|
Dear
friends,
On July
20,
2006,
the
Central
Wage
Committee
increased
the
minimum
wage in
35 of
Thailand’s
76
provinces.
Yet,
they
withheld
the
increase
from the
other 41
provinces,
reasoning
that
workers
in those
provinces
had
fewer
cost of
living
and
inflation
pressures
and that
the wage
subcommittees
in those
provinces
had
failed
to
submit
requests
for a
wage
increase.
Later on,
however,
Somsak
Thepsuthin,
Minister
for
Labour,
commanded
the
Central
Wage
Committee
to
review
its
decision.
Mr.
Thepsuthin
insisted
that
wage
increases
be
nationwide;
otherwise,
he said,
the
decision
would be
unfair.
I
neither
agree
nor
disagree
with the
Minister
for
Labour
on this
point,
but I
think
that the
process
of
setting
minimum
wages
should
depend
on clear,
fair
criteria
rather
than
whether
or not
the
Minister
commands
a
review.
In fact,
I cannot
see
evidence
that the
Minister
used
clear
criteria
when
changing
the
minimum
wage
this
July.
The
Central
Wage
Committee’s
rationale
for
withholding
wage
increases
to the
41
provinces
seems
illogical.
Now,
workers
in those
provinces
face
even
more
cost of
living
pressures
than
workers
in the
other
provinces.
A
consideration
of
inflation
– the
measurement
of
increases
in the
cost of
goods –
in
Thailand’s
provinces
confirms
my
point.
In
provinces
where
minimum
wages
were
increased,
the
average
inflation
rate
during
the
first 6
months
of 2006
was
5.95%
when
compared
with the
same
period
last
year.
However,
in
provinces
where
minimum
wages
were not
increased,
inflation
averaged
6.59%
during
the same
period.
In the
other
words,
provinces
having
greater
price
increases
(higher
inflation)
did not
receive
an
increase,
but
provinces
having
lesser
price
increases
(lower
inflation)
received
an
increase
in
minimum
wages.
In fact,
some
provinces
with the
highest
inflation
were
denied
an
increase
in
minimum
wage.
Consider,
for
example,
Pattalung,
with
12.2%
inflation,
the
highest
rate in
the
country;
Rayong,
at 9.6%,
was
ranked
second
highest
in the
country;
or
Saraburi,
Pathumthani,
Pang-nga,
Nakhornnayok,
Phayao,
and
Trang,
with
inflation
rates
between
8.4 and
9.2%.
Conversely,
provinces
with the
lowest
inflation
– for
example,
Nan,
Phrae,
Nakhornphanon
and
Amnatjaroen
with
rates of
3.3 to
3.7 % –
had
their
minimum
wage
level
increased.
This
problem
of
unfair
wage
increases
seems to
be
caused
by the
decision
to
decentralize
jurisdiction
over
wages to
newly
created
provincial
subcommittees.
Decentralization
is good,
but when
it was
done,
the
government
failed
to set
clear
guidelines
for
setting
minimum
wage.
Hence,
each
wage
subcommittee
now uses
a
different
set of
criteria.
Thus, I
suggest
that the
Central
Wage
Committee
establish
clear,
scientifically-based
criteria
that
will
guide
the
process
of
establishing
minimum
wage.
Also, I
notice
that
decentralization
also
weakened
the
process
of
determining
wage
increases
because
decisions
are made
without
bona
fide
economic
expertise.
Instead,
wage
increases
are
mostly
dependent
on the
balance
of power
between
employers
and
employees
during
wage
negotiations.
When
employers
have
good
political
connections,
wage
decisions
tend to
oppress
employees;
when
employers
have
less
influence,
the
needs of
employees
are
given
more
credence.
At the
same
time, I
do not
oppose
the
process
of using
subcommittees
to set
minimum
wages.
On the
contrary,
I have
always
suggested
that the
Ministry
of
Labour
determine
minimum
wage
levels
district-by-district
or
industry-by-industry.
I advise
this
because
the cost
of
living
in
provinces
with
high
urban
concentrations
is
different
from
that in
provinces
with
greater
rural
concentrations.
Also,
productivity
levels
vary
from one
industry
to the
next.
Thus,
workers
in
different
industries
must
receive
different
levels
of
remuneration
for
their
work.
But
because
primitive
data
collection
systems
now
limit
the
government’s
ability
to do
this, I
suggest
the
government
start by
developing
a system
to
collect
provincial
economic
and
social
data.
This
would
facilitate
the
creation
of
comprehensive,
up-to-date
indexes.
The
government
should
do
likewise
at the
district
and
industry
levels.
Finally,
I
suggest
that
guidelines
for
choosing
committee
members
become
more
stringent.
This
would
better
protect
minimum
wage
earners.
Most
subcommittee
members
would
earn
much
more
than
minimum
wage, so
they do
not
really
understand
the
needs of
bottom-rung
workers.
Therefore,
both
committee
and
subcommittees
should
include
those
who can
truly
represent
both
employers
and
employees.
Using
clear
criteria
to set
minimum
wages
would
allow
wages to
become
both
appropriate
and
beneficial
to
employees.
As well,
it would
prevent
wages
from
becoming
too
burdensome
for
employers.
Minimum
wages
should
stimulate
rather
than
hinder
an
economy.
The most
important
thing is
that
minimum
wages
stop
being a
political
tool,
especially
during
electioneering.
|
