Study finds wage rise won't carry over into higher prices

Study finds wage rise won't carry over into higher prices

Manufacturers will not be allowed to raise the price of their goods after a Commerce Ministry study found the daily minimum wage hike of 5-6 baht, approved by the national wage committee last Friday, will only marginally affect their production costs.

Whichai Phochanakij, director-general of the Internal Trade Department, said the wage hike was estimated to raise production costs for manufacturers by 0.0061-0.6041%.

Student uniforms are expected to be impacted the most, given their labour-intensive production, with products for daily use having the least change, as most of the products rely largely on machines in their production process.

The department also estimated the wage rise would affect dishes of noodles and rice with curry by only 10 satang.

By sector, the impact on food and beverage was estimated at 0.0085% to 0.2171%, with goods for daily use only 0.0061% to 0.0973%.

For paper and paper products, the impact was estimated at 0.0452%, electric appliances 0.0387-0.1597% and transport 0.0232-0.1903%.

For construction materials, the study found higher wages will affect their costs by 0.0146-0.2705%, petroleum products by 0.0897-0.1297% and farm-related supplies by 0.0206-0.00675%.

The national wage committee agreed to hike minimum wages from 308-330 baht to 313-336 baht and will propose the rise to the cabinet for effect from Jan 1. Unskilled workers in most provinces will be entitled to 315-320 baht a day.

The six-baht increment will apply in Bangkok, Chon Buri, Phuket, Prachin Buri, Samut Prakan and Samut Sakhon. The five-baht rise will apply to the other provinces. The new wage structure will be proposed to the cabinet by Dec 17 to take effect on Jan 1.

Earlier, Thanavath Phonvichai, vice-president for research at the University of the Thai Chamber of Commerce, said the hike in the minimum daily wage by 5-6 baht is appropriate for current economic conditions and is acceptable for employers.

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