Daily minimum wage rise to 300 baht | Bangkok Post: learning

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Daily minimum wage rise to 300 baht

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With 40% hike 9 million workers benefit but 6.7% mostly SMEs will go out of business plus reduced international competitiveness. 

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Wage hike guaranteed, FTI says B300 daily minimum to sink firms by Nareerat Wiriyapong


The Pheu Thai Party is adamant that it will increase the minimum wage to 300 baht a day nationwide - 40-90% above current levels - by January, while academics and businesses have warned of adverse impacts on the overall economy.

Suchart Thada-Thamrongvech, head of the Pheu Thai economic team and a former finance minister, said that even though the party had yet to decide whether to lift wages in one move or gradually, it was committed to the plan that it says will benefit 9 million workers.

"Nowadays, the majority of Thai companies are paying wages of more than 300 baht. Consequently, I don't think our planned wage hike will seriously affect them," he said yesterday

This is our wealth distribution strategy for factory workers to have a better life. These workers will be able to buy goods manufactured from the company they work for and afford better food.

Dr Suchart also brushed aside possible impacts of the wage hike on rising inflation, saying inflation had been driven mainly by oil prices to date.

Tanit Sorat, vice-chairman of the Federation of Thai Industries (FTI), called the wage promise a "disaster."

An FTI survey a few months ago found the wage increase would force 6.7% of its members out of business, with 42% to be affected seriously and 37% moderately. At present, Bangkok's average daily minimum wage is 215 baht.

The official minimum wage ranges from 159 baht a day in Phayao to 221 baht in Phuket.

Dr Tanit said that only large corporations were paying more than 300 baht a day. He believes a large number of small and medium-sized companies would be in big trouble if the minimum wage was raised to the level pledged by Pheu Thai.

"The [new] government should be the one to pay, not businesses," he said.

In the future, I foresee other parties offering higher minimum wages, like 500 baht, to outdo Pheu Thai.

At current wage levels, many Thai products are still competitive internationally, but just barely, against those made by major rivals such as Vietnam, Bangladesh and Indonesia. Vietnamese wages are much cheaper than those in Thailand, he added.

Pheu Thai is also proposing to cut corporate income tax to 23% from 30% so companies can afford to pay higher wages, but Dr Tanit feels the tax cut is inadequate compensation.

Charl Kengchon, managing director of Kasikorn Research, said a minimum wage of 300 baht could push inflation to skyrocket and prompt the Bank of Thailand to raise interest rates even more than currently projected.

This means companies will face the double impact of rising costs driven by higher wages and interest rates, said Dr Charl.

"A wage hike by 40% at once is too high for Thai companies to adjust to rising costs," he said. "It doesn't mean that we disagree with a rate hike, but the government should carefully look at inflation and make sure labour productivity increases accordingly."

A large wage hike might be enough incentive for workers to move from farming to industrial and service sectors.

Pheu Thai's planned budget of 1.8 trillion baht for five years under its pro-growth strategy is already adding pressure on inflation, even as it plans to spend more off-budget, added Dr Charl.

(Source: Bangkok Post, Wage hike guaranteed, FTI says B300 daily minimum to sink firms, 6/07/2011, Nareerat Wiriyapong, link)
 
Economics Vocabulary

wage - an amount of money that you earn for working, usually according to how many hours or days you work each week or month ค่าจ้าง
wage hike - wage increase
lift wages - increase wages

minimum - smallest possible amount
daily minimum - the smallest possible amount per day

guarantee - promise that they will do something, for sure

business failure - when a business stops operating and ends its existence, "a company ceasing operations following its inability to make a profit or to bring in enough revenue to cover its expenses. A profitable business can fail if it does not generate adequate cash flow to meet expenses" (See Wikipedia)

sink - to (cause something or someone to) go down below the surface or to the bottom of a liquid or soft substance จม
sink firms - cause businesses to sink like ships (cause businesses to fail)

wealth
- how much money and assets a person or country owns ทรัพย์สมบัติมากมาย
wealth distribution - how different families have different amounts of money (wealth) in an economy

income distribution - how a country's total income economy is distributed amongst its population (either equally or unequally) (See Wikipedia)
income inequality -
how big the differences in income (and therefore wealth) are between different groups in a society (See Wikipedia)

strategy
- a plan to achieve long term goals ('strategy' gives the big picture, 'tactics' the details)
afford - to have enough money to be able to pay for something มีเงินพอจับจ่าย ซื้อหา

inflation - the level of prices rising in the economy as a whole (See Economist Glossary) ภาวะเงินเฟ้อ
pressure
- a force causing change
pressure on inflation - changes in the economy that could cause inflation to increase

go out of business - when a business fails
force out of business - when some event causes a business to fail

corporations - a large company (registered with the government as separate legal entity, owned by many shareholders) (See Wikipedia)
small and medium-sized companies - same as "SMEs"

income - money that people receive from work or some other source, used for household consumption and savings
corporate income tax - the tax that corporations pay on money the money they earn (revenue, income)

competitive - can produce goods at a lower price and higher quality than other companies มีการแข่งขัน
competitive internationally - can produce goods at a lower price and higher quality than other companies in other countries

rivals - opponents; people you are fighting or competing against; people you are competing with to achieve something that not everyone can have คู่แข่ง, คู่อริ

inadequate - not enough, or not good enough for a particular purpose อย่างไม่เพียงพอ
compensation - money paid for damage or loss caused การจ่า่ยเงินชดเชย
inadequate compensation - not giving enough money for something

skyrocket - to increase very quickly ลอยขึ้นสูงอย่างฉับพลัน
prompt - to cause something to happen or be done ก่อให้เกิด, กระตุ้น (example: His hunger prompted him to eat a sandwich.)

interest - payments made for the use of another's money for a period of time
interest rates - the percentage of the amount borrowed paid per year (as the cost of borrowing)
rate hike - interest rate increase

projected - the amount that experts believe (forecast) for the future; expected, forecast
impact - an effect or influence ผลกระทบ

productivity - producing more with the same amount of inputs (labour, energy, capital, etc) การผลิตสินค้า
labour productivity - workers producing more goods in the same amount of time 

incentive - reward to make people do something, something that makes you want to do something or work harder, because you know that you will benefit by doing this สิ่งกระตุ้น
budget - the amounts of money that an organisation has available to spend on different things during a period (See Wikipedia) งบประมาณ

General Vocabulary

adamant that - determined to do something (will do for sure)  ยืนกราน
nationwide - throughout a whole country ทั่วทั้งประเทศ
current - of the present time ปัจจุบัน
academics - professors and lecturers at universities and colleges
party
- political party (here: Pheua Thai)

adverse - having a negative or harmful effect on something ในทางลบ, เป็นผลร้าย
impacts - effects on different people and things

committed - promised (a sure thing)
benefit - to help someone มีประโยชน์ต่อ
majority - more than 50 percent of a group  ส่วนมาก เสียงส่วนมาก ส่วนใหญ่

brushed aside - say or treat something as not important, not spend much time with it

disaster - something very bad that happens and causes a lot of damage ความหายนะ, ความหายนะ ภัยพิบัติ

survey - gathering information about what people think about different subjects (public opionion) by asking large numbers of people questions and counting their answers, and then using statistics, graphs, and tables to present results (See Wikipedia) การสำรวจความเห็น

official - approved by the government or some authority ที่เป็นทางการ

pledged - seriously promised to do something สาบาน
foresee - see and expect that something that will happen in the future
parties - people or companies entering into a business arrangement or deal
outdo - do better than, to do more than

barely - almost not true; almost not happening แทบไม่เคยเกิดขึ้น

double - to become twice as big, twice as much or twice as many เพิ่มเป็นสองเท่า
adjust - to change something slightly, especially to make it more correct, effective, or suitable ปรับ

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