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Labour Permanent Secretary: Wage hike increases labour productivity by 12%

 
 
Date: 
15/01/2013

 

           Permanent Secretary of Ministry of Labour reveals that workers’ productivity increased by 12 percent last year due to the government’s 300 baht daily minimum wage policy compared to the average growth of two to three percent per year without the policy, while the jobless rate stays at 1,000. Meanwhile, he asks operators to come up with plan to improve their productivity.

 

 

 

 

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        Mr. Somkiat Chayasriwong, Permanent Secretary of Ministry of Labour, said the jobless rate now stands at only 1,000, dismissing reports that the wage hike policy has caused high rate of unemployment.

        Mr. Somkiat, however, urged employees to adjust themselves to improve their skills, saying they could, otherwise, lose their job as employers would need higher productivity to offset higher wages.

        He said the policy should not have much negative effect in overall and should have great positive effect in the long run, pointing out that his ministry has closely monitored labour productivity data since May 1, 2012 when the policy was first implemented in seven provinces and found that labour productivity increased by 12 percent, from the average of two-three percent per year without the policy.

        He said the wage hike gave incentive to workers to improve their skills to match the demand of workplaces. In the long run, Thai workers will become more skillful, raising the competitiveness of the country.

        The permanent secretary of Ministry of Labour said it is better that Thailand adjusts its minimum wage now so that Thai workers could have more time to improve their vocational skills since in two years to come Thailand will become a member of the ASEAN Community in which labour can move freely and competition for market and labour will become more intense. Thai workers then will be able to compete in the international level.

        Mr. Somkiat said firms also need plans to improve productivity of their current employees and their productivity, which might include the use of technology. Workers whose contract has been terminated also have the rights to claim for benefits under the labour protection laws, he noted.

        He further said that his ministry has organized a course name “nine behaviors for career success”, which interested workplaces can send their employees to join for free of charge. For application contact any provincial centre for skill development.

        Meanwhile, Mr. Veera Ngamsanga, director of Mitsubishi Elevator Asia Co. Ltd. in Amata Nakorn Industrial Estate, said he can understand why the government moves to improve workers’ skills following the implementation of the 300 baht daily minimum wage policy but he expects the government to ensure that workers have right work attitudes in all aspects in the long run, including safety, frugality, discipline, toleration, teamwork and other responsibilities.

        He said he is aware that the ministry has made huge effort to improve workers’ work attitudes to improve their productivity but he hopes to see greater coordination between the labour and the education ministries.

        However, he said firms are worried about the fluctuation of the minimum wage rate two years from now. Previously, the determination of the minimum wage rate was based on available information in each year so firms could forecast how much the wage rate could be in the next five-ten years, which helped them make up their decision to invest. However, nobody can now predict what the wage rate would be in three year times and firms cannot estimate their future cost.

 

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