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Laos-Minimum Wage Increases


The Lao government approved a 20% increase in minimum wage for Lao labor.However, even with this increase, the minimum wage is still 50% lower than what they actually need in order to cover their cost of living.Thus, our VOA stringer predicts that the number of illegal laborers sneaking to Thailand to look for jobs will continue to increase.

According to the Committee of Secretary for the Prime Minister Office, under the chairmanship of Prime Minister Buasone Bouphavanh, the Lao government officially granted an approval for the increase of minimum wage of Lao labor from the existing rate of 290,000 Kip to 348,000 Kip per month This newly approved minimum wage has been in effect since February 18, 2009.This committee also assigned Ministry of Labor and Social Welfare to be in charge of the enforcement of this newly approved minimum wage. However, until now, the specific timeline for this ministry to actually put this newly approved labor decree to be in force is still not yet specified.This is because this government agency still wants to give some time to employers who need to prepare for implementation of this government decree as as they are trying to mitigate the impact of the current global financial crisis.

This new increase of minimum wage, in principal, is 20% higher than the existing rate; however, the Lao Trade Union previously suggested that the government increase Lao minimum wage from 290,000 Kip to at least 700,000 Kip per month since the cost of living in Laos has been steadily increased since 1997. Consequently, nowadays, the only possible way that Lao workers to be able to survive is to work overtime for many hours each day.Under the current situation, the opportunityfor these workers to work over-time is very limited.It is apparent that only few companies, such as lumber processing and mills, have jobs available for which overtime is available to their workers. As a result, Lao laborer increasingly sneak and seek opportunities to work illegally in Thailand, in which they receive wage at a rate that is four times higher than Lao minimum wage. Even though their wages may be lower than that received by Thai workers, working in Thailand provides a better employment opportunity for these laborers unable to earn enough in Laos to support themselves.

Despite this, the majority of Lao workers seeking jobs in Thailand does not prefer to apply via the nine workforce management companies, which received licenses from the government. Applying through these companies, workers have to pay the premium of 20,000 Baht as well as go through sophisticated procedure of application. Thus, they commonly prefer to arrange their travel and seek jobs through Lao-Thai border labor recruitment brokers.As stated by Mr. Khampan Inthavong, Director of Lao Labor Promotion who expressed his concern regarding the current Lao labor status as follows:

Lao current labor status is not so promising because workers who live by the Mekong from Sayabouly to Champasack and Saravanh, all sneak across the border to seek work illegally inThailand. These workers are seasonal laborers, who usually come back to cultivate their rice during raining season and go to seek jobs in Thailand after the completion of their crop harvesting. Currently, it is believed that there are over 400,000 illegal Lao workers in Thailand and this number is increasingly every year.

Songrit Pongern reported from Bangko on 02/03/20/09

(English translation by Buasawan Simmala and Dara Baccam)

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