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Countdown to minimum wage hike

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Such a huge jump in the minimum wage has never happened before & many are worried what will happen. 

protest

Activists labour for government action. About 1,000 labour activists rally outside Government House yesterday demanding the Pheu Thai-led administration honour its promise to immediately raise the minimum daily wage to 300 baht across the country. They brought with them a cut-out of Prime Minister Yingluck Shinawatra. (Photo: Chanat Katanyu).

Click button to listen to Wage Hikes Should Go Slowly to download

The wisdom of going slow

Academics, employers warn of dangers lurking in rapid wage hike
9/03/2012
Parista Yuthamanop

To Ratana Bualoi, who works at a stage organising company, the minimum-wage increase to 300 baht per day in April makes him uneasy, although he agrees it should increase.

"Workers should earn more than the existing minimum wage, as things are getting more expensive," he said. "But it would be a problem if the wage suddenly jumps to 300 baht and I cannot increase contract fees."

Mr Ratana proposed the wage increase incrementally and employers raise other forms of compensation such as bonuses. He expects some factories might lay off workers when the wage hike takes effect.

A Labour Ministry study reported an average increase of 6.4% in the minimum wage last year, up to 176 baht per day, which ate into the margins of small and medium-sized enterprises (SMEs) by 3%, or 1.35% across all sectors. The ministry estimates workers need 187 baht per day to subsist.

The study found the minimum wage accounted for 0.1% of total labour cost, which formed 13.7% of the country's total manufacturing cost. Unskilled labour was concentrated in the textile industry where it accounted for 0.15% of that sector's labour cost.

The ministry cited the Bank of Thailand as calculating every 1% increase in the minimum wage will result in a 1.3% system-wide wage increase.

The government will implement its key election pledge gradually by increasing the minimum wage by 40% across the country in April, pushing the minimum wage to 300 baht per day in seven provinces - Phuket, Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan and Samut Sakhon

It remains committed to increasing the minimum wage to 300 baht per day across the country by April next year

While the wage hike should benefit the country's 17 million salaried employees, it neglects the 21 million day labourers that are part of the informal economy.

Sethaput Suthiwart-Narueput, an independent economist, said nearly half of the 11.5 million workers who earn less than 300 baht a day were employed by SMEs with less than 10 workers. He expects the wage hike, which will raise monthly salaries to roughly 7,800 baht, to have a far-reaching impact on businesses.

Currently, labourers with a primary education earn 5,100 baht per month, while those completing the first three years of secondary education make 6,100 baht. The minimum wage hike to 300 baht is an increase of 50% and 30%, respectively, for those two groups.

Around 75% of workers in the manufacturing, agricultural, construction and trade sectors make less than 300 baht a day.

Dr Sethaput added he found gaps in the implementation of the minimum wage as average wages in 39 provinces are currently below the minimum wage. The minimum wage needs to rise more rapidly than in the past because it lagged inflation from 1997 onwards, he noted, but said local firms need more productivity to earn a higher margin to pay the higher wages.

"While I agree the minimum wage should be increased, 300 baht is too big a jump too soon. There is a large number of people who are currently paid less," he said.

SMEs are likely to be most affected by the wage hike. Layoffs would push labour into informal work, making improvements in productivity less likely. Thai labour productivity increased by 23% from 1995 to 2007, compared to 31% in Malaysia, 51% in Taiwan and 77% in Vietnam, said Dr Sethaput.

He called for parallel government policies to improve productivity and increase minimum wages. 

Narong Petprasert, a political science lecturer at Chulalongkorn University, acknowledged inflation had surpassed minimum wage gains, so he called on the government to curb rises in consumer goods prices.

He said the National Statistics Office's employment survey criteria is flawed as it measures anyone as employed that works one hour per week.

The Bank of Thailand, in the October issue of the Inflation Report, projected the minimum wage would increase by 40% in April and civil servants' salaries would rise by 30% to 15,000 baht per month, accelerating inflation slightly. Inflation, as measured by the Ministry of Commerce's consumer price index, was expected to increase by 0.2% this year as a result of the policy. The government's rice mortgage policy is expected to hike inflation by 0.7%.

Thaveekij Jaturajareenkul, vice-chairman of the Federation of Thai Industries, said large firms could likely invest in neighbouring countries with lower wages if they disliked the wage hike. He added the government has not prepared any assistance measures in tandem with the wage increase.

(Source: Bangkok Post, The wisdom of going slow, Academics, employers warn of dangers lurking in rapid wage hike, 9/03/2012, Parista Yuthamanop, link

Minimum Wage Vocabulary

minimum-wage - the smallest amount of money that can legally be paid to a worker for an hour's or a day's work (See Wikipedia)

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 - increase in the daily or hourly amount of money (wage) paid to workers
rapid wage hike - fast wage hike

countdown - the period of time just before an important event (example: the new year's eve countdown)

activist -
someone who takes part in activities to create social or political change (See Wikipedia)
rally - a large public gathering of people to support someone or to protest against something การชุมนุม การชุมนุมประท้วง  เดินประท้วง  รวมตัวกันเพื่อสนับสนุน หรือประท้วง

administration
- one government that a country has for a period of time
honour a promise - to do what you promised to do ทำตามสัญญา

immediately - happening right after something else with no delay; right away ทันที
cut-out - paper cut in the shape of a person or thing (made to look like them)

wisdom - knowledge gained over a long period of time from experience

The wisdom of going slow

academics - people who teach and do research in universities, professors and lecturers
employers - companies that hire workers
lurking - wait secretly, planning to do something bad ซุ่ม ซ่อน หลบอยู่
rapid - happening quickly อย่างรวดเร็ว
dangers lurking - dangers that might happen soon
dangers lurking in rapid wage hike

Academics, employers warn of dangers lurking in rapid wage hike

stage - to organise and event ทำการเปลี่ยนแปลง ปฏิวัติ
stage organising company - a company that organizes events on the stage (like concerts) (?)
makes him uneasy -
makes him feel uncomfortable (like something bad is about to happen)

To Ratana Bualoi, who works at a stage organising company, the minimum-wage increase to 300 baht per day in April makes him uneasy, although he agrees it should increase.

contract - a written (or oral) agreement that is legally binding สัญญา
fees - money that you pay to be allowed to do something ค่าธรรมเนียม
contract fees - the amount of money they charge customers (for the services they provide under a long-term contract)

"Workers should earn more than the existing minimum wage, as things are getting more expensive," he said. "But it would be a problem if the wage suddenly jumps to 300 baht and I cannot increase contract fees."

proposed - when a person says or suggest what should happen (decision not made yet)
increase
incrementally - increase by steps (a little bit at one time, one step)
compensation - money or other benefits that an employee receives for the work that they do
bonuses - money employees get at the end of the year for good performance เงินโบนัส
lay off - lose a job because the company has no more work (not "fired"which means lost job because did something wrong)

Mr Ratana proposed the wage increase incrementally and employers raise other forms of compensation such as bonuses. He expects some factories might lay off workers when the wage hike takes effect.

ate into the margins - decreased profits
enterprises - companies
ministry - a government department dealing with an area of activity กระทรวง
estimates - guesses of what the size, value, amount, cost, etc. of something might be การประมาณค่า
subsist (verb) - the smallest amount of things (money, food, clothes, etc) that a person or family needs to survive and pay for the things they need each day
subsistence (noun)  

A Labour Ministry study reported an average increase of 6.4% in the minimum wage last year, up to 176 baht per day, which ate into the margins of small and medium-sized enterprises (SMEs) by 3%, or 1.35% across all sectors. The ministry estimates workers need 187 baht per day to subsist.

concentrated - most of it is located in one place or small area มุ่งความสนใจไปยัง
cited - mentioned as an example, explanation or proof of something else กล่าวถึง

The study found the minimum wage accounted for 0.1% of total labour cost, which formed 13.7% of the country's total manufacturing cost. Unskilled labour was concentrated in the textile industry where it accounted for 0.15% of that sector's labour cost. The ministry cited the Bank of Thailand as calculating every 1% increase in the minimum wage will result in a 1.3% system-wide wage increase.

implement - put a plan into action, make a plan work นำมาใช้ นำ แผนหรือนโยบายมาปฏิบัติ
key - important คนสำคัญ
election - the process of choosing a person or a group of person for a position, especially by voting elect (v) electoral (adj) synonym: the polls การเลือกตั้ง
pledge - to make a serious promise to do something สัญญา
election pledge - something that a politician promises to do if they are elected
key election pledge -
an important election promise
implement key election pledge - actually do what was promised in the election

The government will implement its key election pledge gradually by increasing the minimum wage by 40% across the country in April, pushing the minimum wage to 300 baht per day in seven provinces - Phuket, Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan and Samut Sakhon

committed - loyal and willing to give your time and energy to something that you believe in
remains committed
benefit - to get help or an advantage from something ผลประโยชน์
salaried employees - employees with permanent jobs at larger companies who get a monthly amount of money (salary) usually larger than daily wage earners
day labourers - people who are given temporary work and paid by the day (not a permanent job at a big company), informal sector workers
informal economy -
the economy with jobs that are not permanent (example: construction work for a period of time)

It remains committed to increasing the minimum wage to 300 baht per day across the country by April next year . While the wage hike should benefit the country's 17 million salaried employees, it neglects the 21 million day labourers that are part of the informal economy.

informal - not official
independent - free from outside influence เป็นอิสระ not taking help or money from other people พึ่งตนเอง
independent economist
employed
- to have a paid job
impact - an effect or influence from some change ผลกระทบ
far-reaching impact - a big effect from some change

Sethaput Suthiwart-Narueput, an independent economist, said nearly half of the 11.5 million workers who earn less than 300 baht a day were employed by SMEs with less than 10 workers. He expects the wage hike, which will raise monthly salaries to roughly 7,800 baht, to have a far-reaching impact on businesses.

primary - first and most important
primary education - the first years of education (Pathom in the Thai education system) (See Wikipedia)

Currently, labourers with a primary education earn 5,100 baht per month, while those completing the first three years of secondary education make 6,100 baht. The minimum wage hike to 300 baht is an increase of 50% and 30%, respectively, for those two groups.

construction - the work of building or making something, especially buildings, bridges, etc. การก่อสร้าง
trade - the buying and selling of goods การค้าขาย

Around 75% of workers in the manufacturing, agricultural, construction and trade sectors make less than 300 baht a day.

implementation - making a plan into reality; actually do or carry out a plan; execution of a plan, the process of making something such as a plan, system, idea or law start to work and be used การบังคับใช้ (กฎหมาย) (See glossary) นำ (แผนการ) มาบังคับใช้
wages - the amount of money earned per hour by a worker
lag - go slower than others
inflation - the level of prices rising in the economy as a whole ภาวะเงินเฟ้อ
lagged inflation - increase slower than inflation is increasing
productivity - producing more for the same amount of resources (labour, capital, machines)
earn a higher margin - make more profit
informal work - work in the informal sector, temporary work that pays less

Dr Sethaput added he found gaps in the implementation of the minimum wage as average wages in 39 provinces are currently below the minimum wage. The minimum wage needs to rise more rapidly than in the past because it lagged inflation from 1997 onwards, he noted, but said local firms need more productivity to earn a higher margin to pay the higher wages.  "While I agree the minimum wage should be increased, 300 baht is too big a jump too soon. There is a large number of people who are currently paid less," he said. SMEs are likely to be most affected by the wage hike. Layoffs would push labour into informal work, making improvements in productivity less likely. Thai labour productivity increased by 23% from 1995 to 2007, compared to 31% in Malaysia, 51% in Taiwan and 77% in Vietnam, said Dr Sethaput.

parallel - of an event or situation that happens at the same time as and/or is similar to another one คล้ายกัน ขนานกัน
parallel government policies - different government policies that are happening at the same time 
improve - to make better ทำให้ดีขึ้น
improve productivity - produce more with the same inputs

He called for parallel government policies to improve productivity and increase minimum wages. 

curb - stop or reduce ลดหรือยุติ
consumer - someone who buys and uses goods and services ผู้บริโภค
consumer goods - goods that households buy everyday (food, gasoline, clothing, etc)
curb rises in consumer goods - stop or reduce rises in the things that people buy everyday

Narong Petprasert, a political science lecturer at Chulalongkorn University, acknowledged inflation had surpassed minimum wage gains, so he called on the government to curb rises in consumer goods prices.

employment - having a paid job
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
employment survey
criteria - a standard that is used for judging something or for making a decision about something บรรทัดฐาน  (See glossary)
flawed - has mistakes, defects, and imperfections; spoiled by something มีข้อบกพร่อง
employment survey criteria
employment survey criteria is flawed

He said the National Statistics Office's employment survey criteria is flawed as it measures anyone as employed that works one hour per week.

measures - actions taken to solve a problem มาตรการ
issue - to officially announce or give out ออก, ออกประกาศ, ออกคำสั่ง
October issue of the Inflation Report
projected - expected, forecast; the amount that experts believe for the future
civil servants - permanent government workers
accelerating - happening at a faster rate เร่งให้เร็วขึ้น
accelerating inflation slightly
consumer price index (CPI) -
used to measure the inflation that households and individuals buy in stores everyday (See Wikipedia)
expected - believe will happen คาดว่า (จะเกิดขึ้น)
policy - a plan of action to guide decisions and achieve outcomes (See Wikipedia) นโยบาย
rice mortgage policy - the government's policy of keeping rice prices high even when they are falling (rice price support)

The Bank of Thailand, in the October issue of the Inflation Report, projected the minimum wage would increase by 40% in April and civil servants' salaries would rise by 30% to 15,000 baht per month, accelerating inflation slightly. Inflation, as measured by the Ministry of Commerce's consumer price index, was expected to increase by 0.2% this year as a result of the policy. The government's rice mortgage policy is expected to hike inflation by 0.7%.

assistance - help (given to someone)
assistance measures - doing things to help people (who need help)
in tandem with -
together with

Thaveekij Jaturajareenkul, vice-chairman of the Federation of Thai Industries, said large firms could likely invest in neighbouring countries with lower wages if they disliked the wage hike. He added the government has not prepared any assistance measures in tandem with the wage increase


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