The Federation of Thai Industries is opposing a proposal to increase the daily minimum wage to 492 baht, fearing that small and medium-sized enterprises (SMEs) will be severely impacted.
The FTI was commenting on an open letter submitted to the government ahead of Labour Day on May 1 by the Thai Labour Solidarity Committee and the State Enterprises Workers' Relations Confederation, which called for the wage hike.
The domestic economy has not fully recovered from the impact of the pandemic and the Russia-Ukraine war is adding more pressure this year, said Kriengkrai Thiennukul, chairman of the FTI.
"We understand everyone is affected by a higher cost of living and workers want higher pay from their companies to deal with the greater financial burden," he said.
However, now is not the right time to increase the daily minimum wage as this may hinder the Thai economy and curb its growth, said Mr Kriengkrai.
The federation is particularly worried about the impact on SMEs, as they cannot deal with higher costs.
If these businesses, currently struggling with the impact of Covid-19, have to increase wages, many of them may be forced to shut down, he said.
Mr Kriengkrai said the government could increase the minimum wage gradually when the global economy recovers significantly and Thai businesses, notably those in the tourism sector, get stronger.
The two labour advocacy groups said the last minimum wage increases were in January 2020, when it rose to a range of 313 baht to 336 baht.
The tripartite national wage committee is expected to finalise a proposal calling for an increase in minimum daily wages as soon as August, but it is unlikely to approve a proposed flat-rate wage of 492 baht a day, according to media reports.
Permanent labour secretary Boonchob Suttamanaswong said last week the committee, which comprises labour, business and government representatives, has begun reviewing minimum wages and is expected to reach a decision in August or September.