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Change minimum wage system?

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The tripartite minimum wage system began just before the 1973 political uprising, meets ILO standards but has an employer bias.


Photo above of  peaceful demonstrators at Victory Monument on Labour Day 2008.

Read a previous detailed analysis of the minimum wage law from the Bangkok Post here.

For more information on the topic of labour rights see Wikipedia's Organized Labour Portal.

Click button to listen to Change in Minimum Wage Process to download

Academics urge labour-friendly changes to wage committee by Parista Yuthamanop

It is difficult to imagine how a minimum wage earner in Bangkok can raise a family comfortably, given the high cost of food, housing and transport in the capital. So it was no surprise that Pheu Thai's campaign pledge of a 300-baht minimum wage proved popular with workers.

However, the promise is meeting with heavy resistance from businesses, which warn higher operating costs could lead to a new wave of layoffs.

Others doubt whether the plan can be carried out under the existing system, in which a tripartite committee of civil servants, businesspeople and labour representatives reviews and recommends wages each year.

Lae Dilokvidhayarat, director of Chulalongkorn University's Labour and Management Development Centre, said the tripartite committee needed tweaking to ensure workers are treated more fairly in terms of compensation.

"The government needs a more socially oriented approach rather than relying on market mechanisms when it comes to setting wages, as the current system is biased toward employers," he said.

The Thailand Development Research Institute said the minimum wage has increased by an average of 2.4% annually over the past 13 years, peaking at 9% from 2007-08, followed by 7% this year.

Pheu Thai's promise represents a 40-90% hike in current minimum wages, which now range from 159 baht a day in Phayao to 215 baht in Bangkok and 221 baht in Phuket.

Assoc Prof Lae said the criteria used by the tripartite committee were contradictory and unfavourable to employees' bargaining power.

For example, the Labour Protection Act stipulates the panel consider hard data on existing wages, the cost of living, living standards and economic growth while also taking into account production costs, the cost of goods and services, business capability, productivity and economic and social conditions.

"The criteria for setting the minimum wage cancel each other out. And employee representatives have inferior bargaining power, as they are not well represented, plus the discussions are technical," he said

The government must intervene more forcefully in market mechanisms, overhaul the tripartite committee or shift to another system.

He said previous increases in the minimum wage did not let the workforce reap the benefits of development.

Some 2.4 million people make the minimum wage.However, some firms adjust their employees' salaries relative to minimum wage increases.

"A fairer rate of adjustment would see the increase catch up with gross domestic product plus inflation, plus adding margins to close the wealth gap. For example, it might track GDP growth of 4%, inflation 4%, and a certain margin set by the government," he said.

Bundit Thanachaisethavut, a labour rights researcher, said political parties campaigning for a minimum wage increase represented a first.

"While this is a positive development, I doubt the practicality of a big increase under the tripartite system," he said.

Mr Bundit said workers' demands for improved compensation were respected more in the wake of the October 1973 political uprising, but minimum wage increases have been very slow in coming.

The minimum wage system and the tripartite committee were both introduced a year earlier.

"From 1973-74, the country paid the lowest wage among Asean countries, and this was promoted as a strong point for the country's industrial development," said Mr Bundit.

However, the International Labour Organisation has endorsed the tripartite system as an international criterion for setting minimum wages, he added.

(Source: Bangkok Post, Academics urge labour-friendly changes to wage committee, 13/07/2011, Parista Yuthamanop, link)

Labour Rights Vocabulary

rights - something you are legally or morally allowed to do or have (See Wikipedia) สิทธิ์
labour rights - things that workers must or should have as a matter of law or morals, things they are entitled to (See Wikipedia)

demonstrators - people who are gathering or marching somewhere in protest to show their support or opposition to something

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
compensation - money or other benefits that an employee receives for the work that they do
existing wages - current wages
review wages - look closely and assess wages (and decide if they should be changed or not)

a minimum wage - the lowest pay rate that a company can legally pay workers (though many may illegally pay lower than this), legally set by the governent to ensure that people can look after their families, economists claim that minimum wages can create unemployment (See Economist glossary)

earn minimum wage - when a worker receives the minimum wage from their employer
minimum wage earner - a worker who earns the minimum wage each day in their job

raise a family comfortably -
have enough money to buy all the things that a family needs (as children grow towards adulthood) without continually problems (not affording school or medical care for children, for example)

academics - teachers, instructors, lecturers and professors at universities
urge - to advise someone very strongly about what action or attitude they should take วิงวอน ย้ำเตือน

employee - someone who is paid regularly to work for a person or an organisation ลูกจ้าง
employee representatives - people who work for the benefit of employees in negotiations

(verb) - when two sides making an agreement discuss what each will receive in the agreement
(noun) - the process of making an agreement and deciding on the terms and conditions
bargain -
same as "negotiate"

bargaining power -
the ability get what you want (when two sides to an agreement disagree about what each side should get)
inferior bargaining power - have less bargainning power (less able to get what you want)

resistance - a refusal to accept something or allow it to happen การต่อต้าน, การขัดขืน
promise is meeting with heavy resistance from businesses - many businesses refuse to accept the campaign promise

layoffs - job cuts การปลดคนงาน
a new wave of layoffs - a new period of lots of people losing their jobs

tripartite - involving three organisations or countries ไตรภาคี
tripartite committee  - the committee that sets the minimum wage with representatives from business, labour and the government

labour representatives
- people who try to get higher wages and better working conditions for worker (usually negotiators from labour unions)
- companies that hire workers
current system biased towards employers - employers get what they want under the current tripartite system (and therefore unfair to employees)

workforce - all the people working or looking for work in the whole country or one company แรงงาน

wealth - how much money and assets a person or country owns  ทรัพย์สมบัติมากมาย
gap - a space or opening in the middle of something or between things; the distance or difference between two things ช่องว่าง
wealth gap - the difference between the wealth of the rich and the lack of wealth of the poor in a country

demands - the things that someone is asking you to do
workers' demands - what the workers asked for (in negotiations or "collective bargainning" with employers)
workers' demands respected -
the workers got what they were asking for

oriented - directed towards
approach - a way of doing or dealing with something การจัดการกับปัญหา
socially oriented approach - a way of dealing with an issue or problem that tries to solve social problems

current - of the present time ปัจจุบัน
current system - the way doing things that is used now
biased - unfair; preferring one person, thing, or idea to another in a way that is unfair ลำเอียง

- try to get a better deal from someone (for example, a better price for something you want to buy)
power - energy in the form of electricity produced in large quantities and used to operate lights, machines, and heating
employee bargaining power - the ability of employees to get better wages and working conditions (in discussions and negotiations with employers)
unfavourable to employees' bargaining power - did not help or benefit employee bargainning power

Labour Protection Act - Thailand's labour laws that detail how the minimum wage is to be set
stipulates -
states or says (the detailed text of a law or an agreement)
criteria - rules and standards used for making decisions and judgements (See glossary) บรรทัดฐาน
criteria for setting Y - the rules for deciding on the level of Y

- to become involved in a situation in order to try to stop or change it แทรกแซง
intervene in market mechanisms - don't let supply and demand set wages (use some other standard or criterion)

overhaul - change completely, improve so that every part of it works properly ปรับปรุงใหม
overhaul the tripartite committee

shift to another system - start using a different (and better) system

development - economic development, the process of a poorer country's economy growing, industrializing, improving and becoming more wealthy and equitable to all (more equal distribution of wealth)
reap the benefits of development.- gain from economic growth and development

domestic - within the country ภายในประเทศ
gross domestic product - the amount of goods and services produced by the whole country
inflation - the level of prices rising in the economy as a whole (See Economist Glossary) ภาวะเงินเฟ้อ

track GDP growth of 4%, inflation 4%, and a certain margin set by the government - (making wages) follow the overall income of the country (GDP) as it grows plus the increase in the price level (inflation) plus an extra amount

- good ที่ดี
positive development - an event that gives cause for hope and confidence ซึ่งมองในแง่ดี
practicality - whether some plan will work and be successful

X in the wake of - X happened after big event Y
uprising - a political situation in which a large group of people opposes and tries to defeat the government or a ruler การลุกฮือขึ้นก่อการปฏิวัติ

October 1973 political
uprising - also called the "1973 Democracy Movement" (See Wikipedia)

International Labour Organisation (ILO) - the United Nations organisation that defends labor rights around the world (See Wikipedia)

- officially approved รับรอง
international criterion - a standard that is used internationally, an internationally accepted standard

General Vocabulary

transport - to move people or things from one place to another ขนส่ง
capital - capital city, the city that is the center for government in a country พระนคร

- a planned series of activities designed to persuade voters to vote for a particular candidate or political party การรณรงค์หาสียง
pledge - a serious promise to do something สัญญา คำมั่้นสัญญา

doubt - not know for sure if something is true or false, uncertain

civil servants - permanent workers for the government

tweaking - changing in small ways trying to fix something (See glossary)
- to make certain that something happens or is done รับรอง ให้ความมั่นใจ ให้การยืนยัน รับรอง
X in terms of Y - X as measured by Y

- happening every year ทุกๆปีด
range from X to Y -
contradictory - go against

panel - a group of people brought together to discuss, investigate, and give advice on a subject

data - facts or information used for making calculations or decisions ข้อมูล
hard data - accurate data and information (you can depend on)

standards - an acceptable level of quality or achievement มาตรฐาน

taking into account Y - including issue or factorY when discussing or trying to solve a problem
capability - the ability to do something ความสามารถ
productivity - the speed at which a worker, company, or country produces goods (some are faster than others)

cancel each other out - one says up, the other down (so zero net effect)
technical - requiring special detailed knowledge (example: computers, electronics, manufacturing)

benefits - goods things that can happen from an activity or process ผลประโยชน์

adjust - to change something slightly, especially to make it more correct, effective, or suitable ปรับ
relative - a member of your family ญาติพี่น้อง

- follow
margin - an extra amount


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