A new law ensuring the national tripartite wage committee is independent is needed to prevent intervention by politicians pledging minimum wage increases during election campaigns, says the Employers’ Confederation of Thai Trade and Industry (EconThai).
Wage increases should be carefully determined by the committee, which consists of representatives of employers, employees and the government, said the confederation.
Pay rates must not be directed or influenced by populist policies, it added.
“We agree that wages must be periodically adjusted, but an increase must be based on factors such as inflation, employers’ revenue and economic circumstances,” said Tanit Sorat, the vice-chairman of EconThai.
“Thailand needs a law to prevent politicians from intervening in the committee’s work.”
The factors that influence wages and need to be addressed by the committee to come up with rates that are fair, he said.
The Pheu Thai Party made made an election campaign promise to raise the minimum daily wage to 600 baht by 2027, with a rate of 400 baht but the end of this year.
The current minimum wage ranges from 328 to 354 baht depending on the province.
Since Pheu Thai took office as the head of the coalition in September, various party figures have continued to declare their support for a 400-baht daily rate as a New Year gift to workers.
Labour Minister Pipat Ratchakitprakarn, of the coalition member Bhumjaithai Party, has maintained that while wages should rise, an increase to 400 baht — 13 to 22 percent above current levels — is not feasible.
Political parties may benefit from wage promises, but businesses, especially small and medium-sized enterprises (SMEs), will shoulder higher labour costs, said Mr Tanit.
“Many SMEs cannot afford to pay a higher wage. A wage hike will cause them to lay off workers, meaning workers bear the brunt,” he said.
Employers’ representatives suggested that the government consider using the average inflation rate, which should stand at 3% for three years, when making wage calculations. This means the daily minimum wage should increase by 3% a year.
The government of Prayut Chan-o-cha resolved to approve a wage increase of 5% last year, which was acceptable to EconThai as it was in line with the inflation rate in 2022.
The Srettha Thavisin administration also plans to increase salaries for civil servants and state agency employees.
EconThai expects this policy to increase budget spending by 70 billion baht for almost 3 million workers.
The last salary increase for government officials was nine years ago.
They need a pay hike because their salary has a low base, but the government must ensure its employees improve the quality and productivity of their work in line with higher salaries, said Mr Tanit.