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Thai workers 'unable to pay bills' despite pay rise
Publication Date : 27-04-2012
Despite the increase in the daily minimum wage to 300 baht (US$9.7), blue-collar workers' debts have risen this year due to the effects of last year's floods and the rising cost of living, according to a survey by the University of the Thai Chamber of Commerce (UTCC).
The survey showed the debt burden on Thai working families increased from 87.64 billion baht ($2.84 billion) in 2011 to 91.71 billion baht ($2.97 billion) this year. The debt level this year is the highest since the survey was launched in 2009.
The UTCC said the increase in the daily minimum wage to 300 baht would encourage the country's economy to grow by another 0.5 percentage point, as 70-80 billion baht will be injected into the economy. Spending by Thai people during Labour Day on Tuesday is expected to rise by 10.53 per cent to 1.79 billion baht ($58 million) this year, it said. "Thai labourers still have inadequate income to cover their daily expenses, despite the government's policy to raise the daily minimum wage to 300 baht on April 1. Although some labourers are satisfied with the higher income, most still feel they cannot cover their daily expenses," said Thanavath Phonvichai, director of the UTCC's Economic and Business Forecasting Centre.
Thoug PM Yingluck Shinawatra has expressed concern over the high cost of living, the government has not come up with any concrete plans.
Based on the survey of 1,198 sample workers, labourers' debt burdens have increased this year, most of it owed to banks and loan sharks. Individual workers' average monthly debts have risen from 5,263 baht ($171) last year to 5,773 baht ($187) this year. The high debts have led to lower savings.
Thanavath pointed out that Thai workers feel their rising incomes do not cover their daily expenses due to skyrocketing prices of goods and fuel, and interest rate hikes. To solve the problem, workers have to borrow more and draw on their savings.
Most of the 5 million workers covered by the new minimum wage want their pay to rise further, in line with their spending, Thanavath said.
A suitable minimum wage for daily workers this year is seen as 356.68 baht ($11.6), the survey showed. Workers also said the minimum wage should be set at 435 baht ($14.1) a day in the first three years after the Asean Economic Community takes effect in 2015, and at 546 baht ($17.7) for the following five years.
However, workers are also concerned about their employers' cost burden, and about job security, Thanavath said. About 25 per cent of respondents want incomes to rise every year and 16 per cent wanted to see rises every two years. About 15 per cent said they didn't want the minimum wage to rise above 300 baht, as they were worried employers would hire cheaper foreign workers.