Federation of Thai Industries concerned about plans for minimum wage hike

Thailand’s Federation of Thai Industries has expressed concern about the impact a rise in the minimum wage could have on small and medium-sized businesses. The federation says if a proposal to increase the minimum wage to 492 baht goes ahead, it will have a severe impact on such firms.

According to a Bangkok Post report, the FTI was responding to a letter submitted to the government by the Thai Labour Solidarity Committee and the State Enterprises Workers’ Relations Confederation, ahead of today’s Labour Day holiday.

In the letter, both labour advocacy organisations urged the government to implement the minimum wage increase. However, Kriengkrai Thiennukul from the FTI says the economy has not yet recovered from the Covid-19 fallout and now faces additional pressure as a result of Russia’s war on Ukraine.

“We understand everyone is affected by a higher cost of living and workers want higher pay from their companies to deal with the greater financial burden.”

Despite this acknowledgement, Kriengkrai says now is not the time to introduce the wage hike, as doing so may further slow the economy and hinder its recovery. In particular, the effect on SMEs could be significant, as they struggle to manage higher costs. He says small and medium-sized businesses are already struggling with the impact of the pandemic and if they are forced to increase wages, many may have to close for good.

Instead, he suggests a gradual increase to the minimum wage once the global economy has recovered significantly and once Thai businesses, particularly tourism operators, are in a stronger position.

According to the report, the national wage committee is expected to agree a proposal to increase the minimum wage as early as August, although it’s unlikely to approve the proposed rate of 492 baht a day.

The last increase, which took the daily minimum wage from 313 baht to 336 baht, was in January 2020, just months before the pandemic struck.

SOURCE: Bangkok Post