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21 July 2014
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Wage policy flaws ‘need careful study’

Flaws in the last minimum wage increase mean careful studies must be conducted before any similar policy is introduced in the future, according to the Thailand Development Research Institute (TDRI).

The 300-baht minimum wage policy, launched by the previous Yingluck Shinawatra government, did not improve workers’ financial status, said Yongyuth Chalamwong, a research director of the TDRI’s labour development unit.

Many workers did not benefit from the policy because the pay rate did not match the cost of living, Mr Yongyuth said.

Workers were able to save less money each month despite the wage hike, which was implemented in April last year.

In 2011, each worker on average had 1,838 baht left in their savings at the end of the month, according to the National Statistical Office.

Last year, workers’ savings dropped to 1,341 baht per month.

As for workers who usually spent more than they earned each month, the amount they overspent stood at 200 baht per head in 2011.

The figure rose to 1,088 baht last year, Mr Yongyuth said.

He said expenses for workers have increased by 16% from last year, but income grew only by 13%.

The 300-baht wage policy has pushed up the cost of living, Mr Yongyuth said.

Raising the minimum daily wage without effective measures to control the prices of consumer products proved useless as a way to improve workers’ quality of life, he said.

Overall, many workers’ families are worse off financially after the 300-baht wage policy came into effect, he said.

Last year’s wage hike has also been blamed for making earners believe they had greater disposable income, when the actual increase in wages was swallowed by inflation, he said.

These findings should prompt authorities to study any future wage hike more carefully before implementing it, Mr Yongyuth said.

The tripartite wage committee should look into a proposed wage increase more realistically and take into consideration the varying costs of living and the economic strengths of different provinces.

The tripartite committee consists of representatives of workers, employers, and the Labour Ministry. Freezing wages is not an option, he said.



First published: Bangkok Post, July 18, 2014


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