Wage boost risks stalling the auto industry
- Published: 17 Oct 2012 at 00.00
- Newspaper section: News
It has been half a year since the government embarked upon the 40 per cent nationwide minimum wage increase. Another boost is scheduled for January. Many have expressed concern over the risk of companies relocating production bases. Some have argued in the wage rise's favour due to subsequent productivity improvement.
Thailand's automotive industry _ largely concentrated in the provinces where the minimum daily wage was raised to 300 baht _ has been particularly impacted by the wage rise. Who gained, who suffered, and what adjustments have we seen in light of this policy's implementation?
The ongoing labour shortage together with the positive outlook for car production has somewhat strengthened the bargaining power of workers in the auto industry. Consequently, those initially earning the minimum wage have benefitted from the scheme, but unskilled labour constitutes less than a third of total workers employed in the auto industry, mostly in small- and medium-sized labour-intensive auto parts manufacturers.
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