Notes

I think that Thailand's main macroeconomic objective should be fair -- or at least improved -- income distribution. Thailand has some of the worst rates of income inequality in the world, with half of all the national income going to the top 10%, worst than in most countries (Jenmana and Gethin). The issue of income inequality in Thailand remains unaddressed by fiscal policies that are already in place, although things have somewhat improved since the 2000s.

So, why is income inequality such a big problem? Studies show that the top 10% have received 53% of the national income, earning approximately 100,000 baht per month, and the top 1% have received 20% (over 380,000 baht per month). The population's bottom 50% has received only 13% of the national income, on average earning about 150 baht per month. Evidently, the poorer folk have to work months to earn as much as the top percentages earn monthly. It is truly terrible when the top 10%'s earnings constitute more than half of the national income. Thailand's awful income inequality rates compare to Brazil's despite the fact that Thailand has a much smaller population of 60 million compared to Brazil's 212 million. Credit Suisse's global wealth report also makes clear that Thailand has some of the highest concentrations of wealth in the world. Citizens in cities earn much more than citizens in rural areas, as can be grasped by the fact that, in 2011, the average income in rural areas ranged from 17 to 18,000 baht, while the national income in Bangkok was around 41,000 baht. The COVID-19 pandemic has also negatively impacted income inequality everywhere, including in Thailand.

What policies could potentially achieve fair income distribution? Well, firstly, the government could increase the minimum wage (increasing workers' income). The gap between classes shortens if low-income employees receive better wages from their employers. We can see that this has already worked in China; by increasing the minimum wage by 26%, income inequality went from 10 to 12%. Chinese lawmakers passed a minimum wage law forcing the local government to readjust the minimum wage every 2 years. However, the government has to be truly interested in enforcing this policy and has to make sure that they don't become lax in enforcing it. While Thailand has a history of passing minimum wage laws, it doesn't seem like just this alone is enough to fix the complex problem of income inequality. However, I think it is a necessary component.

Thailand could also invest more in public infrastructures, such as railways, water supplies, and hospitals, such facilities that low-income workers often rely on. An improvement in these facilities would mean a better life and more opportunities for many workers. Investing in public infrastructures also stimulates the economy and reduces economic inequality. We can see that this has already done some good in India. Indian states with better public infrastructure tend to have better rates of income inequality. However, while this is provably a good short-term solution, experts are unable to agree on whether this is a good long-term solution. There are many unsteady factors that determine whether this solution will work in the long-term, such as taxation (capital, labor, and consumption).

Another way Thailand could work to reduce income inequality is by providing better education for the poor. Education helps citizens become self-reliant. The correlation between better education and higher income is clear; we can see this very cut-and-dry situation in China. Richer families invest more in their children's education; the richer children go on to earn more than the poorer children. If the government supports better education for the poor, their lot will gradually improve in the following generations, and they may even pull themselves out of poverty. Most high-paying jobs will require diplomas of some sort. In conclusion, the education system should see some reforms to accommodate the poor. Educational aid policies would go a long way in helping the low-income population, especially the people who live in rural and thus poorer parts of the country.

Citations:
1. Jenmana, Thanasak, and Amory Gethin. “Extreme Inequality, Democratisation and Class Struggles in Thailand.” World Inequality Lab, Mar. 2019.
2. Howell, Anthony. “Minimum Wage Impacts on Han-Minority Workers’ Wage Distribution and Inequality in Urban China.” Journal of Urban Economics, July 2019.
3. Leckcivilize, Attakrit. “Does the Minimum Wage Reduce Wage Inequality? Evidence from Thailand.” Journal of Labor & Development, Apr. 2015.
4. Misra, Biswa Swarup. “IMPACT OF ECONOMIC AND SOCIAL INFRASTRUCTURE ON INCOME INEQUALITY - EVIDENCE FROM INDIAN STATES.” Australasian Journal of Regional Studies, 2019.
5. Yang, Juan, and Muyuan Qiu. “The Impact of Education on Income Inequality and Intergenerational Mobility.” China Economic Review, Dec. 2015.