Special Report: Minimum Wage VS Living Cost

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Upon the criticisms and analysis both for and against the policy of the government to increase the minimum wage to 300 baht and the salary for fresh graduates to 15,000 baht, the Bank of Thailand (BoT) recently revealed the figures of living costs compared with income of labourers in the society.

As of the end of May 2011, there were 17,310,300 employees, comprising 3,560,000 in the public sector and 13,750,300 others in the private sector. Their average income was at 9,775.1 baht a month. Those in the agricultural sector earned only 4,900.3 baht a month while those outside gained 10,501.5 a month, which are considered low compared with the expensive living costs.

Compared with the same period last year, average income of employees improved as it generally went up by 5% while workers in the agricultural sector got their income increased by 11%. Wages for workers in other industries went up by 5.6%.

BoT Board Chairperson MR Chatu Mongol Sonakul expressed his opinion that minimum wage hike for labourers is very necessary at present because labourers have low incomes. He said their wages actually should be boosted up to match the current economic situation, lessen the yawning gap of wealth and prevent social clashes.

MR Chatu Mongol however noted that the government must not only increase the minimum wage rate, but also improve basic infrastructure to increase competitiveness and production potentials as well as improve skills of labourers to meet with the Thai economic expansion.

BoT Governor Prasarn Trairatvorakul earlier stated that the minimum wage adjustment so far did not meet with the skyrocketing living costs while labourers did not receive fairness in the minimum wage adjustment because the wage rate remained low after deducting the inflation rate. He however admitted that increasing minimum wage to 300 baht or 40% in one time might affect the business sector as it cannot adjust itself.

It is evident that labourers need a wage increase to enable them to survive the high living costs; however, the government must ensure that entrepreneurs can cope with the rising operating costs so that their business can go on as well.