Thai businesses may face wage pressure after state officials’ salary increase

The Thai Chamber of Commerce predicts a potential ripple effect on businesses, following the Cabinet’s decision to approve a 10% salary increase for state officials. The chairman of the chamber, Sanan Angubolkul, anticipates that this move may compel businesses to raise their wages to attract skilled employees.

The salary increase for new state employees will result in a monthly income of 16,500 baht in their first year, increasing to 18,000 baht in the second year. This adjustment, particularly impactful to small and medium-sized enterprises, may present financial challenges for business owners who wish to attract skilled employees.

Sanan Angubolkul noted that employers would need to adjust the salaries of current employees earning less than 18,000 baht per month.

“This will pose a financial burden on employers.”

Private institutions, such as schools and universities, may need to adjust their starting salaries for degree holders, currently set at 15,000 baht per month. While this could affect production costs, Sanan Angubolkul insisted on the need for a detailed assessment for each company and sector.

“The government’s salary adjustment for new civil servants will have a ripple effect prompting the private sector to take immediate action. Businesses will need to adjust salaries to attract talented individuals, and they must find ways to increase productivity and enhance skills in the future.”

Regarding inflation, the chamber chairman believes the impact would be minimal, as the salary increase only applies to new government employees, reported Bangkok Post.

The Federation of Thai Industries (FTI) agrees that the pay rise for state officials will enhance their purchasing power, but it should not affect the daily minimum wage. FTI chairman Kriengkrai Thiennukul emphasised that the minimum wage is determined by the national tripartite wage committee, not the Cabinet.

Kriengkrai also stated that the salary increase for state officials would stimulate the economy and alleviate the financial burden caused by the high cost of living.

Meanwhile, Rangsun Puangprang, executive vice president of local oil retailer PTG Energy Plc, doesn’t foresee a significant effect on oil sales. However, he suggests that the salary increase may lead to increased spending during the high tourism season.