From poverty to the lower middle class in Thailand
- Published: 16/09/2010 at 11:51 AM
- Online news:
Construction and factory work are typical paths from poverty to the lower middle class in Thailand. Economist Sethaput Suthiwart-Narueput uses research findings to explain how it works.
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This is the first part of a long article. Read the whole article here.
Climbing the income ladder in Thailand [Part I] by Sethaput Suthiwart-Narueput
Over the past 10 years, Gross Domestic Product has grown by nearly 50% in real terms (i.e. adjusted for inflation). By contrast, real wages have pretty much been flat, increasing by only about 2%.
If you are in a job where your wages are not increasing much, what will you do? You will probably try to change jobs. Do the same job at a different company. Or try to get promoted to a different job.
Things are no different in the economy. Incomes in Thailand have a clear occupational and regional bent. Farmers make less than everyone else, while professionals and entrepreneurs tend to make the most.
People in the Northeast make less than people elsewhere, while those in Bangkok make the most. People therefore try to increase their incomes by changing jobs or moving.
We use socio-economic survey data covering over 43,000 households to construct a stylised picture of how a person may hypothetically be able - or unable - to climb the income ladder in Thailand by moving and changing jobs.
At the bottom of the income ladder is the farmer in the Northeast. Let us call him Khun Sompong.
By moving off the farm and taking a job in construction but still in the Northeast, Khun Sompong can increase his income by over 40%. But if he moves to work in construction in Bangkok, he can more than double his income. (Of course, his expenses are also significantly higher).
If he develops enough skills to work in a factory in Bangkok, he can earn about 30% more than he could in construction. As a fallback, if he knows how to drive, he could also work as a taxi driver, although that pays a bit less.
As a factory or service worker in Bangkok, he can earn about 3-4 times what he would earn back on the farm in the Northeast.
But his average household income would still only be about 8,000 or 9,000 baht per month.
income - money that people receive from work or some other source, used for household consumption and savings รายได้
climbing the income ladder - when a person increases their earnings during their life (hopefully providing a better future for their children through education and family business)
Gross Domestic Product - GDP, a measure of economic activity in a country, the value of the country's output of goods and services. GDP is defined roughly as: GDP = Household Consumption + Business Investment + Change in Inventories + (Government Spending - Taxes) + (Exports - Imports) (See Economist Glossary)
real - reducing amount by inflation (economy-wide rise in price level) to get a more realistic amount
nominal - the amount before it has been reduced (or "adjusted") to take inflation
X in terms of Y - X measured or explained using Y
in real terms - amount reduced by inflation (to get a more realistic view)
inflation - the level of prices rising in the economy as a whole (See Wikipedia and The Economist Glossary) ภาวะเงินเฟ้อ
contrast - a noticeable difference when two things are compared ความแตกต่าง
by contrast,... - now looking at something quite different,...
wages - the amount of money earned per hour by a worker สินจ้าง
promote - move employee to a higher position in an organization เลื่อนตำแหน่ง
clear - easy to understand
occupation (noun) - (formal) a job
bent - a tendency towards some behaviour or activity
incomes have an occupational and regional bent - incomes depend on what job a person does and what area of the country they come from
entrepreneurs - business people เจ้าของกิจการ
tend - to be likely to behave in a particular way or have a particular characteristic มักจะ
socio-economic - having to do with economics and the structure of society (poor vs. rich powerful classes)
survey - gathering information about what people think about different subjects by asking large numbers of people questions and counting their answers, and then using statistics, graphs, and tables to present results (See Wikipedia) การสำรวจ
data - facts or information used for making calculations or decisions ข้อมูล
households - families or groups of people living together (economics treats this as a unit) ครัวเรือน
construct a stylised picture - make a simple description or explanation that simplifies how something works (highlights the core or essential parts), a model
hypothesis (noun) - an idea that attempts to explain something but has not yet been tested and proven correct
hypothetically,... - putting forth as a hypothesis,...
construction - the work of building or making something, especially buildings, bridges, etc. การก่อสร้าง
double - to become twice as big, twice as much or twice as many เพิ่มเป็นสองเท่า
significantly - in an important way อย่างสำคัญ
skills - a type of work or task requiring special training and knowledge ทักษะ ความสามารถเฉพาะทาง
Sethaput Suthiwart-Narueput is with the SCB Economic Intelligence Center (EIC). The views expressed here are his own and not necessarily those of SCB or its affiliates. Email email@example.com
(Source: Bangkok Post, Opinion, Climbing the income ladder in Thailand [Part I] by Sethaput Suthiwart-Narueput, 15/09/2010, link)
About the author
- Writer: Jon Fernquest
Position: Assistent Manager Educational services