Thailand’s daily wage hike will not necessarily put more food on the table
Although the minimum daily wage will rise by an average of 5 percent from October 1, not many workers see a brighter future.
“The increase will not make my life better in any way,” said Pattama Ngarmpag, who works as a janitor. “I’m already getting more than the new minimum wage rate, but I’ve never been able to make ends meet.”
Pattama currently earns 360 baht per day, which is just above the 353-baht minimum rate set for workers in Bangkok. Yet, despite working five days a week from Monday to Friday, she earns less than 10,000 baht a month.
“I’ve tried looking for extra jobs but to no avail. There are far too many people scrambling for extra work out there,” she said.
Soaring inflation means her expenses are far higher than her income. She now owes nearly 50,000 baht to loan sharks and almost 10,000 baht to her landlord.
Living expenses rising faster than wages
Assoc Prof Kiriya Kulkolkar, who teaches at Thammasat University’s Faculty of Economics, said the 5 percent daily minimum wage increase is lower than the current inflation rate of 7 percent.
For instance, the price of a pack of instant noodles has risen from 6 baht to 7 baht while electricity has gone up from 4 to 4.72 baht per unit. Though the government has offered help to reduce living costs, state support does not cover many needy citizens.
Pattama, for example, lives in a rented room and so is not eligible for government discounts on household electricity bills.
“Discounts are being offered to customers who use low amounts of electricity. But when you share a power meter with other families, you are not a small customer any more,” she explained.
To help control her soaring living expenses, Pattama now walks several kilometers to work and back to save the 40 baht she used to spend on transportation. She also brings a packed lunch to ensure she can spare 80 baht per day for her child.
Jit, also a janitor, said she is paid daily, so looks forward to months that have more working days. For instance, August has 31 days, which means she can work 23 days and earn more money but her wages in September will be lower because it only has 22 working days.
“My staples are boiled eggs and fermented fish,” said 52-year-old Jit, as she offered tips on making ends meet.
Nuken Intajan, 61, is doing her best to not become a burden on her grown-up children, who are already struggling with their finances. Apart from her 600-baht government subsidy, Nuken earns 2,500 baht as a part-time cleaner for a foundation plus some extra cash selling grilled chicken.
“The price of raw chicken has increased but I cannot raise my prices because I know my customers cannot afford to pay more,” she said.
Life becoming tougher
Over the past decade, Thailand’s gross domestic product (GDP) has risen by 20 percent – far higher than the hike in daily wages.
As a result, the poorest Thais typically spend nearly half of their meager earnings on food. Their wealthier compatriots, meanwhile, spend an average of only 27 percent of their income on food.
“Huge inequalities exist in Thai society,” Kiriya said. “Low-income earners have a relatively tough life.”
She points to the fact that although the daily minimum wage has increased over the years, the hikes still lag behind the inflation rate. In the past 10 years, low-income earners’ daily expenditure has risen by 15 baht, from 318 baht to 333 baht.
The Thai Chamber of Commerce University’s Center for Economic and Business Forecasting warns that household debt in Thailand will likely rise to around 89.3 percent of GDP or 14.97 trillion baht by the end of 2022. This will be the highest rate in 16 years.
Is the hike good?
Kiriya believes the daily wage increase will help low earners to some extent, and such a small rise is unlikely to push up inflation rate. Neither will it affect large companies, as they usually pay their workers more than the minimum daily wage anyway, she explained.
“But of course, small and medium businesses will feel the pinch because they often hire workers at the minimum wage rate,” she said.
So what does work?
However, Kiriya doubts a higher daily minimum wage is the solution to boosting people’s quality of life. Nor would it contribute to sustainable economic development. After all, Thailand’s daily minimum wage earners are generally unable to afford decent living conditions.
“Thailand must ensure its people earn enough to cover their basic living expenses,” she said. “Employers should pay based on market mechanisms, while employees or workers should boost their skills. Nowadays, technology has significantly enhanced people’s access to knowledge and training.”
The academic added that faced with this fast-changing situation, the government must bolster the economic structure, curb monopolistic practices, promote transparency and stamp out corruption. Such efforts would strengthen the economy, leading to better conditions for workers.
Kiriya also urged the government to support the establishment of labor unions, to give workers a louder voice and boost their bargaining power.
Meanwhile, although the millions of migrant workers in Thailand are legally entitled to the daily wage rise, this doesn’t mean they will get it.
Da, a Cambodian national who works as a gardener, said she now earns 325 baht a day but would be afraid to complain if her employer does not raise her wage next month.
“All I can do is skimp and save,” she said. “I don’t buy cooked food, I cook at home to save costs.”
Different rates across country
The new daily minimum wage varies across the country. The highest rate of 354 baht will apply to Chon Buri, Rayong, and Phuket. Meanwhile, workers in Bangkok, Nonthaburi, Nakhon Pathom, Pathum Thani, Samut Prakan, and Samut Sakhon will start at 353 baht daily, while the lowest rate of 328 baht will cover Yala, Pattani, Narathiwat, Nan, and Udon Thani.
The daily minimum wage varies from province to province due to their differences in economic situations and living expenses.