Is 300 Baht minimum wage in Thailand a good policy tool to reduce poverty,
measured by the impacts on employment and average wage?
Authors: Rujikorn Thangstapornpong Pun Porananond Supervisor: Per Skedinger
Examiner: Dominique Anxo Date: June 2017 Subject: Economics Level: Bachelor Thesis Course code: 2NA12E
Abstract
Minimum wage is a topic that has been of particular interest for policymakers and economists in Thailand since it has been one policy instrument aiming at reducing poverty. In , 2013, minimum wage was increased from 239 Baht to 300 Baht per day, an increase by 26 percent. The main objective of this essay is to assess the extent towhich the 300 Baht minimum wage is a good instrument to reduce poverty. Using a difference-in-difference we analyse the impact of minimum wage on employment and average wage. Minimum wage in Thailand does not cover workers inthe informal sector . the results of our estimation show that minimum wage provides minimal disemployment effects in the formal sector in the short run, but minimum wage have a positive effect on average wage.
1. Introduction
Poverty is one of the everlasting issues that Thailand confronts. Many Thais have low quality of lives due to the lack of earnings. In 2012, approximately 8.4 million of Thais were living below poverty line, accounted to be around 13 percent of total population in the country. However, in 2015, a number of poor people reduced to 4.85 million or only around 7 percent of total population in the country. Moreover, Thailand has been moving from a low middle income country to an upper middle income country since 20111. This poverty reduction has reflected the importance of policy analyses, called mininum wage policy, which has occurred since 1973.
The Thai government decided to increase minimum wage level with a hope that it would rise income for workers and reduce a number of poor people in the country. 300 Baht minimum wage policy was first launched and tested on 7 pilots provinces: Bangkok, Nonthaburi, Pathumthani, Samut Prakarn, Samut Sakhon, Nakhon Pathom and Phuket in 2012 and it later applied to all provinces in Thailand in 2013.
Hence, this thesis aims at studying whether 300 Baht minimum wage policy is a good economic tool to alleviate the issues of poverty problem in Thailand by observing the change in a number of employees and their average wage in formal and informal sectors from 2009 to 2015.
The remainders of the paper are followed by the descriptions of poverty problem in Thailand since 1986 and the regulation of minimum wage policy in section 2, both theoretical and empirical literature in section 3, the theoretical framework in section 4, the data used for the analyses in section 5, the methodology used for estimating whether 300 Baht minimum wage in Thailand is a good policy tool to reduce poverty in section 6, the discussion of the results in section 7, the short summary in section 8,and the result and conclusion in final section.
1
According to World Bank.
2. Historical summary2
2.1 Poverty problem in Thailand since 1986
Thailand, a small country that lies in Southeast Asia with more than 60 million people, has long been considered as a poverty country for the past decades. In 1986, the rate of more than 67 percent of population in Thailand who lived below poverty line reached its peak due to these following factors.
First, most of the Thais from the Northeast of Thailand or rural areas were involved in agricultural sectors, but main income of the country was contributed from industrialized businesses. This caused a drop in demand for agricultural products, which led to unemployment problem among agriculturalists. Second, there was a big contrast in people’s standard of living between Bangkok and rural areas. The government invested too much money to improve Bangkok and left many suburb areas undeveloped. People in many provinces in Thailand still could not get access to public transportations, electricity, education and healthcare. Furthermore, with a better living condition in the city, more educated people around the country competed and left their hometowns, as a result of the problems among low-skilled and low-wage workers in the countryside areas.
However, a number of poor people in Thailand had decreased over time in which it reduced to 4.85 million people or about 7 percent of total population in the country in 2015. This poverty reduction succeeded from these following policies. First of all, Thai government supported and encouraged the “export oriented policy,” which shifted Thai labour from agricultural workers to labour intensive workers for international investments. Thailand has become the main manufacturing hub in Southeast Asia, especially for Japanese manufacturers. Japanese foreign firms have relied heavily on both natural resource-based and labour-intensive industries from Thailand such as electrical appliances, electronics, transportation equipment, metal products, textiles, and fishery products. Hence, a massive change from agricultural based country to industrial base labours contributes to the increase in labour demand for manufacturing firms and help Thai people in terms of wider job opportunities and larger amount of earnings. Secondly,
2 This historical summary is based on Krongkaew, M. (1985) , Dilaka Lathapiipat and Cecilia Poggi (2016)
And Poapongsakorn, N., & Tangkitvanich, S. (2000).
Thailand has become a destination for many tourists around the world. With a government support in promoting foreigners to travel in Thailand, many businesses have been opened in other provinces such as Phuket, Krabi and Chiangmai, as a consequence of more facilities and careers that are available for local people.
2.2 Minimum wage in Thailand
Minimum wage is a policy that aims at improving the economic conditions of the working poor by setting minimum level of wage, paid by employers. The first minimum wage policy in Thailand was launched in April 17th,1973by focusing on the same wage standard for all labours in every province and every occupation and it has been adjusted yearly by the government. Then, Thailand faced Asian financial crisis or “ Tom-yum-koong” in 1997 and this financial collapse occurred after Thai government was forced to float Thai Baht due to the lack of foreign currencies to support its currency pegged to the U.S. dollar. The government stopped adjusting minimum wage to support many firms that were shut down and helped them to recover from the crisis with the lower costs of hiring employees.
In 2001, the government decided to readjust the level of minimum wage, which had different rates in each province and in each occupation. Afterwards, the Thai Rak Thai Party announced the 300 Baht minimum wage policy in 2011 during election by increasing minimum wage from 239 Baht daily in 2012 to 300 Baht3, which caused a large increase around 26 percent. After winning the election, the 300 Baht minimum wage policy was enacted by the Thai Rak Thai government and applied to 7 pilot provinces in Thailand in 2012 and widely used in the whole country on January 1st, 2013 onwards. 300 Baht minimum wage policy is given to the daily wage workers who are specifically working in formal sector industries. Those who involve themselves in agricultural works, fishery, any government administration or state owned enterprises, homeworkers, and domestic workers are not aided by this policy.
According to the Ministry of Labour in Thailand, workers would be given daily wages of 300 Baht under the restriction of no more than 8 working hours per day and less than 48 hours per week with safe environment. However, if job descriptions relate to risky and dangerous working
3 “Baht” is a Thai currency or also can be written as THB. Hence a 300 Baht is worth around 10 US. Dollar (According to
XE currency converter 1 USD = 34.5012 THB)
conditions unavoidably such as working with dangerous chemical products in both producing and exporting, workers are limited to work 7 hours per day and 42 hours per week.
4If employers of any firms do not follow the law stated above, they have to pay for fine, ranged
from 5000 Baht to maximum 200,000 Baht, and will be imprisoned not exceeding 1 year.
3. Literature review
3.1 Theory
Minimum wage is one of the tools for anti-poverty policy. The increase in minimum wage might have negative effect in declining employment. In 1800s, John Bates Clark, the most pre-prominent American neoclassical economist on minimum wage, was best known for marginal productivity theory of distribution. The wage of labour, related to the marginal product, can be suggested that the minimum wage should not be set higher than labour’s marginal productivity. He argued that minimum wage did not tend to increase employment. Like Clark, George Stigler believed that there was a decrease in employment, resulting from the increase in minimum wage. At that time, the theory of supply and demand was set up to give the explanation why employment decreased and Clark saw only the problem when minimum wage was set above equilibrium wage. Since there had been no empirical data in that period, the result would base on theory and reason behind it. Supply-demand model that set minimum wage as price floor is the simple model that sets minimum wage above equilibrium wage and creates excess supply.
Graph 1
Monopsony is supply-demand model that has only one buyer in the market and acts as a price maker. According to the graph, marginal cost curve is above supply curve for all levels of
4 According to XE currency converter the fine can range From 145 USD to 5800 USD
employment. The minimum wage in this market is exception since minimum wage has provided positive effect that increases employment in which minimum wage is set between point C and D. if government sets minimum wage at point D, they will hire employees at the same number as competitive market, as a result of no unemployment.
Graph 2
Also, Stigler concerned two effects on minimum wage. The first effect is value marginal product of labour, which is below minimum wage. The labour depends on the elasticity of demand. If the elasticity of demand is high, it means that employers are strongly responsive to the wage of labour. Therefore, they will hire a fewer number of workers because the cost of hiring increases. The second effect is positive shock in productivity, which means that the output increases or the productivity of labour increases, caused by low-wage worker who are fear of poverty or employers who implement the new technology that can provide the same tasks as workers. Since low-wage workers have been a majority in manufacturing, an increase in productivity of low-wage workers play an important role in the market. Those shocks may reduce the effect of minimum wage on unemployment, but still cannot eliminate it.
3.2 Empirical Evidence
For many years, minimum wage has been an ongoing debate among economists. Some researchers have advocated minimum wage scheme or some might have perceived it as a welfare loss for society. Thus, by analyzing through these following empirical studies that estimate the impact on minimum wage of poverty, welfare and employment lead to in-depth understanding about minimum wage policy.
Ximena Del Carpio ,Julián Messina,Anna Sanz-de-Galdeano (2014) in Minimum Wage: Does It Improve Welfare in Thailand?, illustrate the impact of minimum wage policy on household poverty and consumption per capita using difference-in-difference approach that relies on exogenous policy variation in minimum wage across provinces. Moreover, the researcher found that an increase in minimum wage increase actual wages in general and they do so more for female and young workers than for prime-aged male employees. But they found that the minimum wage reduces the probability of being employed, especially among women and elderly workers. Moreover, they do not find the evidence that the increase of minimum wage increases are pushing workers into the uncovered sector. Lastly the researcher suggest that the minimum wage increased inequality at the bottom half of the distribution but they are inconclusive about the scope of minimum wages for poverty reduction in Thailand.
Nevertheless, The study of Ximena Del Carpio ,Julián Messina,Anna Sanz-de-Galdeano (2014) observed the impact of minimum wage from year 2001 to 2011 which the policy are regulated differently from the 300 Baht minimum wage policy that we analyzing in this thesis for instance the level of minimum wage were set differently in each provinces.
Borjas (2015) illustrate a model of employment level when there is minimum wage. In 1938, The U.S. federal government introduced minimum wage set at 25 cents an hour and only 43 percent of workers were covered by the minimum wage. Moreover, he found that once the price floor is higher than the equilibrium wage. it is affected the employment to fall. Some worker might become unemployed since they are displaced from the job they worked. The level of the minimum wage is the factor that affects the unemployment rate.
Jan Rutkowski (2003) in Is minimum wage Curse or Cure ? Presents pros and cons side of regulating minimum wage policy along with suggesting nine principle to have a prudent administration. Furthermore the researcher introduce a methodology to measure an impact of minimum wage by using the ratio of minimum wage to average wage. (Minimum wage bite). Moreover, Rutkowski also illustrate the key to tests whether minimum wage a right policy to help poor people by referring to two main question which is “Do the low-paid workers tend to be poor?” and “Do the poor families tend to have low-wage workers?”. By presenting the evidence of Poland
empirical study to show that’s only one’s four of low-wage worker tend to be poor and only six percent of poor people are low’s wage worker. Hence, the benefit is accrued to non-poor family instead.
Neumark, D. & Wascher, W. (2002) in Do minimum wages fight poverty?
Present the evidence on the effects of minimum wage on family incomes. Illustrate the impact of minimum wage that the number of non-poor families that fall into poverty is larger than the estimated increase in the number of poor families that escape poverty. This result suggest that minimum wage may raising and boost income of some low wage worker in poor family while the increase in minimum wage might reduce number of non-poor employment and effect family’s earning and cause them to fall into poverty level.
As a result the effect of the people who become poor is more than people out of poverty level. Hence the evidence suggests that with the increase in minimum wage has both effect in employment level and poverty.
Kawaguchi, D, & Mori, Y (2009) in Is Minimum Wage an Effective Anti-Poverty Policy in Japan? Study whether is the minimum wage is anti-poverty policy and whether raising the minimum wage reduces employment for unskilled workers. The study show that the worker that more likely to employ at minimum wage rate are female workers, workers in rural area and female in retail or food industries. The higher minimum wage is a result of decreasing youth male employment. This implies that there is negative relationship between minimum wage and male high-school graduates. The increase in minimum wage do not contribute to the disadvantage sectors, hence it also leads them into deeper poverty owing to the job lost for low-skilled workers. Minimum wage is not powerful policy for soothing poverty. There are some alternative policies such as earned-income tax credit (EITC) that can alleviate the poverty.
Hence, by evaluating both theories and empirical evidences, we have found that we can develop the methodology of difference-in-difference in employment and average wage to our analysis which has been done in Ximena Del Carpio ,Julián Messina,Anna Sanz-de-Galdeano (2014). Moreover the case study of Poland in Jan Rutkowski (2003) could help us relate the effectiveness
of minimum wage policy and poverty problem in Thailand using two relevant questions “Do the low-paid workers tend to be poor?” and “Do the poor families tend to have low-wage workers.
4. Theoretical framework
The policy of 300 Baht minimum wage is not covered in all occupations in Thailand. The division of careers can be focused on two different sectors: formal sector and informal sectors. The formal sector refers to 300-baht daily wage workers who mostly work in manufacturing companies or work as couriers while the informal sector is for self-employed workers who are not included in 300 Baht minimum wage policy such as farmers or fishery workers including those who rely their wages on employers’ decisions that are relevant to profits from the businesses or levels of their productivities. Borjas (2015) mentioned the study of an effect of minimum wage on employment level in both cover sector and non-cover sector by using the competitive model. When minimum wage is launched and applied to the jobs in cover sector, its effect firms to bear with higher cost, which results in laying off some workers by employers, as a consequence of moving workers from cover sector to non-cover sector. Impact supply curve in the uncover sector shifts to the right and reduces the uncover sector’s wages. In other words, if it is easy to get minimum wage job in a cover sector, workers from non-cover sector will move to cover sector and this causes the supply curve in the non-cover to shift to the left and results in higher wage.
According to Borjas (2015), the formal and informal sectors are used for estimating the movement of employment. If minimum wage is higher, employment will be cut and workers will move from formal sector to informal sector. The supply curve in informal sector is downward sloping. Because the job in uncovered sector is lower-wage job, workers in this sector may move from informal sector to formal sector in order to wait until they get minimum wage job.
5. Methodological approach
With a deeper consideration, it is interesting to observe whether minimum wage is a good policy tool to reduce poverty by analyzing the change in a number of employees and their average wage.
Firstly, we will calculate “minimum wage bite” in a formal sector, according to Skedinger (2007). The definition of the minimum wage bite is the ratio of the minimum wage to the mean wage, which is used for measuring the relative importance of minimum wage.
Secondly, we will use difference-in-difference method to compare the differences in a number of employees between formal and informal sectors with average wage in pre and post periods in order to see its impact on minimum wage by observing the change in trend between these two sectors and distinguishing between genders separately. Additionally, we define the pre periods from 2009 to 2012 and the post periods from 2013 to 2015.
Thirdly, we will compute raw difference-in-difference to observe a magnitude of the change in specific control groups in both a number of employees and their average wage. We define control groups as formal sector in post periods and treatment group as formal sector in pre periods along with informal sector in both periods. Besides, we will analyze the effects of a policy in both short run and long run. Hence, for short run calculation, we will calculate the difference in employment and average wage one year before and after the policy is used in all provinces.
Due to government’s decision to experiment 300 Baht minimum wage policy on 7 pilot provinces in 2012 without applying to all nations until 2013, we have to exclude the data in 2012 from a calculation so as to avoid bias result. We will refer to pre period in 2011 and post period in 2014 for short run analysis whereas the pre periods from 2009 to 2011 and post periods will be computed from 2013 to 2015 for long run study.
Thus, we are going to use these following equations to calculate the raw difference-in- difference under these following assumptions:
firstly, the pre-reform trends are parallel in treatment and control groups;
secondly, there is no composition change within the two groups after the reform that affects employment;
thirdly, no factor after the reform that affects the employment of the two groups differently; and finally, control groups are not affected by treatment group.
Raw Difference-in-Difference in average wage
DD = (𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝- 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝) - (𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 - 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝)
Where
DD = Difference-in-Difference AvgW = average wage of worker F = worker in formal sector IF = worker in informal sector
Pre = pre period (year before 300 Baht minimum wage policy launched from 2009 to 2011) Post = post period (year after 300 Baht minimum wage policy launched from 2013 to 2015)
Raw Difference-in-Difference in employment rate
DD = �𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝐸𝐸𝑝𝑝𝑝𝑝𝐸𝐸−𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝐸𝐸𝑝𝑝𝑝𝑝𝐸𝐸� − (𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝐸𝐸𝑝𝑝𝑝𝑝− 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝐸𝐸𝑝𝑝𝑝𝑝)
Where
DD = Difference-in-Difference Emprate = employment rate F = worker in formal sector IF = worker in informal sector
Pre = pre period (Year before a 300 Baht minimum wage policy launched from 2009 to 2011) Post = post period (Year after a 300 Baht minimum wage policy launched from 2013 to 2015)
6. Data
Data is aggregate data conducted by National Statistical Office of Thailand (NSO) from the Ministry of Information and Communication Technology. The data is given by taking monthly average wage from 83,880 heads of households who work in formal and informal sectors from 2009 to 2015 (Appendix).
Moreover, we measure and define poor people by using poverty line which is observed from monthly average wage. Therefore, individual who has monthly income below this level is considered as a poor person. Meanwhile, average wage obtained from real wage means it has been adjusted with inflation rate in each year.
Source: The poverty line is conducted by Household Socio-Economic Survey National Statistical Office by using average income approach. The poverty line is conducted in every two to five years.
7. Result
7.1 Minimum wage bite
Minimum wage bite is one of the indicators to measure the relevant importance from minimum wage to average wage. It often uses for describing the minimum wage system and guiding policy decisions. The higher the ratio is, the better the relevant position of minimum wage workers is. However, the larger “bite” of the minimum wage is, the more harmful employment effects occur.
Categorization of minimum wage levels
Source : Jan Rutkowski 2003
Figure1: minimum wage bite.
Source : National Statistical Office of Thailand (NSO) and Own calculation
We can observe that minimum wage bite rocketed in 2013 around 53 percent when 300 Baht minimum wage policy was applied, so it can be implied that more than half of formal workers’ average wage were contributed from minimum wage policy.
Minimum wage level Percentage of the average wage
Low less than
Modest 20 – 29
Medium high 30 – 39
High 40 – 49
Very high 50 or more
13 0.417 0.423 0.53 0.505 0.499 0 0.1 0.2 0.3 0.4 0.5 0.6 2011 2012 2013 2014 2015
7.2 Employment
Figure2: a number of employed persons in formal and informal sector.
Figure2 illustrates a number of employed persons in formal and informal sectors. Over the period, a number of workers in informal sector are always higher than formal sector since Thailand has long been an agricultural country and a majority of Thai workers are still inherited their parents’ occupations. A number of employees in both sectors remained stable over the first five years with almost parallel trend, so it means that the gap between a number of employees in formal sector and informal sector throughout these periods did not change. Though there was a small drop in a number of employees in formal sector in the year that policy launched, the rate climbed steadily in the next consecutive years. While there was a minimal rise in a number of employees in informal sector in year 2013, the rate dropped gradually in the next two years. Therefore, these reflect the movement from informal to formal sectors, which violate the assumption since there has been a composition change within the two groups after the reform of minimum wage policy that has affected a number of employees.
Figure3: a number of male employed persons in formal and informal sectors.
Figure4: a number of female employed persons in formal and informal sectors.
Both figure3 and figure 4 display a number of male and female employed persons respectively in formal and informal sectors and the details of these two figures correlate with figure2, a total number of employed persons in formal and informal sector. To explain more, it can be seen that a
0 2 4 6 8 10 12 2009 2010 2011 2012 2013 2014 2015 ma le e mp lo ye d pe rs on s ( un it: mi lli on )
number of male employed persons
formal informal 15 0 2 4 6 8 10 12 2009 2010 2011 2012 2013 2014 2015 fe ma le e mp lo ye d p er so ns (u ni t:mi lli on )
number of female employed persons
number of workers who worked in informal sector are still higher than formal sector in both genders.
Monthly Average wage
Figure5: average wage in formal and informal sectors.
Figure 5 displays the relationship between average wage in formal and informal sectors. Average wage had increased in both sectors with different rates in each year during the periods of study. Furthermore, average wage of formal sector was always higher than informal sector over a span of seven years since 2009. There was a large fluctuation from 2009 to 2015. We can see that the average wage increased in increasing rate, but there was a noticeable increase since the government introduced the Rice Pledging Policy5 that aimed at subsidizing farmer in 2013 by assigning the Bank for Agriculture and Agricultural Cooperatives and forcing rice mill owners to pawn the price of rice from farmers in a higher price than in the market level, so farmers could get higher price from selling rice, as a result of an increase in average wage for farmers. Since farmers, the backbone of the nation, have been considered as a big portion that included in informal sector, farmers’ higher average wage would result in upward trend of average wage in informal sector totally. After that, the rate of average wage was back to its normal rate because the Rice Pledging Policy was not an effective policy for farmers. Even though the government set the limit of budget
5 Forssell, S., 2009. Rice Price Policy in Thailand.
for this project about6 five hundred thousand millions Baht, budget had been already used up in
the first year because government could not export the rice because of moths. Then, they did not have enough budget to support this project.
Figure6: males’ average wage in formal and informal sectors.
Figure7, females’ average wage in formal and informal sectors.
6According to XE currency converter 500,000 million Baht is around 14, 667 milliond USD.
17 0 2000 4000 6000 8000 10000 12000 14000 16000 2009 2010 2011 2012 2013 2014 2015
Males' average wage
formal informal 0 2000 4000 6000 8000 10000 12000 14000 16000 2009 2010 2011 2012 2013 2014 2015
Females' average wage
formal informal
Both figure 6 and figure 7 illustrate males’ and females’ average wage in formal and informal sectors respectively. The overall trend of both figures shows that average wage of employees who worked in formal sector was obviously higher than employees from informal sector in both sexes throughout the entire periods. Between 2009 and 2015, males’ average wage was minimally larger than females’ average wage in formal sector, but females’ average wage was noticeably lower than males’ average wage in informal sector, especially in 2013 onwards.
7.3 Result from Calculation: raw difference-in-difference
7.3.1) Average wage Average wage short run.
(𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝- 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝) - (𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 - 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝) = (13,576 + 14,248) – (6351+6437) – (11223-4525) = (27,824-12,788) – (6,698)
=8,338
Average wage long run
(𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝- 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝) - (𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 - 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝) =(13,576+14,248+14,427) – (6,351+6,437+6,583) – [(9,961+10,526+11,223) – (3,709+4,088+4,525)] = (42,251- 19,371) – (31,710-12,322) = 22,880- 19,388 = 3,492
From the calculation, we inspect an increase in average wage of 8,338 Baht in short run analysis. This increment of formal workers’ average wage in the post periods is contributed from an increase in minimum wage level that is consistent with a wage-increasing effect of the reform that we also inspect from a rise in minimum wage bite. Moreover, this is consonance with a result of difference-in-difference method that we illustrate through line graph in figure 2, which
can be observed in an outstanding spike in 2013, compared with a parallel trend in the pre periods.
On the other hand, when we study a long run employment effect, we find an increase in average wage of 3,492 Baht in formal sector. We have seen that an increase in average wage for formal workers in long run is less than in short run. This is due to the fact that the change in average wage would slowly revert back to a parallel trend. We, furthermore, also see that the
differentiation in wage gap between both sectors (22,880) is larger after the policy was applied (19,388).
7.3.2) Employment
To observe a magnitude of a change of formal employment and employment gap, we will use employment rate to calculate raw difference-in-difference method (a number of employees in each sector / total population). Since employment rate holds constant for population changes, it may affect a number of employed people. However, we define total population as people, aged from 15 to 60 years old, which are the same ages as employed people in the labour force, stated in the regulation.
Employment short run.
�𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝− 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝� − �𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 − 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝� = (25.45+29.74) – (45.64+40.33) – (27.22- 45.56)
= (55.19 – 85.97)- (-18.34) = -30.78+18.34
= -12.44
Employment long run.
For short run analysis, we have found a decrease in formal employment in post reform periods of 12.44 percent. This reduction in employment rate originated from a rising cost of an increase in wage level affects employers to lay off some workers and substitute native workers with immigrants due to lower reservation wage.
On the contrary, an increase in formal employment rate of 16.46 percent comes from a better cost adjustment for firms in long run. To illustrate this point, when minimum wage level has risen, firm can either reduce a number of workers or rise output prices to maintain and increase firms’ profitability. Therefore, in a long run, firms can take advantage from a rising profit to expand production and demand for more labourers.
Moreover, we also calculate raw difference-in-difference method, divided by males and females. Male employment rate in short run
�𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝− 𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝� − �𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 − Male𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝�
= (13.64+16.06) – (25.09+22.08) – (14.6-24.44) = (29.7-47.17) – (-9.84)
= -7.63
Male employment rate in long run
�𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝− 𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝� − �𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 − Male𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝� = (13.64+16.06+16.49)-(25.09+22.08+21.2) – (14.37+14.77+14.63) – (24.95 +24.3+24.44) =( 46.19-68.37) – ( 43.77-73.69) = -22.18 – (29.92) =7.74
Female employment rate in short run
�𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝− 𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝� − �𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 − Female𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝�
= (11.82+13.69)-(20.55+18.25) – (12.4-21.11) = (25.51 – 38.8) – (-8.71)
= -13.29+8.71 = -4.58
Female employment rate in long run
�𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝− 𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝� − �𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 − Female𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝� = (11.82+13.69+14.13) – (20.55+18.25+17.57) – (12.29+12.52+12.4) – (20.98+20.75+21.11) = (39.61-56.37) – (37.21-62.84) = -16.76 – (-25.63) = 8.87
When we study the magnitude of a change in employment for short run analysis, differentiated by genders, we observe that a huge drop in male formal employment rate after the reform is larger than females’ employment rate. While we figure out a result from long run study, we see that an increase in formal employment rate for female is larger than males’ employment rate.
Male average wage in short run
(𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝- 𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝) - (𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 - 𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝) = (13897+14430) – (6695+6833) – (11624-4768)
= (28327-13528) – 6856 = 14799-6856
=7943
Male average wage in long run
(𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝- 𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝) - (𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 - 𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝) = (13897+14430+14705)-(6695+6833+6972) – (10272+10735+11624) – (3938+4434+4768) = (43032 – 20500) – (32631-13140)
= 22532 – 19491 =3041
Female average wage in short run
(𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝- 𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝) - (𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 - 𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝)
= (13205+13868)-(5761+5804) – (10771-4131)
= (27073 – 11565) – 6640 = 15508-6640
=8,868
Female average wage in long run
(𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝- 𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝) - (𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝 - 𝐹𝐹𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐼𝐼𝐹𝐹,𝑝𝑝𝑝𝑝𝑝𝑝) = (13205+13868+14105)-(5761+5804+5915) - (9608+10278+10771)-(3355+3538+4134) = (41178 – 17480) – (30657 – 11027)
=23698 – 19630 = 4068
For average wage, an increase in females’ average wage after the reform is larger than males’ average wage in both short run and long run.
7.4 Do the low-paid workers tend to be poor? Do the poor tend to be low-wage workers? To analyze the importance of minimum wage policy and its objective to reduce poverty, we examine two relevant questions which are, “Do the low-paid workers tend to be poor?” and “Do the poor tend to be low-wage workers?” (Jan Rutkowski, 2003).
Figure 7: average income between formal workers and poor people
99 61 1052 6 13 57 6 14 24 8 14 42 7 11 22 3 12 11 8 20 06 20 06 20 06 24 92 24 92 24 92 24 92 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 M ON TH LY A VE RA GE W AG E ( BA H T) YEAR
AVERAGE WAGE
formal worker poor people
To analyze whether the low-paid workers tend to be poor, we define the low-paid workers as those who benefited from 300 Baht minimum wage policy. Therefore, we compare average wage of formal workers with average income of poor people. From figure7, we can recognize that monthly average wage of formal workers was almost five times higher than monthly average wage of poor people, so it can implied that low-paid or formal workers do not tend to be poor.7
Figure 8: average income between formal workers, informal workers and poor people.
To answer the second question, “Do the poor tend to be low-wage workers?”, we can consider from figure 8 that poor people actually could not be grouped as both formal and informal workers because their income was much lower than the wage level, received in these formal and informal groups. 8People who are now struggling with poverty in Thailand are those who lack of job or involve in low-skilled part time jobs in agricultural sector such as landless farmers and they are most likely to live in rural areas where education, electricity and health facility cannot be accessed to their households. Additionally, we recognize that these poor people usually live in big families of 7-8 people and only one or two persons are the main sources of families’ income.
7Data available in table 4 and table 5 in appendix
8 Krongkaew, M. (1985). 99 61 1052 6 13 57 6 14 24 8 14 42 7 11 22 3 12 11 8 37 09 40 88 4525 5045 57 61 58 04 59 15 20 06 20 06 20 06 24 92 24 92 24 92 24 92 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 M ON TH LY A VE RA GE W AG E ( BA H T) YEAR
AVERAGE WAGE
formal worker Informal worker poor people
8. Discussion
In the short run, we observe simultaneously an increase in a number of informal workers and a decrease in a number formal employees after the reform which shows us an evidence of labour flow between these two sectors.
The short run decrease in a number of formal workers probably originated from a higher production cost. Employes reduced the number of employees or substitute them with other production factors in order to reduct their cost of production ( sush as hiring immigrants and purchasing machines in order to maintain their firm’s profitability). As a result, formal workers who get lay off have to work in informal secor.
9
Another reason that can explain a decrease in formal employees during 2013 is the decrease of
export side since most of the Thai workers in formal sector have been working in industrialized division that produces output for exporting such as electricity and technology equipment. Thus, this reduction from export sector lowers demand of formal workers.
According to Borjas (2015), an increase in labour supply in informal sector should result in a lower wage. Nevertheless, we find an increase in average wage of workers in both sectors. This can be a consequent factor of Rice Pledging Policy mentioned above in 2013 which affects our results and breaks our third assumption that there was no factor that affected a number of employees in both formal and informal sectors after the reform.
Afterwards, we observe two effects in an opposite direction that may cancel each other out. First, an increase in labour supply should lower the wage of informal workers (Borjas 2015). Second, Rice Pledging Policy escalates income of informal sector. However, the latter one causes a much more massive impact than minimum wage on employment level, led by Borjas (2015), so labour flow cannot affect average wage in informal sector. We possibly overestimate minimum wage on employment level in formal factor. Besides, it is possible that there are not a large number of employees in employment flow from formal to informal sectors or there are many available jobs
9
2013 Annual economic report from Bank of Thailand. .
in informal sector that result in an increase in labour supply, which balances the demand in the labour market.
However, when we analyze minimum wage impact in long run, we have found that the differentiation in the gap between a number of employees in formal and informal sectors was smaller after the minimum wage policy was applied and this resulted in a larger number of formal employees, followed by a fall in a number of informal workers.
We see that employment rate for formal workers increased by around 16.5 percent after the reform which contributed from firms’ cost adjustment in long run that expanded production through rising output’s price. While a decrase in informal employment rate can be explained by failure of Rice Pledging Policy, which unavoidably made most farmers work in formal sector.
Furthermore, the differentiation in the gap between average wage for formal and informal workers is larger after the policy was widely used in all parts of nation because average wage in both sectors rose from time to time. Since average wage for formal workers was around two times greater than average wage for informal workers, this big difference caused the difficulty for informal workers’ average wage to catch up and come close to formal workers’ average wage.
Figure 9: minimum wage bite
25 52% 7,200 Baht 6,351 Baht 48% 6,697 Baht
In addition, we also examine minimum wage bite which explains the proportion of minimum wage to average wage. In figure 9, it shows that money from minimum wage contributes to not only more than half of formal workers’ average wage, but also more than total amount of income that informal workers would receive.
Hence, the policy benefited for those who were covered with 300 Baht minimum wage and worsened for workers who had been laid off by minimum wage on employment level because they got paid from the jobs they had to work for two times lower than an amount of wage they previously earned per month.
Lastly, when we analyze two relevant questions: “Do the low-paid workers tend to be poor?” and “Do the poor tend to be low-wage workers?” (Jan Rutkowski 2003 ), we can see that the low-paid workers or those formal workers who benefited from 300 Baht minimum wage policy did not tend to be poor and poor people were not likely to involve themselves in both formal and informal occupations.
Therefore, after evaluating the two answers, we suggest that minimum wage is not a right economic tool to help poor people since this policy has just assisted workers who are not considered as poor people.
9. Conclusion
To conclude , the main purpose of this bachelor essay was to study whether minimum wage is a good policy tool for reducing poverty by evaluating the changes in the number of employees and average wage in formal and informal sectors.
For short run, an increase in minimum wage is higher for formal workers who did not get lay off by observing from an increase in minimum wage bite. However, an increase in minimum wage causes a negative effect for workers who became unemployed or had been inevitably allocating to work in informal sector because they would receive lower average wage.
While the number of informal employees decreased , an increase in a number of formal employees took place due to a better cost adjustment and allocation from firms’ production factors in long run. Also, these formal workers who benefited from the policy were not poor people because their income was above the poverty line. Therefore, we suggest that 300 Baht minimum wage policy is not an effective tool to reduce poverty
Reference
Borjas, George J. (2015). Labor economics. 7th Edition. Boston, MA: McGraw-Hill. , pp.115-125
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Theories in the Economic Controversies over the Minimum Wage since the Early 20th Century ninco, Sorbonne University of Paris 1.
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Appendix
Table1: Number of employees in 2009-2015 in quater3
(Unit: million)
Table2: Average wage per month in Baht in both formal and informal sector (In all province)
Year 2009 2010 2011 2012
Formal Informal Formal Informal Formal Informal Formal Informal
Male 10272 3938 10735 4434 11624 4768 12447 5242 Female 9608 3355 10278 3538 10771 4134 11731 4749 Total 9961 3709 10526 4088 11223 4525 12118 5045 Employed/year 2009 2010 2011 2012 2013 2014 2015 Total 38.4 38.7 39.3 39.6 39.1 38.4 38.3 Male 20.9 20.9 21.1 21.4 21.3 20.9 20.8 Female 17.5 17.8 18.2 18.2 17.8 17.5 17.6 Formal 14.1 14.6 14.7 14.8 14 16.3 16.9 Male 7.6 7.9 7.9 8 7.5 8.8 9.1 Female 6.5 6.7 6.7 6.8 6.5 7.5 7.8 Informal 24.3 24.1 24.6 24.8 25.1 22.1 21.4 Male 13.2 13 13.2 13.4 13.8 12.1 11.7 Female 11.1 11.1 11.4 11.4 11.3 10 9.7 Year 2013 2014 2015
Formal Informal Formal Informal Formal Informal
Male 13897 6695 14430 6833 14,705 6,972
Female 13205 5761 13836 5804 14,105 5915
Table 3: Minimum wage bite in formal sector ( 𝐴𝐴𝐸𝐸𝐴𝐴𝐸𝐸 𝐵𝐵𝐵𝐵𝐸𝐸𝐸𝐸 =𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑤𝑤𝑤𝑤𝑤𝑤𝑝𝑝 𝑝𝑝𝑝𝑝𝑝𝑝 𝑀𝑀𝑝𝑝𝑀𝑀𝑝𝑝ℎ 𝐴𝐴𝐴𝐴𝑝𝑝𝑝𝑝𝑤𝑤𝑤𝑤𝑝𝑝 𝑤𝑤𝑤𝑤𝑤𝑤𝑝𝑝 𝑝𝑝𝑝𝑝𝑝𝑝 𝑀𝑀𝑝𝑝𝑀𝑀𝑝𝑝ℎ ) 2011 2012 Average wage Minimum wage portion Minimum wage bite Average wage Minimum wage portion Minimum wage bite Male 11,624 4680 0.403 12,447 5736 0.413 Female 10,771 4680 0.435 11,731 5736 0.434 Total 11,223 4680 0.417 12,118 5736 0.423 2013 2014
Average wage Minimum
wage portion
Minimum wage bite
Average wage Minimum wage portion Minimum wage bite Male 13,897 7200 0.518 14,430 7200 0.500 Female 13,205 7200 0.545 13,836 7200 0.520 Total 13,576 7200 0.530 14,248 7200 0.505
Minimum wage portion are caluculated by Minimum wage rate × Number of days that worker can work for each months.
For instace, the portion in 300 baht mnimum wage = 300 × 24 = 7200.
Total 13576 6351 14,248 6,437 14,427 6,583
2015
Average wage Minimum wage portion Minimum wage bite
Male 14,705 7200 0.490
Female 14,105 7200 0.510
Total 14,427 7200 0.499
Since the approximately working days is around 24 days because the restriction of law state that worker can work less than 8 workings hours per day and less than 48 hours per week with a safe environment working condition
Table4: Average wage per month in Baht in Formal sector
Table5: Average income of poor people by region and area using poverty line.
Year 1988 1998 2007 2012 Municipality area 1113 1882 2314 2755 Outside Municipality area 755 1380 1801 2263 Total average 879 1533 2006 2492
Source : Household Socio-Economic Survey National Statistical Office
: https://www.tci-thaijo.org/index.php/EAUHJSocSci/article/viewFile/48375/40186 (The survey is conducted every 2 to 5 years)
Year 2009 2010 2011 2012 2013 2014 2015
Male 10272 10735 13897 14430 14705 11624 12447
Female 9608 10278 13205 13836 14105 10771 11731
Total 9961 10526 13576 14248 14427 11223 12118
