Low-income households struggle under rapidly mounting debt

[webfact]

Low-income households struggle under rapidly mounting debt

By THE NATION

 

THAI workers have shouldered ever-higher household debt in the past 10 years as their incomes have not been adequate to meet their expenses, according to a survey.

 

Thai workers’ household debt averaged Bt91,064 per household in 2010 and jumped 6 per cent per year to Bt158,856 per household in 2019, according to a University of Thai Chamber of Commerce survey.

 

Around 95 per cent of workers surveyed had household debts of Bt158,856 per month. Of the total, about 58 per cent were borrowed from the formal sector and the balance from the informal sector, the survey said. Most of the borrowings were meant for daily expenses, vehicles and medical expenses.

 

The university’s Centre for Economic and Business Forecasting conducted the survey on workers who earned less than Bt15,000 per month.

 

Thanavath Phonvichai, director of the centre, said that everything in the economy will be reflected in the labour market. If the labour market sees a gloomy economy, it means measures or the economic situation are not sufficiently efficient.

 

A higher debt burden has led to higher defaults, at 80.3 per cent in the past one year, up from 69.9 per cent in 2010, indicating the country’s economy has not been in good shape, he said.

 

About 29.6 per cent of the workers surveyed see the economy as “very bad”, while 57.7 per cent were concerned.

 

According to the surveyed workers, the first priority of the government should be to control the cost of living or increase the daily minimum wage.

 

Thanavath said the workers understood the difficulties of business operators, so they wanted a solution to the cost of living issue instead of wage rises.

The workers were also afraid of changing their jobs, as 48 per cent found it difficult to get alternative jobs.

 

Meanwhile, Thanavath said uncertainty in the formation of the new government after the election could hurt the Thai economy, particularly in drawing foreign investment.

 

If Thailand does not get a new government soon, its economic growth may slide to 3.5 per cent in the latter half of this year, down from the centre’s estimate of 4 per cent. This could directly affect low-income workers, as they may be able to work fewer hours or there could be layoffs if economic activities decline. This will again increase their debt burden.

 

“It depends on how soon the [new] government will be formed. The economy may grow 3.5 to 3.6 per cent. We believe the formal debt system is mature. They [workers] may go for more informal borrowings,” Thanavath said.

 

He urged the speeding up of government spending to stimulate economic activities and not let the economy worsen during the political vacuum.

 

Measures to depreciate the baht in order to push exports and promote local tourism could help the economy, he said, emphasising that these measures would bring overall benefits, not only for low-income earners.

 

Source: http://www.nationmultimedia.com/detail/Economy/30368575

 

-- © Copyright The Nation 2019-04-30

[sammieuk1]

Left holding a dire Brexit pound I know how they feel right now????

[gunderhill]

Low income household s struggle  under their own stupidity in wanting everything now instead of saving for it, is  more  like it.

[PatOngo]

Was it not just yesterday we read that 2 in 3 workers were happy? I guess they have a morbid sense of happiness. Good luck and stay happy!

[JAG]

59 minutes ago, gunderhill said:

Low income household s struggle  under their own stupidity in wanting everything now instead of saving for it, is  more  like it.

 

1 hour ago, webfact said:

Most of the borrowings were meant for daily expenses, vehicles and medical expenses.

Says a man who probably wants for nothing.

[Gecko123]

2 hours ago, webfact said:

We believe the formal debt system is mature. They [workers] may go for more informal borrowings,” Thanavath said.

My impression is that nowadays very little credit is available through any channel. No one wants to lend anyone any money. Even the most supposedly 'well-to-do' farmers in my area seem to be drowning in debt. I was trying to get hold of a guy down the road to see if he wanted to rent 5 rai of land. He had his phone turned off for days on end, and when I finally stopped by his house, his wife told me the reason was because he was dodging creditors. There used to be a loanshark working our area, but he seems to have been scared off because people were borrrowing money and then going to the police to complain about the interest rates they were paying.

 

I'm working on what I've dubbed the "chainsaw" economic indicator. People are so desperate for cash they are foraging for wood and cutting down trees every chance they get. The sound of chainsaws has filled the air in recent months. The early rains have triggered early planting activity, but drought fears are very real, and there's not much enthusiasm in the air. Just about the only thing planted anymore are  year-round crops like sugar and manioc which can better handle unpredictable rainfall. With rainfall so iffy, even early season corn is a crapshoot; forget about late season planting. More and more kids seem to be fleeing town at ever earlier ages, whereas before they'd mostly hang around until they hit 18. Just the old timers remain eeking out a living for what I often wonder might be their final planting season. Migrant labor brought in from Isaan to do the harvest. There's a total absence of affluence up and down the food chain, all the way up from day laborers to the largest farmers and shops in town.

[Orton Rd]

99% of the people have less than a third of the nations wealth, the largest disparity in the world, what are they doing about it? not a lot.

 

 

 

[mikebell]

2 hours ago, webfact said:

household debts of Bt158,856

How do they get this deep in debt on 15,000 a month?

[Topdoc]

Many governments all around the world are making a fatal mistake which is pushing us into an economic and societal collapse. They continue to incentivise and encourage us to consume capital (spend), which they call “growing GDP” without a care in the world to the build-up of the debt.

 

[Prairieboy]

3 hours ago, webfact said:

household debts of Bt158,856 per month

Wow!  At <15,000 baht salary that is overwhelming.  Fortunately the article is incorrect - the number cited is their average debt not their monthly expenses!

[Prairieboy]

12 minutes ago, mikebell said:

How do they get this deep in debt on 15,000 a month?

Buy a fancy car, two motorcycles - mortgage their house and land not realizing that it has to be paid back at some point.  The banks are happy loan the money with the view to seizing the assets in the near future.

 

[Prairieboy]

2 hours ago, gunderhill said:

Low income household s struggle  under their own stupidity in wanting everything now instead of saving for it, is  more  like it.

Not only new but it has to be bigger, brighter, faster, fancier than their neighbours!  Can't lose face you know!

[PatOngo]

35 minutes ago, mikebell said:

How do they get this deep in debt on 15,000 a month?

Very easily, mut to hab that iPhone, Honda Wave or Toyota pick up. It's a face thing.

[Peterw42]

These articles are often only talking about the official debt, its a whole lot worse when you take unofficial dept to money lenders and pyramid schemes etc.

The more Thais I get to know as friends and neighbours, the more you start to get an idea of the "real" debt.

150k per household sounds like rubbish to me , the pick-up alone would be a debt of 300k, add in the Aeon, Umay cards, the money lenders, the share/pyramid schemes.

[BestB]

The bs of this surveys is when you read workers are afraid of changing jobs when staff turnover in reality is incredibly high. 

 

[Number 6]

Uneducated people prone to impulse and desire and those with the inability to forgo reward always tend to have these problems. I suspect this mirrors western countries well. Nevertheless, this could be handled in a high school course. Managing money is a critical life skill I'd not really paid attention to until I was well into my mind 20s.

 

Thailand is a very impulse, consumer driven society.

 

Money so easily flows from lenders as creditors are on the hook often times forever. Bankruptcy laws here are criminal

 

It just perpetuates neo feudal society.

[StayinThailand2much]

3 hours ago, webfact said:

Most of the borrowings were meant for daily expenses, vehicles and medical expenses.

 

Pick-up trucks and latest iPhones?

[soalbundy]

3 hours ago, gunderhill said:

Low income household s struggle  under their own stupidity in wanting everything now instead of saving for it, is  more  like it.

See Youtube about high court writs in the UK 'can't pay, we'll take it away' and 'The sheriffs are coming'. There are millions in the UK either in poverty or on the knife edge, hundreds of evictions each day, according to one high court agent there is a tsunami of evictions coming, massive borrowing just for living costs, something like 50% of small business making just 100 pounds profit a month, This isn't just Thailand, this is world wide, something has to give.

[Banana7]

1 hour ago, Gecko123 said:

My impression is that nowadays very little credit is available through any channel. No one wants to lend anyone any money. Even the most supposedly 'well-to-do' farmers in my area seem to be drowning in debt. I was trying to get hold of a guy down the road to see if he wanted to rent 5 rai of land. He had his phone turned off for days on end, and when I finally stopped by his house, his wife told me the reason was because he was dodging creditors. There used to be a loanshark working our area, but he seems to have been scared off because people were borrrowing money and then going to the police to complain about the interest rates they were paying.

 

I'm working on what I've dubbed the "chainsaw" economic indicator. People are so desperate for cash they are foraging for wood and cutting down trees every chance they get. The sound of chainsaws has filled the air in recent months. The early rains have triggered early planting activity, but drought fears are very real, and there's not much enthusiasm in the air. Just about the only thing planted anymore are  year-round crops like sugar and manioc which can better handle unpredictable rainfall. With rainfall so iffy, even early season corn is a crapshoot; forget about late season planting. More and more kids seem to be fleeing town at ever earlier ages, whereas before they'd mostly hang around until they hit 18. Just the old timers remain eeking out a living for what I often wonder might be their final planting season. Migrant labor brought in from Isaan to do the harvest. There's a total absence of affluence up and down the food chain, all the way up from day laborers to the largest farmers and shops in town.

What area or province are you in?

[Number 6]

With the majority of the country earning well less than 20k baht a month. How does this square with recent polls:

 

Happiest country

Least miserable country

 

It doesn't. I suppose those that were polled, in Thai style just smiled and gave the thumbs up despite the contrary.

 

Typical recent grads cum office workers are making ?? 12k. That's crap, but they've their entire career ahead of them and childless. Juxtapose this with someone from upcountry, no education, bog standard job, kids, house, car and no upward mobility.

 

Or the poor upcountry girl, 1-2 kids. Off to Pattaya she goes. If her boyfriend who has run away didn't knock her up, she could have scratched out an existence working some menial job. Alas. This is the real and true narrative of the nation.

 

[edwinchester]

All this talk of the latest iPhones and new pickup trucks shows how clueless some people are.

Try living in a Thai village where 300 bht a day is often not the norm, more likely 200 bht a day, take it or leave it so lucky to earn maybe 5k a month.

People ride around on old motorbikes or pool the family income to buy a decade old pickup.

[edwinchester]

1 hour ago, mikebell said:

How do they get this deep in debt on 15,000 a month?

Because most people are not earning 15k a month.

We live in rural Kanchanaburi, village wages are between 4k and 10k a month.

[soalbundy]

Just now, edwinchester said:

All this talk of the latest iPhones and new pickup trucks shows how clueless some people are.

Try living in a Thai village where 300 bht a day is often not the norm, more likely 200 bht a day, take it or leave it so lucky to earn maybe 5k a month.

People ride around on old motorbikes or pool the family income to buy a decade old pickup.

and look at the trouble many have just to scrape the school fees together, with the start of a new term the number of worried looking faces increases exponentially.

[BritManToo]

3 hours ago, gunderhill said:

Low income household s struggle  under their own stupidity in wanting everything now instead of saving for it, is  more  like it.

School fees have to be paid now, you can't save up for them.

My son's government junior school wants 6-10k in the next few weeks, and my daughter's uni fees are around 12k, not a problem for me, but the locals have extreme problems finding that much.

[Number 6]

1 hour ago, Topdoc said:

Many governments all around the world are making a fatal mistake which is pushing us into an economic and societal collapse. They continue to incentivise and encourage us to consume capital (spend), which they call “growing GDP” without a care in the world to the build-up of the debt.

 

They will continue to tax. Build para military armies to keep the populations under relative control. Remove all public and social assistance. Bullet proof vehicles like in South America. Live in gated communities under armed guard.

 

This will all be triggered when world markets tank. Property will follow. The wealthy will scoop up the property furthering the rentier class. Private equity funds will scoop up the equities.

 

Many super rich will just cash out and relocate to safe areas they've already put aside domestically and internationally.

 

Mark my words. When the marks go - it's game over and a return to feudalism here and in the west.

[spidermike007]

There is no doubt, that after 61 months of this administration, life is worse for all but the elite and super wealthy. Prices have gone up significantly, despite the protestations to the contrary by the officials, wages have barely moved, quality (non Chinese tours) tourism is dropping dramatically, discretionary spending is down, confidence is down, and the quality of life under the army continues to diminish for most. Somehow, the Thai people need to figure out a way to get rid of these utter incompetents, before it is too late, and there is not much to save. 

[soalbundy]

Just now, Number 6 said:

They will continue to tax. Build para military armies to keep the populations under relative control. Remove all public and social assistance. Bullet proof vehicles like in South America. Live in gated communities under armed guard.

 

This will all be triggered when world markets tank. Property will follow. The wealthy will scoop up the property furthering the rentier class. Private equity funds will scoop up the equities.

 

Many super rich will just cash out and relocate to safe areas they've already put aside domestically and internationally.

 

Mark my words. When the marks go - it's game over and a return to feudalism here and in the west.

Indeed,even land isn't a safe asset anymore, the land tax can be raised until you can't afford it anymore and have to sell it for a pittance to those that can.

[nong38]

There are plenty of "informal" lenders round here, you get to know them at the market doing their rounds and they are all calling at the same stalls  so little or no checking to see if borrowers can pay, its been going on for years that I see, what I also see is that some of these lenders are getting old and will soon retire which cause further problems for the lenders that are left.

Its part of life here and there is always the option of running away or doing away to "clear" the debt, I doubt if the true scale will ever be known and whether the powers that be want to know.

[totally thaied up]

34 minutes ago, edwinchester said:

Because most people are not earning 15k a month.

We live in rural Kanchanaburi, village wages are between 4k and 10k a month.

Same in our village. 300 baht is generally the daily wage. My MIL makes very little selling cakes every day. Meanwhile this incompetent Government is asking for the people to “spend big” to help them out of a period of lackluster performance. My wife says they, the average person has nothing extra to give each month so it is like trying to get blood from a stone. What a hopeless situation for those on the lower rung. The rich asking the poor to spend to just make them richer.

[Mitkof Island]

Want to act and behave like a foreigner with all its issues ? Be arrogant and go into debt. My house and car is bigger and better than yours. Look at me and how beautiful i am . I am too good for you.