Wage inequality – that is, the ratio earned by the top 10% compared to the bottom 10% – has increased in Thailand enormously between 1995-7 and 2004-6. In fact, according to the Global Wage Report 2008-9, only Argentina saw a bigger increase among countries providing data. The report writers argue that it is those countries which experienced the worst economic crises which have experienced the largest increases and, in the case of Thailand especially, the increase results in a widening of the gap between the middle earners and the lower earners. In other words, it is the people at the bottom who are falling even further behind.
The current economic crisis is likely to make the situation even worse. Job losses are already mounting – there are 50,000 new unemployed across the country and the figure is expected to rise by up to a million, caused both by the financial crisis and the PAD disaster. The full number of unemployed is never entirely accurately known owing to limitations in technical capacity in the Ministry of Labour and because large numbers of people return to rural locations and share under-employment in agriculture. The informal sector is also very large and only partly documented.
It is not clear what the incoming Democrat-led coalition is planning to do to alleviate the suffering faced by the unemployed. There will be no increase in the minimum wage for January 1st, when it has been customary for such an increase to become effective. It is to be feared that the failed right wing ideology that has become endemic in the Democrats will lead to no increases in the minimum wage at all, on the pretext that this will make businesses more competitive – in reality, of course, this type of low wage cost manufacturing competitiveness has already disappeared from most industries in Thailand and the need is to upgrade infrastructure and, most urgently, the quality of the education system. The proper answer to the ongoing crisis is to follow Barack Obama’s example and launch a range of large projects to improve both economy and society. That is unlikely to happen in the new atmosphere of money politics.