Labour minister urges restraint on minimum wage
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Labour minister urges restraint on minimum wage

Pipat says increase to B400 a day should be gradual and based on economic conditions

Construction labourers work on a section of the overpass at the Na Ranong intersection in Bangkok in April. (Photo: Apichart Jinakul)
Construction labourers work on a section of the overpass at the Na Ranong intersection in Bangkok in April. (Photo: Apichart Jinakul)

The Ministry of Labour agrees with business leaders on delaying a government pledge to increase the daily minimum wage to 400 baht, recommending it be phased in based on inflation and economic growth.

Prime Minister Srettha Thavisin said in parliament on Tuesday that the government would meet with representatives of employers and employees to discuss increasing the minimum wage to 400 baht.

On the campaign trail, the Pheu Thai Party set a more ambitious goal of increasing the wage to 600 baht a day by 2027, if economic conditions permit.

“If we are going to increase the minimum wage to 400 baht, inflation and GDP must be considered,” said Labour Minister Pipat Ratchakitprakarn, who is the deputy leader of the Bhumjaithai Party.

“Under the current economic circumstances, the wage should increase by 2%.”

Mr Pipat made the comments at a meeting on Friday with members of the Federation of Thai Industries (FTI), who have advised a cautious approach on wage increases.

A rate of 400 baht would be 13% above the current maximum of 354 baht that is paid in Chon Buri. Wages vary by province, ranging from 328 to 354 baht. The rate in Bangkok is 353 baht.

Mr Pipat said his ministry is aware that businesses, especially small and medium-sized enterprises, cannot afford to pay a higher wage as they are struggling to deal with high operating costs and liquidity problems.

The Employers’ Confederation of Thai Trade and Industry said earlier that it also disagreed with the 400-baht rate because it may force businesses that had huge financial burdens to resort to layoffs.

According to Mr Pipat, a new minimum wage will be discussed by the tripartite wage committee made up of employers, employees and government representatives, and is scheduled to be concluded in November.

Up to 20 of 45 industries under the FTI are labour-intensive, and they pay different wage rates under 400 baht, while the remainder pay more than 400 baht, said FTI chairman Kriengkrai Thiennukul.

Factories that hire many workers are vulnerable to the impact of wage hikes, he said.

“If the tripartite wage committee agrees to increase wages, it should base its consideration on inflation and GDP. The wage should be also adjusted in accordance with workers’ skills,” he said.

There are currently 40.3 million workers in Thailand, with 2.7 million of them being migrant workers from neighbouring countries, according to the FTI.

Some 5-6 million workers are in the manufacturing sector. Around 12-13 million workers are members of the Social Security Fund.

The FTI wants the government to sign agreements with neighbouring countries to import more workers, in order to solve a labour shortage.

“Thailand needs more than 300,000 workers to serve many industries and carry out dirty, dangerous and difficult jobs which are not done by many Thai workers,” said Suchart Chantaranakaracha, the vice-chairman of the FTI.

Labour Minister Pipat Ratchakitprakarn, right, attends a meeting with the Federation of Thai Industries on the daily minimum wage on Friday. (Photo: Federation of Thai Industries)

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