsult, vice chairman of the Thai Chamber of Commerce, said yesterday.

The TCC reported that about 5.6 per cent of all SMEs - companies employing 1-25 workers - would go out of business and 5 per cent would relocate overseas, as they cannot shoulder the higher costs in this country following the government's policy to boost wages.

The higher wages would create difficulties for most enterprises as they would need to shoulder higher labour costs, but their return would remain unchanged.

According to the chamber's study, only 1 per cent of all companies would feel no pressure from the wage hike, and those are large firms with more than 500 workers. Bhunmindr said the higher wage policy - which did not get the nod of the tripartite wage committee but came from the government's propaganda during the general election - will scare off foreign direct investment.

FDI to Thailand would drop by 25 per cent from the average of Bt400 billion a year. Some foreign investors, particularly those in labour-intensive industries, would look at other countries in Asean with lower personnel costs.

The impact would be more severe early next year as the Bt300 wage hike is applied nationwide, he said.

The chamber urged the government to set up a fund to help SMEs in particular.

The fund may subsidise the cost of workers for SMEs for a period so that they have more time to adjust.

The government should also reduce regulations to facilitate trade and implement quickly the plan to improve the efficiency and productivity of companies, especially SMEs.

Thailand should also urgently develop its education system to improve human resource productivity along with the higher wages.

The chamber warned the government to carefully consider the wage hike policy in the future, as it will create a huge impact on all industries. The government should not use wage hikes to gain popularity during elections. Any policy to adjust wage costs should be based on a fair agreement among all stakeholders.

Agriculture is the biggest employer with 38.2 per cent of the country's workforce, followed by services with 24.7 per cent, industry with 20.7 |per cent and trading with 16.4 percent.

Source: The Nation

Thought: I think 10% is optimistic, there will also be a large percentage that will simply employ illegal Burmese and Khmer workers, resulting in higher unemployment for Thais.

[STEVE G]

There is another side to the coin though, in that it will pump a large amount of money into local economies so creating opportunities. It's bad for large companies but probably a good thing for small scale consumer enterprises as all that extra salary is largely going to get spent after all.
Personally I think it's perhaps better to be giving a bigger share of the economy to the man in the street instead of to fatcats in Bangkok.

[STEVE G]

At least 10 per cent of the 2.2 million SMEs in the country - about 200,000 - would be forced to shut down or move out to other countries....

Where are they going to go?


Wages rising rapidly across Asia to avoid unrest.

Businesses and governments across Asia are responding to the threat of labour unrest by pushing wages up with the result that double digit wage inflation is now the norm in most Asian economies.

Malaysia has become the latest country to introduce a minimum wage to tackle employee exploitation and fend off civil unrest. The new minimum wage has been set at 800 to 900 Ringitt a month (USD 250 to 280).

Thailand is planning a new minimum wage from next month of 300 baht per day (USD 9.20) which would push wages in some regions up by 40%. In other countries that already have a minimum wage, a wave of rises of between 10 and 20% have been going through.

There appear to be two forces at play. Firstly, Asian governments have looked on concerned at the collapse of governments in the Middle East and are eager to be proactive in introducing more rights for ordinary people before the the anger turns on them. Secondly, businesses are responding to customer pressure to improve working conditions. Recent protests in the US against Apple for the way its Taiwanese-based supplier Foxconn was treating workers has led to significant wage rises in Foxconn’s Chinese factories.

Other recent wage rises include
- Beijing: monthly minimum up 8.6% to RMB 1260 (USD 188) in January
- Shenzhen: monthly minimum up 14% to RMB 1500 in February
- Tianjin: monthly minimum up 13% to RMB 1310 from April
- Indonesia: minimum wage up 20% last month

In Singapore, a clamp down on foreign workers entering the country has been imposed with the aim of pushing up the market value of local labour.
http://asianbusinessdaily.com/2012/03/w ... id-unrest/