Lao Economy

Lao Minimum Wage To Rise 44% In April

Laos will raise the minimum wage for unskilled labourers by almost 50% in a move reflecting the government’s concern about a worker shortage.

The monthly wage will rise to 900,000 kip (about 3,630 baht) in April, a 43.8% increase from the current 626,000 kip (about 2,250 baht).

”The wage adjustment will take effect on April 1, 2015,” the official Lao News Agency quoted Phongsaysack Inthalath, director-general of the Labour Management Department, as saying Wednesday.

Workers in health-threatened jobs or the dangerous working environments will be paid 15% more, the official added.

The new rate is to help workers cope with an increasing cost-of-living and entice Lao workers to remain in the country, instead of leaving for higher-paid jobs in “neighbouring countries”, Mr Phongsaysack added.

Thailand is a favourite destination for Lao people to find jobs, especially since the Pheu Thai Party-led government of former prime minister Yingluck Shinawatra increased the minimum wage for workers across the board to 300 baht a day (about 74,400 kip) in Nov 2012.

Over a month, the Thai minimum salary worked out to 209% more than the current Lao minimum wage and still 114% more than the rate that begins in April.

The country of 6.7 million has a workforce of 3.7 million, most of whom work in the agricultural sector. The workforce is defined as people aged between 16 and 65 years old, according to UN and other agencies.

Many Thai industries, including textile factories, have relocated to Laos due to lower wages there. Direct investment from Thailand from 1989 to 2012 accounted for US$4.08 billion in Laos, according to the Lao Planning and Investment Ministry.

Laos requires workers to work eight hours a day and 26 days a month with a day off every week.

Source: Bangkok Post