A group of business leaders has reiterated their opposition to any plans by the government to raise the daily minimum wage to 400 baht nationwide, warning a nationwide flat rate will deliver a heavy blow to the Thai economy in the long run and weaken the country's competitiveness.
Poj Aramwattananont, vice-chairman of the Thai Board of Trade, said a flat wage hike nationwide will raise operating costs of domestic businesses, especially small and medium-sized enterprises, increasing the prices of goods and people's cost of living.
"While the economy remains fragile because of a strong baht and the ongoing trade war, the government's wage policy should be made on a gradual basis, with a rise of about 25-30% from the present level of 325 baht in major provinces," he said.
The Palang Pracharath Party, which leads the coalition, made a 400-baht minimum wage a key plank in its election platform, but was vague about the timing. Since the vote, it has indicated that the increase could be phased in over the four-year term of the government.
Mr Poj said the country's competitiveness would weaken as wages in Thailand are already considered relatively high among Asean countries. Such a wage hike would affect both domestic and foreign investor confidence, he said.
"The government should let the tripartite wage committees at provincial and national levels decide on the wage rise," said Mr Poj. "Wages should be based on workers' skills and the conditions in each province."
He said the private sector agrees with upskilling and reskilling workers in line with any wage hike.
"The government needs to answer why the wage rise will be flat at 400 baht per day nationwide with appropriate reasons under the 10 key indicators that gauge a wage hike, such as exports, investment, inflation, exchange rate and oil price," said Mr Poj.
Thanavath Phonvichai, vice-president of research at the University of the Thai Chamber of Commerce, said the private sector is concerned that a sharp and sudden rise in the minimum wage will shock the overall domestic economy and scare local manufacturers into relocating their factories abroad.
"This will weaken Thailand's overall private sector as it will mean the private sector will have less money for new investment and to improve machines to increase competitiveness. The impact on the country's economic growth will be felt in the long term," Mr Thanavath said.
The wage policy should be carefully considered and the increase should be made on a step-by-step basis, he said.
There are about 37 million people in the Thai labour force, with 12 million in the farm sector and 6 million in the manufacturing sector.
There are about 3 million registered foreign workers in the country.