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Home » News from Thailand » Income position Thai: Raise the minimum wage!
Income position Thai: Raise the minimum wage!
The Thai Chamber of Commerce (TCC) is calling to raise the minimum wage by 5 to 7 percent, following a survey of Thai income position.
This shows that farmers and workers can hardly make ends meet. In 2015, the average household income was 26.915 baht and expenses were 21.157 baht. More than 75 percent of households are in debt, averaging 156.770 baht per household per year. Many of these debts are made with money loan sharks, at least 44 percent borrow in the informal circuit.
Since 2011, Thailand has experienced moderate economic growth of less than 3 percent per year. The minimum wage of 300 baht per day has not been increased for the past three years. That is why the TCC advocates an increase of 5 to 7 percent. Farmers will be hit extra hard this year: by the drought and by the lower prices they receive for agricultural products.
Source: Bangkok Post
We help a young man of 23 monthly with some money so that he can pay for his room of 3000 baht per month. His earnings are 9000 baht per month and he only has night shifts.
The farmers are mentioned twice in the article, but I wonder if a farmer benefits from an increase in the minimum wage. In my experience, a farmer is an independent entrepreneur, who depends on the profit from the company. If a farmer employs workers, an increase in the minimum wage will only increase his costs.
Or does it work differently in Thailand?
A higher minimum wage will mean for most that they can buy that new iPhone faster and take out even more credit. I know several Thai people who have a monthly income of between 30 and 40,000 baht and they can't make ends meet. If I then ask where the money goes, you will fall backwards. About 4/5 of the salary is gone on the first day. They first have to pay back money to family and friends from whom they borrowed money at the end of last month because otherwise they would not make it to the end of the month. Then the usual loan payments for anything and everything, the rent, and then the payments for all sorts of utilities. When all this has been paid, there is not enough left to buy food for a whole month and they have to borrow again before the end of the month.
It's a vicious circle. In my humble opinion, they must first learn to manage money and learn to plan. You can only spend your money once. Most of them live beyond their means and that naturally entails problems.
The minimum wage is currently 300 baht per day. It concerns those people, not some farmers, who have an income of around 9 thousand baht in wages. In a month of 31 days they have 1 day off. I don't find it surprising that those people don't worry about how to keep a household budget. I would also like what's going on around me, and see how I roll through the month best.
People who just know how to handle money is an international phenomenon, and is certainly not only typical Thai. Also in Europe you have people with a very good income, who still live well over their budget. Moreover, the minimum wage increase has nothing to do with people who have a generous income of 30 and 40.000 Bath for Thai standards. The increase is for those people who really have to juggle their 9000 Bath per month. It is certainly true that among the latter there are also people who cannot handle money. But to stipulate for a possible increase that they first have to learn how to deal with money is of course absurd. People who talk like that, I'd like to see how they got by on 9000 bath. Those people in most normal Thai families who actually earn 40.000 Bath are often so unique that they usually have to help the rest who earn significantly less.
Your first line is correct, but I think you meant it a bit differently (worse) in view of the rest of the argument.
The Engel curve shows that when people earn more money, they also spend more. Whether that is directly a new iPhone I doubt, but it will happen. The most important thing, however, is that earning more means that, in addition to the basic necessities of life, people also have money left over for other things that make life better. Especially outside the big cities, people often still live simply and it is urgent that those people have access to facilities that not only make life more beautiful, but also better and healthier.
And besides a better quality of life, a manageable gap between rich and poor also means peace. In my opinion, the battle between “red” and “yellow” stems from the too great difference between rich and poor.
To get back to your argument; The fact that many Thais do not know how to deal with money is also because they are not used to it. The Thais live more according to the motto “Carpe diem” and that is precisely what appeals to many of us to live in Thailand. That and the fact that we DO have the money to afford a pleasant life.
Another missionary who will tell the Thai how to handle money. Leave them alone, man, just respect their way of life.
All in all, Pete... the sad thing is that dealing with money for the “traditional” Thai is still inspired by the “traditional” nam jai principle. This is an unimaginable solidarity principle (crudely stated = who gives and expects to get nothing in return) and the Greens, Socialists and other PVDA members will undoubtedly get away with this... Unfortunately, in my opinion, this could only work in a strictly agricultural and conventional society . Times have changed in Thailand as well. I am an Isaan resident and continue to be amazed by the locals' tenacity to (centuries) old customs and concrete traditions that an average farming family leaves behind with often insurmountable costs. Well... I have to adapt here, and not the other way around.
The so-called minimum wage of 300 Baht per day is still far from being implemented everywhere. There are threats of dismissal and to hire cheaper labor from Cambodia.
People without a "reasonable" income are not eligible for a loan from a bank. For a new school year, the child is forced to borrow, sometimes with loan sharks with all the consequences that entails.
Once that so-called 300 Baht regulation is legally and obligatorily implemented, that will be a first profit!
Thailand is now about as rich as the Netherlands in the fifties of the last century when Vadertje Drees introduced the state pension. Thailand is, in international terms, an upper-middle income country and is approaching a higher income country.
Thailand's major problem is the great inequality in income and wealth, greater than in the surrounding countries, and much greater than in the Netherlands.
Only 18 percent of the gross national product (GNP) goes to the state. Thailand must levy more taxes: increase VAT, higher income tax rate (for higher incomes, and fewer deductible costs, which are very high in Thailand), increase in excise duties, tax on wealth and inheritance and an environmental tax.
The state's income will then increase to 30 percent of the GNP. (Netherlands 45 percent). That extra money must be distributed among the poorest: some minimum wage increase, but mainly distributed among poor farmers, small entrepreneurs, the elderly and the disabled. I have calculated that all these groups will receive an income of at least 12.000 baht per month. These incomes are spent again, stimulate the economy and cause more taxes, the multiplier effect. At the same time, inequality will decrease.
But the current regime only cares for the elite, so it probably won't happen.
Totally agree and well reasoned!
Yes, but how could it be that Thailand leaves the growing middle class alone fiscally, does not have a progressive tax system, keeps VAT at 7%, and keeps the rich out of the wind? Not really, because the government is waiting for rising incomes among the poorest to be able to hit them with tax measures, which creates an obligation to tinker with the 18% contribution from the GNP. Income inequality is a mentality issue that still affects Western countries, including the Netherlands. Then release a hefty tax assessment on farang every year, in accordance with standards from the country of origin, as an example and role model for the Thai people. I wonder if there will still be feelings of solidarity.
Dear Tino,
The current regime is under Minister Prayut. If you follow his reports, you cannot say
that he only cares for the elite.
He himself has said that it is not easy to do good for everyone, and that he leaves the solving of economic problems to specialized people.
It is something that keeps him busy every day to give the Thai people a better life. He is open to anyone with a favorable idea for Thailand to tackle the current problems and improve where necessary.
Yes, for a lot of people in Thailand it is doom and gloom. Going through life with low-paid jobs and without meaningful education, then 55 years is enough to quit. A significant number of people, especially among the male population, then die. If money comes in, it will be spent in no time and we will see you again tomorrow. Enjoy the drink until your liver fails. It's filling one hole with another.
We have an apartment complex with 660 flats that were sold in one week. Price is still under 1 million baths, so it is also doable for Thais. Now after 2 years there is a lot for rent and for sale. Many can no longer afford it and then move on to plan b. So you have money and you just buy something without a long-term vision and then it turns out to be disappointing and different. Discipline and insights that need to be changed. How to solve this. The pride, the stubbornness, the imitation behavior. A culture shock is necessary to convert the negative spirals into positive ones. I sincerely wish it for the people, so the government is giving them some more financial scope, but I also have the feeling that this is a drop in the ocean.
I think that's not too bad 27.000 bath per month. Is about 725 euros.
It is of course an average, so there will be many people who earn less.
But 725 euros is roughly comparable to 2000 euros in the Netherlands if you look at the prices and standard of living there. Renting a house in Thailand is about 150-200 euros per month and then you have a very decent house for that money. You have 525 euros left. They don't have heating there. Health insurance is much cheaper than here (for the Thai that is). The same applies to electricity, water, petrol, etc.
No weird municipal taxes as we know them here in the Netherlands. Say 100 euros other fixed costs per month in Thailand. Do you have 425 euros to spend on food, clothing and other things. And that is many times cheaper than in the Netherlands. Comparable to the Netherlands 1000-1100 euros.
I'm going to take early retirement and emigrate to Thailand and then have to get by on 35.000 bath (950 euros) in Thailand. Is about 2500 euros in relation to the costs in Thailand comparable to the Netherlands. You won't hear me complain. I will soon have more to spend than I can now in the Netherlands.
Hans
Dear Hans, you have no idea what you are talking about; apparently you "know" Thailand so far only as a holidaymaker. Well, you are going to emigrate to Thailand with an income of 950 Euros per minute?
Then it is hoped that you have a large savings pot on hand, because you do not have enough income for an annual visa (which you will need as an immigrant), so you will not get one. How do you plan to arrange this? I have lived in Thailand for many years, but with an income of 950 Euro I would not consider emigrating to Thailand, but would rather stay in the Netherlands with its good social facilities.
The legal minimum wage in Thailand is indeed 300 baht.
But I know that there are many who are not paid the 300 baht by their employer.
Especially in the garment industry.
Jan Beute.
janbeute, fits like a bus. That Baht 300 per day is only paid by the big companies, such as Tesco, Big C, 7/11 and large corporations. The small private shops still only pay 200 Baht and there are even some, located deep in the sois, that only pay 150 Baht. This despite the statutory minimum wage.
In my opinion it has all gone way too fast in Thailand (not only in Thailand) .... While 40 years ago there was virtually nothing and 80% of people may never have held a bank note in their hands, it has now turned around for many
It reminds me a bit of what Geert Mack wrote about the US in the 50s and 60s…. Then everyone also thought it was normal not to stop their engine…..An image that I now also see along the petrol stations along the way ….people go to dinner and let the engine run for an hour…..show that it doesn't matter to me …money enough. The problem is of course all those people who see all that and also want it, but in fact cannot afford it ...... it was also the case with us 60 years ago, the car certainly had to be larger than that of the neighbor.
This will push small farmers even further into debt. Can they just guarantee the farmers a fair price because they also have to pay their staff.
One could sooner start by reversing the credits..., as well as the publicity about it..., everyone has his own car or SUV, is good for the economy (read the pocket of the hi so...) but... once one has it most of them are in trouble, well the publicity and the beautiful “rich people soaps” make everyone dream until it becomes a nightmare..
Indeed David.
If you turn on the TV here every day on whatever channel .
Then you will be overwhelmed by how beautiful life can be.
Cell phones, slim ladies and shampoos, sporty cars and mopeds.
Aircos, it can't go on.
Pointless talk shows , with beautiful girls and actresses ed who have never really worked a shot , let alone sat outside in the sun .
Borrow, borrow, pay, pay.
This is the image that Thai youth in particular see every day.
And put pressure on their poor parents to buy the new fashionable model from Honda or Yamaha on credit.
Because I have to look good to my fellow students and friends .
Because who wants to ride a Honda Dream or Wave anymore.
Jan Beute.
Indeed….mate Thais should also try to get rid of that loss of face. Anyone who, for example, does not come to work with an expensive car in Bangkok is regarded as a loser. The fact that the car driver takes three times longer due to the traffic jams than the one who uses public transport does not affect them, the reputation is now more important. Thais should also abandon the idea that buying second-hand does not automatically attract evil spirits and bring even less bad luck. Thais should also learn that a house doesn't necessarily have to have 3 bathrooms…..much less 4 bedrooms. Thais should also get rid of the fact that being lucky and being happy are not the same thing.
But as I read more here… it has all gone too fast for many people… people in Thailand have been catapulted from under their palm tree into a capitalist society in barely 20 years and have never had the chance to adapt step by step to the new world.