Government aid readied for SMEs as 300-baht wage causes 2,500 layoffs | Bangkok Post: news

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2,500 jobs axed as daily wage hike bites

Cabinet okays package to help 300,000 SMEs

Almost 2,500 workers were laid off in the first five days after the 300-baht daily minimum wage was enforced nationwide on Jan 1, Labour Minister Padermchai Sasomsap says.

The minister's remark came on the same day that the cabinet approved a package it claimed would ease the strain on the almost 300,000 small- and medium-sized enterprises (SMEs) and create about 320,000 new jobs.Mr Padermchai quoted the Social Security Office (SSO) as reporting that 2,479 workers were laid off from Jan 2 to 6 after the wage increase took effect.The 300-baht minimum daily wage had already been in effect since last April in seven pilot provinces, including Bangkok. There were 243,141 workers laid off from April to December last year, the minister said.The cabinet Tuesday approved a package to ease the wage strains.Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said the package involves:- Corporate tax exemption for the first 300,000 baht of profit, up from 150,000 baht for SMEs with revenues of less than 30 million baht a year.About 210,000 SMEs will benefit from this measure while the government is expected to lose 2.8 billion baht a year.- A reduction in the tax paid by small-and medium-sized hotels from 80 baht per room to 40 baht per room for three years. This measure will cost the government some 14.16 million baht a year.- An increase in the budget for civil servant training to match the current economic situation. Job training and seminars held by state agencies are typically organised in provincial hotels.- The extension of measures already in place in the seven pilot provinces.These measures will be extended until Dec 31 this year across all provinces.Among those measures is the Social Security Fund (SSF), which is providing 10 billion baht in soft loans to boost the liquidity of SMEs.Other measures include: reducing employers' contributions to the SSF from 5 per cent to 4 per cent; tax deductions of 1.5 times that of wage hike payments; soft loans from the SME Bank; and guaranteed loans from Thai Credit Guarantee Corporation.Mr Kittiratt said the cabinet also authorised the Finance Ministry to study the feasibility of cutting the...

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Your comments

  • flooding

    ThailandPost : 16

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    Discussion 42 : 09 Jan 2013 at 23.2342

    It is more than 2500 for sure. They are many organisation which can coordinate and close without conflict with workers. These are not registered at the labour ministry. In actuality most organisations closing down is away from Bangkok. This can be seen that 300 Baht wage increase is effecting less richer areas. Industrialization is now going down in ISAAN where jobs are needed the most. Jobs are being created only in Eastern Seaboard today and where there is a huge labour shortage and area is richest. 300 Baht nationwide is a not a well thought as the result seen in the last five days, uneven distribution of wealth.

  • swangtal

    ThailandPost : 6

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    Discussion 41 : 09 Jan 2013 at 22.2041

    @bobby2000
    Bangkok based businesses (basically ones that are tied to greedy rich people) already pay more than 300THB a day, simply because they exists in area with higher cost of living.
    However, the small businesses like food packaging plants, garment factories, etc, that are located outside of larger cities--those are the ones that are truly affected. They didn't have to pay high wage because the cost of living there is so small (if you simply cannot live on the wage being paid, no one will work there to begin with). What we now end up with is those smaller factories are pushed to extinction, and cost of living is rises everywhere.

  • blobber

    ThailandPost : 305

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    Discussion 40 : 09 Jan 2013 at 20.5540

    Discussion 26
    Eric you basically admitted earlier to paying low wages while you made your money. Now you complain about people doing the same.
    Pot meets kettle.

  • boons

    United StatesPost : 661

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    Discussion 39 : 09 Jan 2013 at 18.5039

    D36> "Thailand is most certainly nothing like Spain or Greece or anything like this hysterical scare mongering. "

    I beg to differ. Thailand is dismantling it's successful export economy in favor of an unsustainable credit/debt fueled economy. The argument of what "should" be entitled is rapidly overtaking the argument of what can be afforded. Short term economic incentive programs and social spending are covering up for disastrous fiscal policy by creating a temporary rush of liquidity. Core businesses of manufacturing and agriculture are now "sunset" industries. All this as global demand falters. What can't be sustained won't be.

  • donduck

    ThailandPost : 119

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    Discussion 38 : 09 Jan 2013 at 18.1138

    jacksprat, are you saying Shinawatra-connected companies are paying less than 300 baht per day as wages? If so, please give an example or two. If not, what ARE you struggling to say? To my knowledge, Shinawatra family-connected companies are pretty good places to work, in pay, benefits and employee morale. Do you hear differently, that they do not give a decent wage for a decent day's work? Any examples of this?

  • tamsin

    ThailandPost : 115

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    Discussion 37 : 09 Jan 2013 at 17.5437

    @Disc 17 : I hardly think a living wage could be called a 'giveaway'. And the majority of Thai voters earn less than that anyway.

    As another sensible poster pointed out, when setting up a business wages must of course be factored in. If your profit margin won't cover this then you shouldn't think of starting a business.

  • Wester

    ThailandPost : 3

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    Discussion 36 : 09 Jan 2013 at 17.5036

    Thailand is most certainly nothing like Spain or Greece or anything like this hysterical scare mongering. Thailand has a manufacturing base and sovereign control of their banking system which the EU countries do not.

  • jacksprat

    ThailandPost : 2,445

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    Discussion 35 : 09 Jan 2013 at 17.4535

    "This country is in serious need of redistribution of wealth!" And surely the very wealthy Shinawatra family will provide an good example by sharing their billions with those less fortunate.

  • boons

    United StatesPost : 661

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    Discussion 34 : 09 Jan 2013 at 16.4034

    D27 - France has significantly higher levels of unemployment (10%+ by official statistical reports) than the United States, Russia, Japan, Brazil, England and of course, Thailand. How can one propose employment policy when that policy has clearly failed? That is not "democracy". That is empirically foolish.

  • spiceman

    United StatesPost : 3,475

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    Discussion 33 : 09 Jan 2013 at 15.3433

    This thing is turning out to be a giant income redistribution scheme from mostly the middle class to the business owners and the poor. So, I think either higher taxes or more borrowing or both have to take place in order to make ends meet. Thailand is looking more and more like Greece, Spain, and the USA every single day!

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