Published on May 01, 2005

However, basic-pay increases must be matched by higher productivity if the country is to remain competitive

On the occasion of the National Labour Day, the government can be expected to renew its commitment to upholding the welfare of workers, much as it has done in previous years. And, in accordance with what has become a equally predictable way of recognising the occasion, workers will probably take the opportunity to put forward their proposal that the daily minimum wage be raised and demand the government do more to better protect their rights.

However, this year the workers’ call for an increase in the minimum wage should be seriously considered by the government in view of the higher cost of living resulting from higher oil prices. This situation is affecting both the cost of the goods and services that people must purchase each day and the costs that manufacturers must face in conducting their business.

In recognition of all this, any move to adjust the minimum pay from the current Bt135-Bt170, depending on the local cost of living, must be made in conjunction with a serious effort to improve productivity and develop relevant skills to make sure both the country’s labour and manufacturing forces stay competitive.

Although the minimum wage usually applies to unskilled or semi-skilled workers, it is referred to by employers everywhere as a reference to make adjustments in their pay scales for all workers.

The demand by major labour unions this year is for the government to raise the minimum pay to Bt200, which they say should apply in all parts of the country regardless of differences in the local cost of living.

Such a dramatic increase is unlikely to be accepted by employers, particularly those in labour-intensive industries, or by the government at a time when the economy is showing signs of weakness. But a significant adjustment still has to be made if the minimum acceptable standard of living of workers is to be protected.

Labour unions have been campaigning for the national-wage committee, which fixes the minimum daily wage, to amend the labour law by defining the daily minimum wage as an income sufficient for one worker and two other family members to live on.

A debate on this issue will likely continue.

In any case, whatever the new daily minimum wage may be, workers, the government and employers must redouble their efforts to raise productivity and improve the competitiveness of the country’s workforce through skills-development training and adult education.

Thailand, as an export-led economy, has for years been squeezed between more technologically advanced competitors and those with lower labour costs. The country has not been very successful in its effort to move up the technological ladder towards higher value-added production because of a persistent failure to improve workers’ skills.

Another problem that requires close attention from the government is the “flexible labour force” employment strategy that was adopted by many employers in the aftermath of the 1997 crisis and continues to be widely practised.

Under this arrangement, employers keep their production costs low by hiring workers under a short-term contract or by outsourcing arrangements to avoid observing workers’ basic rights and the responsibility to foot the bill for their social security benefits.

That such practises are still in effect so many years after the crisis should raise a red flag among the relevant authorities. The Labour Ministry and law enforcement authorities must improve their policing to see to it that employers strictly observe labour laws. To increase compliance with the country’s labour standards, the government must seek out and punish corrupt officials who take bribes from unscrupulous employers to look the other way.

In the spirit of the National Labour Day, which coincides with the celebration of international labour celebrations, Thai workers and the general public must not forget that there are also hundreds of thousands of migrant workers from neighbouring countries who are living and working in this country and providing much-needed services.

Too many of these people, even those who are legally registered, continue to suffer from abuses, including the worst forms of exploitation, shocking physical abuse and other appalling acts of outright inhumanity. And many of these people continue to receive considerably less than the minimum wage for the same work done by their Thai co-workers.

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