Author Topic: Minimum Wage Hike Test in Khon Kaen  (Read 1956 times)

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Offline Johnnie F.

Minimum Wage Hike Test in Khon Kaen
« on: July 12, 2011, 11:45:49 AM »
Pheu Thai's rare model employer?

As academics and business people bash the Pheu Thai party's populist 300 baht minimum wage policy as unrealistic and certain to induce runaway inflation, one entrepreneur in Khon Kaen has implemented the rate in the expectation his business will thrive as a result.

The proposed, immediate, steep wage hike – 70 percent up on the average nationwide minimum wage of 175 baht – has drawn strong opposition from employers.

But Khon Kaen-based Sueksa Phan Khon Kaen Company has substantially increased the salaries of  staff, with the lowest-ranking employees such as janitors now earning 9,000 baht a month instead of 5,000 baht -  effective as of July 4.

Prasom Prakhunsookjai, the owner of the company, said that the salary rises would cost his company about an additional one million baht per month, which would cut his profit to just 5 to 8 per cent.

 However, he said, he was more than willing to accept this.

The effect from of pay rise was already evident in improved staff  morale and work levels.

"Many staff members who used to just watch or chat among themselves when customers walked in are now approaching customers as soon as they arrive  and are quick to offer service.

"The sales staff are now very enthusiastic and work harder,” he said.

Sueksa Phan has about 280 staff. Its head office  is a three shophouse building in the Khon Kaen provincial town seat, with branches in Muang Phon, Chumpae and Kranuan districts, Loei and Nong Khai provinces and also in Lomsak district of Phetchabun.  All the employees are permanent staff.

Founded about 30 years ago, the company sells stationery, books, office machines and furniture such as desks, tables and cupboards.  At its peak during the former Thai Rak Thai government, the company’s annual sales turnover was about 900 million baht.  Last year it was about half its peak.

A former Khon Kaen MP under the banner of Rassadorn party, Mr Prasom appears to have a different business philosophy from his peers.  He believes that with his employees more devoted to the company and more pro-active with the customers, sales will gradually pick up  -- and that means more profits for the company.

In his belief, increasing minimum wage to 300 baht a day without passing the buck to the consumers by jacking up the prices is quite feasible if employers - be they manufacturers, wholesalers or retailers – accept a lower  profit level for a while.

He said he was satisfied with just 5-8 per cent profit.  He believed the burden of the  wage rise would be compensated by increased sale overall, because  employees will have more take-home pay to spend.

“It is not true that most of the SMEs (small and medium enterprises) will be forced to close down or to cut staff if the new minimum wage rate is to be strictly enforced,” he said.

"Entrepreneurs must  sacrifice for the good of society.”

Mr Prasom is optimistic that the Pheu Thai-led government’s economic policies will boost the national economy which, in turn, would help local businesses and enable employees to earn more money.

An optimist, Mr Prasom may represent a very rare breed among  entrepreneurs -- most of whom are seriously concerned about the new minimum wage which they believe will have a huge impacts on their businesses.

Yongyuth Chalaemwong, labour development research director of Thailand Development Research Institute, for instance, wants the 300-baht minimum wage plan to be scrapped and replaced by a raise in per centage terms,  depending on the conditions in each province, or an increase of 70 percent nationwide.

Bangkok Post
Fun is the one thing that money can't buy
 

dirtydog

  • Guest
Re: Minimum Wage Hike Test in Khon Kaen
« Reply #1 on: July 12, 2011, 01:00:31 PM »
If staff productivity is up he will most likely start firing staff they onlly get so many customers perday so only need so many salestaff, the dross will be kicked out.
 

Toddy

  • Guest
Re: Minimum Wage Hike Test in Khon Kaen
« Reply #2 on: July 12, 2011, 01:53:50 PM »
Goodness, is the min wage only Baht 175 - I thought that it was about Baht 250?
 

Offline Johnnie F.

Re: Minimum Wage Hike Test in Khon Kaen
« Reply #3 on: July 12, 2011, 02:19:05 PM »
At present it's 179 Baht per day in Korat. But that's the minimum wage. How much you really gotta pay depends upon skills and reliability of the people you employ. I rather pay 300 Baht for somebody actually working and not just wasting material, breaking tools, entertaining the other workers or even obstructing the whole job by their unreliability. But it's hard to find those. Most skilled and reliable people don't work as employees, they run businesses by themselves, then having the same problem of not getting skilled and reliable co-workers.
Fun is the one thing that money can't buy
 

Toddy

  • Guest
Re: Minimum Wage Hike Test in Khon Kaen
« Reply #4 on: July 12, 2011, 03:07:33 PM »
I agree. I wouldn't expect anybody to work for such a pittance. Our builder pays his guys about Baht 250-275, or something like that. I still think that is cheap.
 

Offline Johnnie F.

Re: Minimum Wage Hike Test in Khon Kaen
« Reply #5 on: July 12, 2011, 04:08:02 PM »
But I also agree with DD. if the minimum wage gets that high, a lot of "bystanders", doing auxiliary work only, won't be needed anymore.
Fun is the one thing that money can't buy
 

Toddy

  • Guest
Re: Minimum Wage Hike Test in Khon Kaen
« Reply #6 on: July 12, 2011, 05:08:33 PM »
I find that there are a lot of people "employed" in shops who seem to do bugger all but stand around. Better to pay those who are good, and are actually needed, better and get rid of the dross. I know that this creates its own problem, but what to do?
 

Offline Johnnie F.

Re: Minimum Wage Hike Test in Khon Kaen
« Reply #7 on: July 12, 2011, 05:23:25 PM »
A lot of shops are family-run. Families also do provide the welfare system up here. For many families it might be better to have some of their relatives standing around the shops in plain sight instead of having them create mischief somewhere else, if left unattended.
Fun is the one thing that money can't buy
 

 



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