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Phuket's Rising Prices Pile Concern on Labor, Costs

Phuket's Rising Prices Pile Concern on Labor, Costs

Tuesday, July 3, 2012
PHUKET: Prices on Phuket are now so high that the 300 baht minimum wage has no meaning, a meeting about wages and rising costs heard yesterday.

Vijit Dasantad, President of the Phuket Federation of Hotels and Service Labor, told the gathering at Provincial Hall in Phuket City that costs for basic living on Phuket were out of control.

''The measures have failed and Phuket's problems with rapid price rises continue as before,'' he said. The cost of living on Phuket is the fastest rising in Thailand.

Phuket prices rose 6.2 percent in the first six months of the year, the Ministry of Commerce announced today, with food and drink up 8.9 percent.

Questions are also being asked about the future of Phuket's labor supply. People are unwilling to migrate to Phuket because costs are outpacing wages.

Employers were likely to hire Burmese for some roles instead of Thais because Burmese were likely to work for less, employer representative Saroat Aungkanpilat told yesterday's meeting.

And there was still a need for Phuket workers to meet higher standards with the approach of the Asean economic community from 2015, he said.

Included in today's release of shocking new figures for prices on Phuket were: vegetables and fruit, up 14.5 percent; meat and seafood up 11.8 percent; rice and corn products up 9.2 percent; cooking oil and flavoring up 10.2 percent; cleaning equipment up 12.9 percent.

A survey of 157 businesses in Bangkok, the Bangkok periphery and Phuket - the provinces where the 300 baht minimum wage had been pioneered from April - showed 71.26 percent of firms had higher production costs while 48.50 had lower income under the minimum wage, yesterday's meeting heard.

Vice Governor Dr Sommai Preechasin said that at present there were 1649 jobs available with 2174 people registered as looking for work.

The national government has been trying to place a ceiling on the prices of basic items but it's acknowledged that Phuket - and especially Patong and Phuket's tourist west coast - is proving impossible to control.

Bhummindr Harinsult, vice-chairman of the Thai Chamber of Commerce, was recently reported as saying that a survey showed 82.4 percent of operators in the pioneer minimum wage provinces insisted their business had lower competitiveness due to higher labor costs but static productivity.

The deadline for the verification process, designed to register all workers from Burma, Cambodia and Laos, has been extended to December 14.

However, Burmese are likely to be less attracted to Phuket as Burma speeds its own development in the leadup to the launch of the Asean economic community in 2015.

Comments

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Rapid price rise of cost of living in Phuket is powered by the lack of controls by Thai administration on businesses by negligence, corruption or lack of knowledge such as:
- Any Thai with an ID is able to set up a Thai company or business without University Diploma or knowledge. By example with few hundred Baht, a Thai may have a TAT license and open tour counter selling tours, hotel rooms, air-tickets, and so on...
- Foreigners are able to buy lands through Thai nominees. When a foreigner buy 1 Rai of land at 8M Baht, automatically all lands around will be evaluated at that price. Therefore local people are unable to buy land to build their home even if they have a Bachelor Degree with a good salary as the cost of the loan is more than higher than their monthly salary.
- Many civil servants in Phuket in order to increase their incomes join together to set up businesses and use their positions in Thai administration to protect their businesses and spend more time to take care of their businesses than working hard to improve Phuket.

Posted by Whistle-Blower on July 3, 2012 11:34

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WB:

Farang buys 1 rai for 8 MILLION...

What moron is buying a standard plot of land for 8 million...

If they are then I will need to get out and buy some more land.

Lesson learned here, if you are Thai, forget the Bachelors degree, buy more land - quickly.

Posted by Jim on July 3, 2012 12:19

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Posted by Jim - Lesson learned here, if you are Thai, forget the Bachelors degree, buy more land - quickly.
Where poor Thais with or without a Bachelor Degree will find millions of Baht to buy land as they are pennyless?

Posted by Whistle-Blower on July 3, 2012 12:59

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The article is mainly about food inflation, so why WB insist on harping about land prices is beyond me. The price of land in tourist areas in not of concern for the average thai worker. As for somebody paying 8 million or a rai of land, well that's just market forces. What is this craziness about land ownership being the end all anyway? I feel pretty secure and safe and I have NEVER owned any land in my life at all, it's a typical developing country mentality to feel you MUST own land to feel you are a complete human being. Sure, it can be a good investment, but that goes for many things.

Posted by christian on July 3, 2012 13:14

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Forget the Burmese for cheap labor soon. Burma is opening up & expanding rapidly. Why would they want to come to be abused as near slave labor in Phuket when they will be able to stay home with their families & work for same, or possibly, better money. It will be interesting to see where the next unfortunates are recruited from.

Posted by Logic on July 3, 2012 13:15

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Thats why people will head for the Philippines in the near coming years. Then greed will bite Phiuket back!

Posted by Fred on July 3, 2012 13:38

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It's the problem with increasing the minimum wage so quickly. You always have a problem with businesses increasing the cost of goods because they have increased costs but also because people have increased buying power. In the end the increase in prices would always be more than the increase in wages.

I've also read stories of some perks that were extra being included in the wage increase (so it's a wage decrease).

The issue with the number of tour operators (and other businesses), price of land and civil servants using their position for gain is a completely different story.

Posted by Ty on July 3, 2012 16:19


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