Firms push for gradual daily wage increases

Firms push for gradual daily wage increases

Tripartite committee resolution preferred

Workers at the construction site for Bang Sue railway station. Business operators are worried about the impact of a sharp wage hike. (Photo by Patipat Janthong)
Workers at the construction site for Bang Sue railway station. Business operators are worried about the impact of a sharp wage hike. (Photo by Patipat Janthong)

Business operators are urging the new government to raise the country's daily minimum wage in line with a resolution of the tripartite committee and avoid the sharp rise promised during the general election campaign.

For 2019, the tripartite committee representing employers, employees and the government agreed to increase the daily minimum wage by 2-10 baht from 308-330 baht, depending on province and location.

The new top rate will be 335 baht a day, up from an average rate of 325 baht.

The committee resolution has yet to be approved because the Labour Minister and the ministry's permanent secretary resigned to become senators.

Tanit Sorat, vice-chairman of the National Labour Development Advisory Council under the Labour Ministry, said the new government is expected to raise the 2019 daily minimum wage in order to match what was promised before the general election.

When campaigning in the election, the Palang Pracharath Party promised that wages would reach 425 baht a day.

Mr Tanit said the tripartite committee agreed a rise of 2-10 baht, the approval for which has been delayed since May 10.

"We expect the committee to propose the new rate for the new minister again once the party can form a new cabinet," he said.

Mr Tanit, also vice-chairman of the Employers' Confederation of Thai Trade and Industry, said business operators are calling for the new government to follow the committee's resolution because it was considered based on actual protocol and the economic situation.

"The committee gathered data and found that the provincial tripartite committee proposed the wage hike for 31 provinces while the remaining 46 provinces agreed to maintain the rates," he said. "This is not the appropriate time for a sharp hike to 425 baht per day, because all local companies will suffer from the sudden rise."

Mr Tanit said companies would lay off employees to solve the problem. Meanwhile, the economy would be pressured by the higher cost of living.

"The overall economic sentiment is not healthy enough for the business sector, which faces myriad risks: export contraction, trade war and an unstable global economy," he said.

Chonrungsee Chalermchaikit, president of the Federation of Thai SMEs, said the new government should not increase the daily wage for at least one year, since small and medium-sized enterprises (SMEs) cannot afford higher labour costs amid the economic gloom.

"Once the new government follows through on its promise for 425 baht, there should be a clear-cut plan for all stakeholders and incremental increases," she said.

Apart from the daily wage hike, the government should have a plan to improve workers' skills to meet all employers' needs, Ms Chonrungsee said.

"A clear-cut plan means improvements for the labour market in the long run," she said.

The federation is concerned about the 425-baht wage because 100,000 SMEs would face bankruptcy and be put out of business.

Thailand has 3 million SMEs, Ms Chonrungsee said.

According to the National Economic and Social Development Council survey on employment in the first quarter, there were 2.5 million employees earning less than 308-330 baht a day.

Most were in the agriculture, beverage, retail, wholesale and construction sectors.

Total employees in the private sector amounted to 15.82 million or 15.8% of the total 37.7 million employed in the first quarter of 2019.

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