Wage increase begins to bite

national January 04, 2013 00:00


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Workers laid off in some factories as hike rolls nationwide

Hundreds of workers have already lost their full-time jobs and many more are facing the axe in the wake of the government’s much-touted policy to raise the daily minimum wage to Bt300.

Although the new wage rate only took effect nationwide on Tuesday, lays-off are already being reported. A number of businesses have also begun relocating their manufacturing bases to neighbouring countries such as Cambodia, where wage levels are much lower.

In Buri Ram, two garment factories have laid off more than 120 workers. In Si Sa Ket, more than 50 workers visited the local premises of the Social Security Office (SSO) yesterday to claim unemployment benefits under the social security scheme. Officials, meanwhile, are busy answering phone calls from employers who are planning to put a halt to hiring in the face of the sharp wage hike.

Elsewhere, the climate of job insecurity has spread to labour-intensive factories, where employers are clearly struggling with the big rise in operating costs. The Bt300 minimum wage is being cited in many quarters as the main cause of the problem.

Unlike in the seven large provinces that saw an early launch of the minimum wage last April, many of the 70 less-industrialised provinces are finding it extremely difficult to cope with the wage hike. The wage hike here has been especially sharp given that the daily minimum wage in these provinces had been much lower than Bt300. The old wage rates in the rest of the country were far lower than those offered in the big provinces such as Bangkok.

“Many employers are definitely unable to pay Bt300 a day to their workers. So they have now reduced the number of workdays from six to just four a week,” Lamphun Chamber of Commerce secretary-general Narong Thammajaree said yesterday.

Atiphum Kamthornworarin, honorary chairman of Lampang’s Federation of Thai Industries branch, complained that employers would not be able to shoulder the wage hike because workers would still only deliver the same quantity and quality of work per day as before.

“Several employers are now paying their workers according to the amount of work they do instead,” he said.

He said if the employers did not change employment conditions, the daily minimum wage of Bt300 could have thrown them out of business.

In Nakhon Pathom, more than 80 workers arrived at work yesterday only to find their factory had suddenly closed. They now fear the worst.

“Is this our New Year gift?” worker Mantana Sa-thong-ord asked sarcastically.

She said that instead of receiving the higher wage, she and her colleagues were now facing imminent dismissal.

Director-general of the Department of Labour Protection and Welfare Pakorn Amorncheewin has so far insisted that the overall employment situation remains normal.

“There’s no sign of massive layoffs,” he said. Most of the factories that were now closing down had long been operating in the red, he added.

Pakorn promised that his department would help laid-off workers claim the compensation and benefits to which they were entitled.

“In addition, the SSO will offer unemployment benefit, and the Employment Department can help workers find new jobs,” he said.

Labour Minister Phadermchai Sasomsap said the government had already provided several measures, including the cut in corporate income tax and free training to help employers cope with the sharp wage hike, and was preparing to introduce more.

Phadermchai will meet with Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong today to consider additional measures.

PM’s Office Minister Nivattha-mrong Boonsongpaisal said the government was closely assessing the impacts of the rise in the minimum wage. Phadermchai said the policy’s impacts should be clear by March.

A Myanmarese worker in Ranong who gave his name as Jila yesterday lamented that he would lose his job because his employer of three years could not afford to pay Bt300 a day.

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