It is increasingly common to see signs identifying building materials written in the Myanmar or Khmer languages as well as Thai at construction sites. This does more than reflect the nationality of labourers working at the sites. It shows their willingness to work due, in large part, to anticipation of the nationwide enforcement of the 300-baht minimum wage next month. But the estimated 2 million migrant workers employed legally in this country should not set their hopes too high because some might be disappointed. It would be a shame if this were allowed to happen.
While approval of a populist measure for low-income Thai earners is one thing, making sure it is observed and paid to an effectively disenfranchised minority of non-Thais is quite another. That is why the government needs to make it clear that legal migrant workers are entitled to this increase in the basic wage along with their fellow Thai workers and that employers ignoring this will be punished. Not only do foreign migrant workers comprise 7% of the workforce, they are prepared to do the dirty and backbreaking jobs that others are not.
Unlike their Thai counterparts, their options if cheated are very limited, perhaps not in theory but certainly in practice. They are subject to every whim of a giant bureaucracy designed to make their lives difficult and block changes of employment. This can lead to the temptation to work under the radar, a path that guarantees exploitation, misery and police harassment. Creating such a bureaucratic obstacle course is a short-sighted approach because competition for labour can only increase.
Unscrupulous operators in the industrial and construction sectors have exploited loopholes to avoid paying the minimum wage before and will do so again. They know how few inspectors the Labour Ministry has to make spot checks. Semi-skilled foreign workers are also coming under pressure from their home countries to return and help build much needed infrastructure, largely created by the regional boom in tourism and the launch of major engineering projects.
Cambodia is already suffering from a labour shortage, Laos is at an important stage in its development and Myanmar anticipates a construction and infrastructure boom as it prepares to catch up with its neighbours and deal with the flood of requests from foreign franchises. This raises the alarming prospect that when the Asean Economic Community takes effect at the end of 2015, this country, already at full employment and with huge projects getting under way, will face a chronic labour shortage with the demand for semi-skilled human resources greatly outstripping supply. It is a prospect that is giving the construction, garment and fish processing industries waking nightmares.
It is clear that the nationwide minimum wage increase will mean that businesses have to change the way they operate if they are to survive. The era of cheap labour, low productivity, outdated technology and lack of investment is coming to an end. Businesses can either embrace new technology, investment in skills training and fairer deals for their workers or they can embrace eventual bankruptcy. The choice is theirs.
Although not all of the increased costs can be passed on to the consumer, a rise in food prices and jump in the cost of living usually follow a nationwide increase in the minimum wage. Government inspectors will need to be vigilant and out in full force to monitor these increases and ensure that business owners do not fall back on their bad old ways of rounding up foreign migrant workers and then sabotaging the new minimum wage by forcing them to work at cut-price rates.