Minimum Wages in Asia - The Automotive Industry in 2015 -

2015/01/08

Summary

  MarkLines Co., Ltd. compiled minimum wage data for eight focal points of the automotive industry in Asia as of January 2015.

  In China, the monthly minimum wage in Shanghai stands at CNY 1,820 (approximately USD 300), while the minimum wage in Guangzhou is CNY 1,550 (approximately USD 250). Both figures are nearly double the wages offered in 2010.

  The Thai government had announced a raise in the daily minimum wage in seven prefectures including the Bangkok Metropolitan Area and Phuket to THB 300 in April 2012, while also uniformly increasing the minimum wage rate in remaining 70 prefectures by 39.5 percent. During the period from 2013 to 2015, the daily minimum wage rate of THB 300 (approximately USD 200 on monthly basis) is applied throughout the country, which is controlling a sharp rise in wages.

  The Government of Malaysia introduced a minimum wage system for the first time in 2013. The monthly minimum wage in the entire Malay Peninsula is set at MYR 900 (approximately USD 260).

  In Indonesia, nationwide labor disputes arise every year due to the large increases in minimum wage. In Karawang, West Java, for example, the monthly minimum wage is IDR 2,987,000 (approximately USD 245), which represents a 4.4 times increase from the minimum wage in 2010. By sector, the monthly minimum wage of the automotive industry is set at even higher at IDR 3,415,000 (approximately USD 280) in Karawang.

  The minimum wage rate in Vietnam varies by region: VND 3.1 million (approximately USD 155) per month in Region I which includes Hanoi and Ho Chi Minh City; VND 2.75 million (approximately USD 140) in Region II which includes Tinh Vinh Phuc and Da Nang. Both figures are relatively low compared to other ASEAN countries. However, the rate at which the minimum wage has increased is high, about 2.3 times the wages provided in 2010 for Region II.

  The minimum wages of the areas in Indonesia and the Philippines covered by this survey are above the national average, because the automotive industry of these two countries is concentrated in the metropolitan area. When looking at real wages, it should be noted that the standards for setting minimum wages differ by country. In Indonesia, the minimum wage is determined based on the "Kebutuhan Hidup Layak (KHL:Eligible Lifestyle Needs in English)" indicator, which considers necessary items for living including clothing, foods and housing. Thus, the real wage of workers in Indonesia seems to be almost equivalent with the minimum wage. In China, a workers' real wage is about twice the minimum wage when allowances not included in the minimum wage are factored in.