Pay less than minimum wage? To do or not to do?
Recently there was a discussion on Thailand blog about whether or not to pay (at least) the minimum wage. Because it fell outside the actual topic, the discussion didn't get out of the way and that's a bit of a shame because there are several sides to that topic. So let's try to dig into this a bit further.
The reason was a reaction from Tooske that 6 years ago a day laborer for planting rice received 150 baht per day plus lunch. According to her, more was not worthwhile because of the (then) low rice price of 8 baht per kilogram. In response, TheoB mentioned that 6 years ago the minimum wage was 300 baht and that apart from that he thought it was a glaring injustice.
Most readers (including me) will agree with TheoB, but a few caveats should be noted:
In any case, it is to be commended in Tooske that she makes the land productive (sometimes there is also an obligation to do that) and that she generates income for day laborers. And that she doesn't want to lose money is understandable, although it is of course against the law to pay less than minimum wage and that you shouldn't do that for social reasons, provided you can afford it of course. Johnny BG therefore suggested making the land productive in a different way so that Tooske can pay the day laborer the minimum wage. In the years that followed, however, Tooske opted for sowing and not planting out, so that most of the work – cultivating and harvesting the land – could be done mechanically. Paying less than the minimum wage was probably no longer an issue then.
Furthermore, it is sometimes wise not to deviate too much from what is customary. For example, I can imagine that day laborers in large parts of Thailand are largely paid in kind: for example, farmer A works 5 days with farmer B and farmer B 7 days with farmer A. Those 5 days are offset against each other and the 2 extra days of farmer B are reimbursed by farmer A at the low daily rate of 150 baht. I see no harm in that. If Tooske does pay the minimum wage or more, farmer A may feel obliged to also pay the minimum wage, while he may not be able to afford it. That is of course an argument, but personally it does not seem strong enough to me to pay less than the minimum wage.
Furthermore, we must be careful not to be hypocritical (TheoB, that is not for you). An example:
Just outside the city of Ubon we have a large but very simple restaurant where more than 100 people have lunch every day. You don't see farangs there, but most visitors seem to earn clearly more than the minimum wage because everyone comes there by car and because the majority also brings some beer. The food is good but mostly cheap. To cheap. Inquiries show that the (somewhat older) staff earn less than the minimum wage while they work more than 8 hours a day. Complaining doesn't help because the boss tells them to leave.
Who's wrong here? The boss may not be able to afford to pay more or raise prices. The customer could give some (extra) tip, but that is not very common in such a restaurant (but it may still be a reasonable addition to the salary). In my opinion, the biggest mistake lies with the enforcer of the law, who apparently does not intervene. Most customers there can afford any higher prices and otherwise they can drink something cheaper than beer. But what should the farang do in such a case? Tipping little or no actually means that you are okay with being paid less than the minimum wage and that you are happy to take advantage of it….
But what do you do in case of a simple food stall as you find a lot in the countryside. Of course they have no staff and in many cases they will also earn less than the minimum wage. And there it is completely unusual that you give a tip. For example, I often come to a food stall to have an iced coffee when I come back from a training. Ten baht only. And that's what I pay. But if her 6-year-old daughter is there and no one else is there, I'll give that daughter some money. The first time I asked for permission and after some hesitation I got it. Next time the ice coffee will be free, but only if no one sees it. Gossip is best avoided.
Another example. This time from my brother-in-law of 76 years. He had his own garage business, which he passed on to his eldest son a few years ago. He is now a widower and all his possessions - house and some pieces of land in the vicinity of Ubon - he has already handed over to his children, except for one piece of land where he is now farming. A lot of work, but until recently he had help from a woman to whom he paid minimum wage. But only if he had money and often he had no money because he himself only gets 700 baht a month and his children can't give much either because they all have children who are studying. That woman stuck with him for over a year—probably out of goodness—but she recently called it quits.
I want to say that many people in Thailand earn less than the minimum wage – nothing new, of course, for the readers of Thailand blog – but that we as farang have to be careful not to use / abuse it.
It is good that you point out to us that we should not abuse the Thai people who work for us. Well, my experience is that the Thai man / woman knows very well what kind of wages they should ask if they can work at a "farang". If you use the minimum wage you quoted, no one will come. Here in the village everyone wants to come and work, but less than 500 Bath for a day's work gives no one home. We live in the province so no city wages.
Indeed Willem, for less than 400 – 500 baht you will not get anyone to work. Not to mention the self-employed handymen who won't get out for less than 2 - 3000 baht a day, especially if they've seen a farang
Tooske wrote the following this month:
“Incidentally, there are still plenty of people here who work for less than the minimum wage, preferably even in this area. I think it's also a job offer issue.”
It may depend on the province. But you can also easily get day laborers for the minimum wage in Ubon. A farang can do that too. And maybe for less too.
In my last example, I indicated that a woman probably helped my brother-in-law for less than minimum wage out of kindness. Something like that can also play a role with Tooske. She may be well known in her neighborhood and then people are more willing to settle for less and in any case not take advantage of the fact that she is a farang. It wouldn't surprise me.
I never feel that I am being taken advantage of.
here in the street a Dutchman has opened his pub again. He has sent his old female staff home. Now he is calling up new staff. Offer 5000 Bath per month. They can supplement it with additional services. He himself uses them, but does not pay for them.
The minimum wage is not the same in the Thai provinces. I also wonder how long you have to work for a minimum wage. 8 hours or 10 or more?
Every Sunday a gardener comes to maintain our garden in Sisaket of 2400 m2, pruning, mowing the lawn, etc. We pay him 500 Bath, we pay extra for the petrol for the lawn mower. He is satisfied with that, have been doing it that way for years. wife also help and then we give 200 Bath extra. He has the key to the garden gate but not to the house. In the garage he can get the garden tools himself. Everything is done in mutual trust. If something is broken, he sends a photo to us in Holland. Sometimes he can fix it himself. We transfer the money to his account every week via the bank. In short, to full satisfaction!
That an employer cannot pay the minimum wage may be true or lie.
The fact that an employee accepts 150 Bath per day must have something to do with the fact that he has little choice:
Accept 150 Bath, or a more difficult/unpleasant job for more than 150 Bath. Or no income.
If you work 8 hours a day and you are below the poverty line then this is not a job but slave labour. These people cannot raise their standard of living and remain structurally poor. Such jobs have no right to exist! The economy must serve people and not the other way around! Today we see the rich getting richer and more and more people dropping out of the middle class and never being able to climb up again. This leads to social unrest.
In theory you are right about the first thing that the minimum or less does not contribute to an improvement of a life, but then you also have to consider that everyone above this wage cooperates in maintaining this system. The same problem is worldwide and that the people at the bottom of the production chain are the slaves for the people above and it is the consumer who maintains that.
Food and clothes are much cheaper than what it should be in an honest chain. And the consumer will usually be very upset about the harsh reality, because we want to do as much as possible with the money we earn.
In addition, the government (elected and a reflection of the same consumer) is not afraid to push the boundaries in terms of collecting taxes and then spend it in such a way that most voters remain more or less satisfied. And so the circle is complete not to take any personal responsibility.
Finding a solution on a large scale is a problem, because if Thai rice becomes 20% more expensive, but a normal wage can be paid as a result and it costs the government less in aid measures, then the import countries will really not clap their hands and benefit, for example. Vietnam of it.
It is easy to explain why the rich are getting richer. Whoever borrows money sponsors the one who lends it and at the end of that pyramid are the real rich. In short, if you want to break through that, don't borrow money and buy food and clothing for a fair price.
Paying below the minimum wage does not only happen in Thailand, but also in the Netherlands. A long time ago my mother wanted to work for a mushroom grower in the village. However, the grower thought the minimum wage was much too high and came up with the proposal to hire my mother on paper for 6 hours a day at the minimum wage, but she had to work 8 hours a day for that. Fortunately, my mother was able to work at a factory somewhere where the collective labor agreement wages were paid. I think that these practices are still happening in the Netherlands.
Just as Tooske himself cannot own or work on a farm (is a profession forbidden to foreigners: https://thailand.acclime.com/labour/restricted-jobs-for-foreigners/) the minimum wage is a statutory minimum wage. Apart from whether or not it is checked and whether others pay (or can pay) it, the law prescribes the level of the minimum wage.
Those who do not comply with the law are in principle in violation. Foreigners then risk being expelled from the country and being regarded as 'persona non grata'. Those foreigners not only do not have to count on leniency (certainly not from service beaters), but they also give foreigners a bad name. (next to 'bad karma', because the Buddha knows where to find you)
Hans,
Nice piece, I made another round through the village on Saturday where the rice planting campaign has now started again in full force. Apparently we are expecting rain.
And indeed upon inquiry it turns out that the daily wage for the planters, mostly women, is still 150 THB per day and not the legal minimum wage.
Reason, indeed people see it as a social obligation to help each other with their work, today I am with you and tomorrow you are with me, almost the entire village is related to each other somewhere, so for a friend's price.
However, an extensive lunch is provided by the owner of the land.
That's how it can go in a small village because apparently that's how it's been going for years.
And indeed, if I'm looking for someone to do some odd jobs around the farang job, I have to come up with 500 thb, after all they are all professionals.
Our interest lies with Thailand, but we must realize that it is a Valhalla here compared to most of the World. A real Valhalla at least still. Also for the Thai.
I have now completed some horticultural projects in Thailand, with varying degrees of success. No people were hired, but the plan is presented and if people say to go for it, we set up a test set-up or test field. I ask so I pay that and it's up to me to sell it abroad.
Organically grown Thai herbs had the stumbling block that the extra 20 cents was too much. That was 10 years ago and it didn't survive.
A previous project went so well that the executors decided that an income of 20.000 baht a month as a farmer was more than enough and they were going to do the minimum to earn the amount they wanted.
With this knowledge I went to work again and again the starting point that they are responsible to earn enough income in a reasonable way.
This time to convert rice fields that endure too much water during rain into water flower farms, which in recent years has provided the participants with good monthly income at 10.000 baht per rai for 80 hours of work.
It's my job to tell the honest story to our customers time and time again that if they say a better world wants them, then they shouldn't ask for a discount. Good luck and apparently a change is underway and my hope in humanity is not lost.
The moral of the story is that wise men are of little use and do all the more. People don't need help, but a helping hand in the right direction and the confidence that you can move forward as a team.
One car is more expensive than the other and yet there is a market for the more expensive segment. Seek and you shall find without depriving another unless it is again said that it is only for the rich…..
Nice projects, Johnny BG. And everyone clearly above minimum wage.
Thailand Tabacco Monopoly has something fun in its name. Here monopoly is not a dirty word and play along to make everyone better.
Consumers don't do it, so it has to be the other way around. An explanation that labor should at least be paid normally is the seller's concern and if a buyer doesn't want it so be it.
The world will become fairer, but that will go slowly, but with an honest story or a nice plan, rice can also be sold abroad directly.
http://www.ricedirect.com or so. A forum to let farmers sell their production without intermediaries.
We have just had a handyman from Myanmaar work for us since 1 week. Just a day laborer. He absolutely cannot work independently and is actually only good for the heavier and simpler work, which my husband cannot do alone. He gets 300 baht a day plus lunch. However, he can only work 5 days a week because of his daughter. That is of course his choice, as far as we are concerned he was allowed to work 6 days a week. He only has to work 7 hours a day. We think this is sufficient for someone who really can't do anything. By the way, the reward was set by a Thai.
On making the land productive:
There is (as far as I know) no obligation to use land.
But there is a financial incentive. The tax for land on which houses are built is quite low (the lowest rate). Commercial buildings are subject to a higher rate, agricultural land is even higher, but land that you do "nothing" with (we have two pieces of land as a parking lot for visitors) are very held in high esteem. Even if you have land that you do nets with, such as jungle, you are highly regarded.
Arjen.
I often ask here if they want to mow my garden, an hour of work gives 200 bht, so far I haven't had any interest, so I do it myself now, I have now stopped all help, financial or whatever it may be.