- Published: 06/09/2012 at 12:00 AM
It said studies have shown there has been no adverse impact on economic growth from wages increases so far.
Somkiart Chayasriwong, permanent secretary for labour and chairman of the tripartite Central Wage Committee, yesterday said the wage panel decided to uphold its resolution on Nov 2 last year to raise the daily minimum wage to 300 baht across the country.
The 300-baht wage hike was earlier implemented from April 1 this year in seven provinces _ Bangkok, Nonthaburi, Samut Prakan, Samut Sakhon, Nakhon Pathom, Pathum Thani and Phuket.
Mr Somkiart said the minimum wage would go up to 300 baht across the country from January but there would be no further increases in 2014 and 2015.
He said the panel has closely monitored the economic situation following the increase in April, and found that the economy kept expanding and that the inflation and unemployment rates remained under control.
The panel plans to forward the countrywide wage hike for cabinet approval soon as it wants the new rate to be put in place in January after it is published in the Royal Gazette.
The 300-baht daily minimum wage policy was a major part of the ruling Pheu Thai Party's campaign platform during last year's elections.
Mr Somkiart said second-quarter gross domestic product grew by 4.2%, higher than that in the first quarter, as a result of increased purchasing power.
In the past few months, inflation has been recorded at 2.92%, lower than the estimated 3.3-3.5%, he said.
The unemployment rate between January and June was 0.8%, which was not high, the wage panel chairman said.
He added that about 80% of small-and medium-sized enterprises (SMEs) had been affected by the wage boost.
However, 99% of them were able to adjust to the situation, he said, citing a survey jointly conducted by the Labour Ministry, the Thai Chamber of Commerce and the Federation of Thai Industries.
A study has also shown that the wage increase has helped boost labour efficiency by 8.7% over the past seven months, he said.
The government has put in place measures to cushion the impact of the wage increase on business operators.
These include a temporary reduction in employers' monthly contributions to the Social Security Fund and the offer of low-interest loans to SMEs.
Attayuth Leeyavanich, secretary-general to the Consumer Products and Services Employers Council, criticised the committee's decision to raise the minimum wage throughout the country, saying it would have a greater impact on the economy than the April hike.
The panel should have put the issue on its agenda to allow all sides to debate it, he said.
He rejected Mr Somkiart's claims about economic growth, saying there was only economic uncertainty.
Wilaiwan sae Tia, vice-chair of the Thai Labour Solidarity Committee, agreed with a nationwide wage increase, but strongly opposed the panel's decision not to lift it again until after 2015.
Most workers would suffer in that time period as inflation and consumer goods prices would keep rising, she said.
Rojjanin Phatchararuangkij, managing director of Smile Heart Foods in Samut Sakhon, said the wage rise in January will have only a limited impact on his firm, which produces frozen seafood mainly for export.
The company has brought in machinery and has trained workers to be more productive, the managing director said, adding that the hike will motivate the workers to work harder.
Federation of Thai Industries secretary-general Sommat Khunset said the National Wage Committee should postpone the launch of nationwide wage boost until at least 2014.
Mr Sommat said the best time to implement a nationwide hike is between 2014-2016 to allow SMEs time to adjust.
Many SMEs are still reeling from the effect of the earlier increase, which has also pushed up inflation, he said. These problems have not been effectively tackled so far, and the January rise would only compound their troubles.
Share your thoughts
- Discussion 1 : 06/09/2012 at 07:51 PM
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Well true enough why D1 says, prices have gone up everywhere. In the last two years many restaurants have increased prices by 25-30%! Markets too are asking 5 baht more for little meals in plastic bags. From 25 to 30 baht is a steep rise for many people.
But the problem is not the wages it is the way the economic system has been structured with the rich getting richer and the poor struggling. Independent organizations calculate a Thai worker must earn 15,000 Baht/month for minimum wage equivalents. 300 Baht/day is still far too low.
When the richest man in Thailand has so much wealth it would take an average worker millions of years to save (literally) something is wrong. If companies had been structured to begin with in more acceptable ways to workers thing cold be different. But capitalism if a lie, as is the equating of "free market economy" with "freedom". On top of that, Thailand still has one foot firmly planted in its feudal past.
And currently with 46,000,000 people living in poverty inside the USA, Thailand should seriously consider ending its adapting this model in future.
- Discussion 2 : 06/09/2012 at 07:01 PM
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Artificially raising wages is a risky business but Thailand can not and should not expect future success based on a low wage+low skill economy. Increasing productivity and skills are essential for long term success.
- Discussion 3 : 06/09/2012 at 04:30 PM
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"The Central Wage Committee will implement the 300-baht minimum daily wage across the country from January."
Let's get ready for hyper-inflation folks. Needless to mention, self-employed and unemployed people are going to suffer the most because of this wage increment decision.
- Discussion 4 : 06/09/2012 at 02:50 PM
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Mitrapaap dis#3, it's really a simple reason why minimum wage must be uniform nation wide. Amy wage disparity will cause a migration of people to places that pay more and will end up with a loopsided dwindling of suitable resources in some provinces, undermining that province development. No difference from competing corporations where higher wages attracts better workers. Workers are highly mobile.
- Discussion 5 : 06/09/2012 at 01:56 PM
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National minimum wage of just 300 Baht a day! I hope employers aren't complaining it’s too much! No surprise people strive to earn lots more than just the minimum and any decent employer would be looking to offer starting salaries above the minimum, not least, to attracted good workers.
- Discussion 6 : 06/09/2012 at 12:12 PM
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pcv In actuual fact our workers do go to supermarkets, unless they are just buying Big C etc bags they also spend their Sundays there to take advantage of the aircon that they don't have at home.
- Discussion 7 : 06/09/2012 at 12:00 PM
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Once their political masters have decided, these civil servants will have to oblige; all those studies / statistics on inflation, unemployment rate and all those rationales presented are irrelevant, just smoke screen. Increasing the minimum wages to any amount is not the only issue, as improving the overall productivity of the labor force is the real source of the matter; it requires the real efforts by the employees as well as employers, and government sponsored incentives. Increasing wages level without corresponding increase in productivity will have dire repercussion on the economy in general.
- Discussion 8 : 06/09/2012 at 09:51 AM
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D1: I'm not economist or otherwise an expert, but I guess when prices go up and people pay more for the same, then the GDP numbers go up and that will be interpreted into economic growth. Actually people didn't buy more, they only paid more.
What I still don't understand is a unified 300 Baht nationwide. Since when is the living cost the same allover Thailand? Does a room rent in some small upcountry city cost the same as in Phuket or Bangkok?
- Discussion 9 : 06/09/2012 at 09:24 AM
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nosurprise, do you think any of your workers have ever step in a supermarket with less than 300 Baht a day? No way!
However, I agree that probably all prices will increase together with this measure. Seems quite obvious that it will.
Still it's curious how rich people in Thailand is so against this measure, maybe they should try to make a living with less than 300 Baht a day for a few months themselves.
- Discussion 10 : 06/09/2012 at 08:50 AM
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We run a small factory (40 employees). When the wages went up our suppliers (approximately a dozen other small businesses in the area) all put up their prices and so we had to as well or go out of business. Employees already getting 300 baht per day had to have their wages increased as well, otherwise there is no point in them being better qualified than the others. When I go to the supermarkets to do the weekly shopping prices have gone up. So how can the Central Wage Committee say that "studies have shown there has been no adverse impact on economic growth from wages increases so far". Is it the heat again?
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