Thailand’s cheap labour gets more expensive
BANGKOK COME April 1, Thailand will join the ranks of South-East Asia’s increasingly costly labour markets, with a hike the minimum wage that not everyone is convinced will be in the workers’ best interests.
The ruling Pheu Thai party is to keep a campaign promise and raise the minimum wage in Bangkok and five surrounding provinces, plus Phuket island, to a flat 300 baht (9.80 dollars) - about 295 dollars a month.
The new rate, which represents an increase of around 40 per cent, will be applied nationwide next year.
Wages are on the rise in China and South-East Asia, historically the favourite investment destinations for industries reliant on cheap labour, and where the minimum wage is earned by the majority of workers.
In China during the first three months of this year alone, workers’ wages rose more than 10 per cent, reaching 230 dollars a month in Shanghai, 240 dollars in Shenzhen and 200 dollars in Beijing.
In Manila, the minimum wage is about 10 dollars per day, and in Jakarta, it is about 169 dollars per month, after recent increases.
The Vietnamese government in October raised the minimum wage from 66 dollars a month to 94 dollars, a 42-per-cent jump. In Cambodia and Myanmar, average monthly wages are still low at 66 dollars and 50 dollars, respectively.
Malaysia has no minimum wage yet, but Prime Minister Najib Razak was expected to announce one soon, perhaps on May 1. It is likely to be set at between 266 to 300 dollars a month.
Boosting minimum wages has become a means of winning votes in Asia’s emerging democracies, and keeping a lid on dissent in the not-sodemocratic countries.
Wage hikes of 13 per cent per annum are part of the fiveyear plan in China, as the world’s most populous nation strives to bolster domestic spending, keep people satisfied and join the ranks of the rich countries.
“Rich countries pay rich wages,” said John Ritchotte, International Labour Organisation’s specialist on labour relations in South-East Asia.
“That’s a lesson that seems to be lost on other policy makers in the region, like Thailand, where the only model they have is a low-wage one.” Bangkok may be raising wages, he said, but it is going about it the wrong way. “The 300-baht decision is a political one, not an economic one,” Ritchotte said.
Better would be to allow workers some organised representation to negotiate themselves a share of improving profits, he said.
That said, he added, a wage increase was overdue. “It’s clear that average wages in Thailand, adjusted for inflation, have been declining over the past ten years so they clearly need to increase them.” The Democrat party, now in opposition, is also critical of the move.
The party promised to boost minimum wage by 25 per cent nationwide as part of their unsuccessful bid for re-election in July.
But it was one-upped by the Pheu Thai Party, which promised a flat 300 baht wage nationwide, ignoring the previous system of different rates for different provinces.
The flat rate proved a winning campaign strategy, acknowledged Democrat deputy leader Korn Chatikavanij. “But frankly, the 300-baht rate is a big adjustment for manufacturers to adapt to, especially right after the floods,” Korn said.
Floods across Thailand’s central plains in October and November killed nearly 700 people, wrecked millions of homes and hectares of crops, and forced hundreds of factories to shut down, disrupting the global supply chains in the electronics and automotive sectors.
Now, just as some are reopening, the factories are facing a hike in minimum wage which will affect most of their employees, along with the majority of the country’s workers.
Thailand’s cheap labour gets more expensive AFP HONG KONG HONG KONG’S court of appeal on Wednesday overturned a landmark ruling that opened the door for thousands of foreign maids to claim residency in the southern Chinese city.
“It must be up to the sovereign authority to decide the extent to which the status of permanent resident should be conceded to foreign nationals,” Judge Andrew Cheung wrote in a 66-page judgement accepting the government’s appeal.
The High Court ruled on September 30 last year that Philippine domestic worker Evangeline Banao Vallejos had the right to request permanent residency status, something that had been denied to foreign maids until then.
But the government argued that the authorities had discretionary power to decide who was eligible for residency, rejecting arguments that restrictions on maids were unconstitutional and discriminatory.
The three-judge panel on the court of appeal unanimously accepted that argument, saying the High Court could not override the government’s authority to decide who can live in the city and who cannot.
The decision will come as a major blow to tens of thousands of maids who could have been eligible for residency status if the Vallejos case had been established in law.
“It is a fundamental principle in international law that a sovereign state has the power to admit, exclude and expel aliens,” Cheung wrote.
Vallejos’s lawyers said they would take the case — the first of its kind in Asia — all the way to the Court of Final Appeal, Hong Kong’s highest court.
“The interpretation of the law creates a second-class citizen,” counsel Mark Daly told AFP.
“We will continue on to the Court of Final Appeal until we get justice.” The government welcomed the ruling and said it would not process any residency applications from domestic helpers until the courts delivered a final determination.
“The government anticipates that the present litigation will likely proceed to the Court of Final Appeal,” Security Secretary Ambrose Lee told reporters.
Rights advocates said the ruling sent the wrong message to other Asian nations that relied on poorly paid maids from less wealthy countries to toil at jobs locals no longer wanted to do.
“It’s not just about staying in Hong Kong — we don’t want to be excluded,” Asian Migrants’ Coordinating Body spokeswoman Eni Lestari said outside court.
The group represents over 10,000 foreign maids in Hong Kong, a glittering financial and banking centre of some seven million people, including almost 300,000 foreign domestic helpers mainly from Indonesia and Philippines.
HK court overturns maid residency ruling