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27 January 2014
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Prices outpace higher pay

Saijai Kheuklang, a 45-year-old factory worker, takes off from her job and heads home. On the way, she stops at the usual market to get food for her family’s dinner. And today she has a few 100-baht notes in hand to make sure she gets enough groceries.

“Everything has become much more expensive these days,” Mrs Saijai said. “I used to get one bunch of vegetables for five baht, and it was enough for dinner. These days I have to buy at least three bunches since one is much smaller than before but the price remains the same.”

She said the price of food and groceries rose after the increase in the daily minimum wage, and while she earns more thanks to the new wage rate, she does not save more.

“It’s quite obvious I don’t have more savings as everything turns expensive,” she said. “Many of my colleagues still face the same sort of financial difficulties just like me.”

Each month, Mrs Saijai must shoulder her household’s expenses of 9,000 baht with a regular income of 8,000 baht a month or 11,000 baht when overtime is added. Luckily she is not the sole breadwinner, as her husband earns 11,500 baht.

“Without the help of my husband, it would be hard for me to cover all these expenses alone,” she said.

Panom Buadee, a worker at Apinanpanit, a small store selling farm products in Nakhon Ratchasima province, laments the new daily wage of 300 baht has not boosted her quality of life.

“Things are getting much more expensive these days,” she said. “I used to be able to barter for food or vegetables with vendors, but now everything is for sale.

“I’m glad I’m staying on my employer’s premises, or else I could not bear all these rising costs on my own. Even a dish of fried rice with basil costs as high as 40 baht now.With an egg, the vendor will add another 5-10 baht. I was happier with the previous wage rate.”

Many have begun to feel the pinch of rising living costs in the year since the new minimum wage was fully implemented. As of last November, food and drink prices were up by 3.9% year-on-year, while prices of meat, poultry and fish were up 8.5%. The same story for prices of eggs and dairy products (up nearly 7%) and vegetables and fruits (up 5.5%).

Yongyuth Chalamwong, research director at the Thailand Development Research Institute (TDRI), said wage increases are not keeping up with higher living costs.

“Workers should have more savings, but theydon’t,” Mr Yongyuth said.

TDRI data show average monthly household spending in 2012 stood at 14,809 baht, up 28.5% from 2011.

“It could be that consumers tried to be thrifty in 2011 due to the severe floods,” he said. “But the wage hike is another significant cause.”

Wilaiwan Sae Tia, vice-president of the Thai Labour Solidarity Committee, points out that food, drinks and groceries have remained expensive even though the government has tried to control prices.

“The new wage of 300 baht doesn’t mean a thing now. Many can’t even live on that, without overtime,” she said.

Wallop Vitanakorn, vice-chairman of the Federation of Thai Industries,wants future governments to stop using labour wages as a political tool for their propaganda.

“Normally, the rate adjustment should be based on living costs in individual areas,” he said.”But the Pheu Thai-led government looked at populism instead.”


First published: Bangkok Post,  January 27,  2014


Yongyuth Chalamwong, Ph.D.
Research Director, Labor Development