Japanese manufacturers in Thailand to raise wages by 4.3% in 2019: survey

03, Sep. 2019

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BANGKOK, NNA - Japanese manufacturing subsidiaries in Thailand are raising wages for their workers by 4.3 percent this year, down 0.2 percentage point from 2018, registering the second straight drop in the annual wage increase rate, according to the Japanese Chamber of Commerce (JCC) in Bangkok.

The increase rate of wages paid by Japanese nonmanufacturers in the Southeast Asian country is leveling off from last year, the JCC said in an annual survey on wages and labor conditions released on Friday.

In the manufacturing sector, the increase rate for the “electric/electronics machinery” segment edged down 0.2 points to 4.0 percent and those for “steel/non-ferrous metal” and “automobiles and parts” declined 0.1 points each to 4.3 and 4.9 percent, respectively, the survey showed. The rate for “chemical” leveled off at 4.6 percent.

In the nonmanufacturing sector, wages in the “trading” segment are growing 5.0 percent this year, up 0.1 points from 2018, while those in “finance, insurance, securities” and “freight forward and transportation” are leveling off, the survey found.

The survey is based on data collected from 649 JCC member companies, including 328 manufacturers and 321 nonmanufacturers, in response to a questionnaire sent out in April. In the 2018 survey, 568 member companies responded. There are about 1,770 JCC member companies.

The ratio of surveyed manufacturing companies that vowed to “raise the wage increase rate” from the previous year was 20.4 percent, down from last year’s 30.0 percent. On the other hand, there was little change from last year in the ratio of nonmanufacturing companies that will raise, maintain, or lower the wage increase rate.

Annual bonuses paid in 2018 by manufacturing companies were equivalent to regular wages for 3.6 months, up 0.1 months from 2017, while those by nonmanufacturers were 2.5 months, the same as in 2017.

Of manufacturers, 41.2 percent say they are increasing bonuses while 40.8 percent say they are maintaining the level of bonuses. Both of these ratios have increased over last year. The ratio of nonmanufacturers that are maintaining the level of bonuses rose to 56.3 percent.

The 2019 survey newly looked into allowances and systems regarding childbirth and childcare. Childbirth cash gifts were paid by 42.9 percent of manufacturing companies and 38.1 percent of nonmanufacturers. Special leave for pregnant employees was provided by 27.9 percent of manufacturers and 35.6 percent of nonmanufacturers.

“In addition to wages and welfare benefits, Thai people are placing importance, going forward, on issues as to whether employers are providing a favorable environment for child-raising and are mindful of the health of employees” said Kazuma Takago, first secretary at the Japanese Embassy in Bangkok, stated as he briefed on the survey result.

By age group, the ratio of workers to Japan’s female population declined from the second half of their 20’s to their 30’s showing an “M-curve” due to marriage, childbirth and childcare, according to statistics published by the Japan Institute for Labor Policy and Training.

In Thailand, many women continue to work after getting married or having a child, according to the National Statistical Office of Thailand. The ratio of women in managerial posts is 32.4 percent in Thailand, far exceeding that of 12.9 percent in Japan.