The 300 baht minimum wage policy the Pheu Thai Party campaigned on which has been implemented across the country since Jan 1 is one of the most contentious issues in Thailand today. On the one hand, there are those who say it will be a death knell for many labour-intensive businesses and force investors to look to neighbouring countries to set up new operations. Then there are those who point out that as the cost of living rises, the lower economic sectors are getting squeezed the hardest, and there has not been a significant minimum wage increase for a very long time.
Much of the difficulty with implementing the policy has to do with the fact that it is a relatively large increase to impose suddenly, and it also puts pressure on employers to raise wages across the board, as more skilled employees expect to earn more than inexperienced new hires. At the end of the day, however, it's hard to defend the assertion that 300 baht is too much for a full day's work. The fact is that the 300 baht minimum wage has been signed into law and backing away from it now would be disastrous in terms of social discontent and erosion of trust in government.
Therefore a report in yesterday's Business section, "Central Trading uses lean manufacturing" was encouraging. The report says that over the past two years, Central Trading Co, which manufactures mostly brand name jeans, increased workers' daily average wages from 215 baht to more than 400 baht per day through projects initiated by the Industrial Promotion Department maximise efficiency and ensure that raw materials are utilised properly. Suphot Phawachittranon, assistant vice-president for production, said: "Two years ago employees did not know how to use raw materials efficiently and also lacked teamwork skills." The greater efficiency has resulted in lower production costs, which has enabled the company to raise wages.
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