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NEWS UPDATES Asean Affairs           16   July  2011

Proposed pay scale for Thai grads is problematic

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One of the the winning Pheu Thai Party's election promises is to raise the starting salary of new university graduates to 15,000 (US$ 5,000) baht per month.

This raise is likely to narrow the salary gap in the civil service between bachelor's and doctorate holders, stimulating the brain drain from the public sector.

A senior official at the Finance Ministry also voiced concern over the new government's policies to cut the corporate income tax rate to 23 percent next year from 30 percent currently in a bid to increase competitiveness and help businesses offset higher wage costs, as well as the proposed minimum wage of 300 baht per day.

The starting salary for civil servants is now 8,700 baht a month, plus a 3,000- baht cost of living allowance initiated by the Thaksin Shinawatra government.

The official, who declined to be named, said paying new civil servants by increasing the allowance was a good idea because it would not affect the fiscal budget and future state expenditure, while related laws need not be amended.

"But if the government chooses to raise the starting salary, the upper levels would also need to be increased to maintain the salary structure, requiring a huge budget."

Even if the government chooses to pay more by increasing the allowance, the gap between a doctorate holder and a bachelor's degree holder would be a mere 1,000 baht baht, which could prompt people with higher degrees to seek jobs in the private sector instead.

There are 1.79 million civil servants, 229,000 of whom earn less than 15,000 baht a month. If the policy is implemented, the fiscal budget for the civil service would need to be increased by 15.2 billion baht (US$504 million). For fiscal 2011, the civil service salary budget was 614 billion baht or 30 percent of total state expenditure.

Another concern is that once new civil servants are paid more, state enterprise employees will seek raises because their starting salary is 13,000 baht.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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