The good, bad and the ugly of the wage hike

Published: 13 Feb 2013 at 00.00
Newspaper section: News

The wage increase that came into effect on Jan 1 means Thai workers will receive a daily minimum wage of 300 baht, an amount that is about 30-35% higher than in the past and three to five times higher than the minimum wage in neighbouring countries.

Many have criticised the government's minimum wage policy as potentially "destructive", saying it will lead to higher unemployment and price rises that will burden consumers. Others say it is about time workers got a fair wage to match the rising costs of living.

While it is too early to perfectly assess the real benefits and costs of this particular policy, the Thailand Development Research Institute (TDRI) has conducted simulations to predict possible consequences for the economy if the 300-baht wage policy is fully implemented across the country. In this piece, we look briefly at the "Good", the "Bad" and the "Ugly" effects of the wage hike.

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djay
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Discussion 3 : 13 Feb 2013 at 10.293
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"three to five times higher than the minimum wage in neighbouring countries.". Okay, but how does the cost of living compare between here and there?
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whatajoke
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Discussion 2 : 13 Feb 2013 at 08.092
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"One of the key insights from this study is that an abrupt one-time increase in wages will impose huge negative impacts on the economy." - this perhaps the key statement to this controversial policy. In time to come the wage hike will be absorbed, businesses will adjust, and current low unemployment will help negate laying off. But it worries me to read that a 2.6% drop in GDP will be immediately felt.Pity this was so populist, it could have been risk free if only the govt had the luxury of implementing it over the 36 months before the next 'scheduled' election.
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commonman
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Discussion 1 : 13 Feb 2013 at 07.561
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Clever suggestions that not so clever people will ignore.
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The good, bad and the ugly of the wage hike | Bangkok Post: opinion