Thai industry urges delay on 400 baht minimum wage increase
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) is set to appeal to Prime Minister Paetongtarn Shinawatra tomorrow, urging a postponement of the upcoming increase in the daily minimum wage to 400 baht, scheduled for January 1 next year. This request arises from the current economic challenges businesses are facing.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce and a prominent member of the JSCCIB, clarified that while the group is not against raising wages, they believe any such decision should first receive the endorsement of the tripartite wage committee. This committee includes representatives from the government, employers, and employees.
“The economy has yet to fully recover from the impact of the pandemic. If the government pushes ahead with its wage hike, businesses will bear the brunt,” Sanan said.
The proposed wage increase is one of the key policies of the Pheu Thai Party, which currently leads the coalition government. An unnamed source from the Labour Ministry revealed the ministry’s intention to implement the 400 baht (US$11) daily wage nationwide from January 1 as a gesture to workers for the New Year.
A new tripartite wage committee is also expected to be formed, with the addition of two new government representatives, according to the source. Although this wage adjustment will be applied across the country, small and medium-sized enterprises (SMEs) will be granted a one-year period to adapt to the changes.
Concerns have been raised by the JSCCIB regarding the economic ramifications of the severe floods experienced this year. They referenced an estimate from the University of the Thai Chamber of Commerce, suggesting that recent flooding in the Deep South might result in damages worth 5 to 10 billion baht (US$146 to US$292 million).
Minimum wage
When combined with flooding impacts in the northern and northeast regions during September, the total damage is estimated between 80 to 85 billion baht (US$2.3 to 2.5 billion), equaling 0.6% of the Gross Domestic Product (GDP). Despite these challenges, the JSCCIB projects a GDP growth of 2.8% this year, with a 4% increase in exports and a 0.5% inflation rate.
Phacharaphot Nantramas, representing the Thai Bankers’ Association, noted the JSCCIB’s intent to engage with the Finance Ministry and Bank of Thailand on December 11. They aim to address chronic debt issues, specifically to aid the automotive and real estate sectors.
High household debt levels have led banks to impose stricter lending criteria for these industries, indicating a need for innovative solutions. Thawee Piyapatana, a Senior Vice-Chairman of the Federation of Thai Industries, highlighted plans to request the establishment of an SME fund valued between 200 to 300 million baht (US$5.8 to US$8.8 billion), reported Bangkok Post.
This fund is intended to support SMEs facing liquidity challenges and would offer low-interest loans with a three-year interest payment exemption.
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