Thai labour minister takes wages for a spin: Cabinet gears up for minimum wage review

Thai Labour Minister Phiphat Ratchakitprakarn announced that the Cabinet will be looking into a review of the new daily minimum wage rates. This comes after several business organisations urged the government to uphold the decision made by a tripartite wage committee regarding the increase in wages.

Phiphat disclosed that he has no authority to review the rates approved by the committee, therefore he will appeal to the cabinet for a revision.

“As the labour minister, I oversee the tripartite committee, but I cannot interfere with its decision. The only way is to submit the matter to the Cabinet, so it will order the review.”

However, if the committee stands firm on its decision, the government would have no choice but to accept it.

“The new rates were unanimously agreed upon by representatives of the employees, employers and the state in the committee.”

The committee gave the go-ahead for the new rates last Friday.

Economic disruption

According to Phiphat, a review is normally based on the rate of economic growth, inflation, and the cost of living over the previous five years. He highlighted that the economic disruption of the Covid-19 years – 2020 and 2021 – should not be used to calculate the new wage rates.

Prime Minister Srettha Thavisin expressed his discontent with the committee’s decision to raise the daily minimum wage rate by between 2 and 16 baht across the country, stating that he will seek a revision.

“Should we really have to leave the minimum wages for Thai workers this ridiculously low, while Singapore, for one, offers a minimum wage of 1,000 baht a day?”

On the other hand, Hassadin Suwatthanapongchet, secretary-general of the Federation of Thai Industries’ Northeastern Chapter, argued that the 61 year old Thai PM should respect the committee’s decision on the new wage rates to ensure fairness to both employees and employers.

A sharp increase in the daily minimum wage could hurt the economy, which is still making a slow recovery, he warned.

Veerasu Kaewboonpun, an employee’s representative on the committee, stated that the new wage rates were a compromise acceptable to all sides on the committee as employers can also afford to pay them while the new rates also offer employees enough money to live on.

The daily minimum wage for Thai workers nationwide is set to rise from January 1, 2024, with the new rates varying from province to province, ranging from 330 to 370 baht, according to the committee. The current rates are between 328 and 354 baht. The increases in the daily minimum wage will range from 2 to 16 baht, or an average of 2.4%.

However, the new daily wage falls short of the 400 baht per day minimum wage that the Pheu Thai Party promised during its election campaign earlier this year. Pheu Thai’s plan for a big wage hike rattled businesses that feared it would push up operating costs and make the country less competitive for investors when the economy is underperforming.