The Minimum Wage Of Thailand - 1177 Words

The Minimum Wage in Thailand In 2012, many companies in Thailand faced a number of labor strikes, which had a big impact the economy of Thailand. The motive of the labor strikes was that workers wanted more wages for their better life quality. Due to this circumstance, one of the political parties, Pheu Thai Party, proposed a new minimum daily wage policy increasing from 210 Baht to 300 Baht, or about US $10, to attract more votes for the coming election in 2013. Finally, the party was elected to be the government of Thailand because of the wage policy. However, this policy was controversial among Thai workers, corporations, and consumers. The policy was supported by the workers, but the corporations and consumers had some†¦show more content†¦In other words, businesses will be negatively affected because their wage costs are unusually high as the pay rate is not set by market forces, but the new government. As a result, they will pass on these higher costs to consumers through higher prices, res ulting in inflation. Moreover, an increase in wages subsequently impacts on the number of employees. Because of higher labor costs, some companies would have to close down their businesses or lay off their workers to survive the economy. Therefore, unemployment rate is increasing. For instance, textile companies, which are labor intensive industries, require many employees to produce clothes. These companies have to increase wages for every employee, thus the costs of production would also be proportionally higher to an increase in wages. The owners of these businesses have to cut down the number of employees. Increasing in wages seems to be a good merit for some workers, but in fact, it makes the situation more difficult to find a new job for those laid-off workers. For these reasons, the 300 Baht wage policy is believed to bring more harm than good to the economy of Thailand. The second reason I disagree with the policy is the decrease in real wages. The real wage is the ratio of nominal wages to the sales price of products. If assuming the prices are steady, the nominal wages and the real wages shift in same way. In real situation, when wages increase, the