Thai at Heart, on 2012-05-08 12:03:47, said:
brit1984, on 2012-05-08 11:49:34, said:
Minimum wages are a way to stop exploitation of workers. Even Henry Ford worked that out a long time ago. The effects of moving large populations of under minimum wage workers into countries has been studied for a long time, and the problems about what to do with this "new" population has been studied for ages and it does present difficulties. I would suggest that if the companies want to use Cambodian or Burmese labour, they should relocate over there.
Thailand and many other countries have a minimum wage, and have had for many decades, so I don't know why you are suggesting that preventing exploitation in and of itself is a bad thing. As for the effects, if you allow the minimum to be circumvented legally by importing labour, I would suggest that the increase in unemployment and social problems associated with this outweighs the overall economic benefits of compelling companies to pay the local labour force, rather than resorting to importing labour.
Why not import all foreign labourers into the country, for all jobs, so that the Thai's can sun themselves on their deck having a beer whilst all the jobs are done by others? Oh of course, that would mean the country would have to provide for 100 million people.
We are forever told that Thailand is for Thai's, unless of course you are a minimum wage worker, where you face unemployment because your job will be taken by an import. Hardly the point of the policy at all.
Whoa there Nelly. Hold on a minute. I will refrain from going ad hominem on you, but I would like to give you a little reality check.
I think most will agree that we enjoy the freedoms of living in a free-market economy and a free society, and do not desire to live in a communist or socialist system. The basic tenet of free-markets, be it in goods or labor is that the market's invisible-hand will determine real market prices. Economics 101: increases in price reduce demand and the correlate is visa-versa. This works for labor as well. Increase the price of labor and the demand for labor will decrease. This is exactly the blow-back that I have been writing about since the inception of this silly policy on minimum wage. That companies are attempting to increase their numbers of immigrant workers and decreasing the numbers of Thai workers is just one micro-level mechanism by which the employers adapt to legally enforced minimum wage policy.
Please observe: for employers that are already paying above minimum wage, the minimum wage policy has zero effect. The point being that those jobs and those workers have equilibrated at a price above the legal minimum wage due to the productivity of the worker still allows a reasonable profit at that wage.
If you want to improve the lot of the poor Thai worker the one and only one non-inflationary solution is to improve the productivity of the worker (read that as EDUCATION).
The rhetoric that minimum wage helps exploited workers get their fair lot has been disproven in balanced and well executed studies (check my previous posts for references if you are interested).
If the Thai worker decided to obtain a skill where he can demand a price for his labor above the minimum wage, then he adds a net positive to the economic equation. As to your comment that companies which wish to use Myanmar workers should locate their operations in Myanmar, you fail to recognize the positive effects of a company which pays Thai taxes, buys raw materials, and other inputs in Thailand add a net positive to the Thai economy.
In my industry (shrimp farming), if we were to follow your brilliant advice, Thailand would be out of a multi-billion dollar export industry as nearly all laborers in shrimp processing/farms are non-Thais. At our farm, we have tried to pay higher than 300B in an attempt to attract a more loyal and better work ethic Thai worker, but this failed miserably (I believe has much to do with the current education's focus on testing and lack of standard discipline and manners education in the home).
Finally, living in an expat dominated resort town, where the typical Thai worker is simply incapable of saying "Kawb Khun" or "Khor Toht" (thank you and sorry), and look like they want to die when they are working, the import of smiling, hard working burmese is a welcome site. Let the market decide what is a fair price for labor and if you want a path out of poverty, minimum wage legislation is not a substitute for the necessary, but difficult improvement in education.





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