Businesses, especially small and medium-sized enterprises (SMEs), are likely to suffer from a daily minimum wage increase amid high loan interest rates as the government continues to push for the wage hike, says the Federation of Thai Industries (FTI).
The tripartite wage committee, which consists of representatives from the government, employers and employees, resolved in late 2023 to increase the wage by 2.37% on average, or 2-16 baht per day.
The rate has taken effect since Jan 1 this year.
However, Prime Minster Srettha Thavisin earlier said the new wage was not enough for some workers in the southernmost provinces and vowed to make a more reasonable wage rise. He said it's not necessary to raise the minimum daily wage only once a year.
"The business sector would be shocked if the wage were to increase more than once a year," said Apichit Prasoprat, vice-chairman of the FTI.
"Many SMEs certainly cannot afford to pay for a higher wage amid more financial costs caused by loan interest rates that increased to 7.3%."
Following the 2.37% wage increase, wage earners in Phuket will earn the country's highest rate of 370 baht per day, while their counterparts in Yala, Pattani and Narathiwat in the far South will be then paid the lowest new daily wage of 330 baht.
The Pheu Thai Party, which leads the coalition government, earlier proposed a wage increase to 600 baht a day by 2027, starting with a hike to 400 baht next year.
Mr Apichit said higher operating costs, driven by higher daily wages, will cause prices, especially in the food and beverage sectors, to increase.
Up to 23 of 46 industries are labour intensive, particularly the farm produce and food processing industries, according to the FTI.
Also, around half of the 46 industries currently pay a daily wage of 600-700 baht as they base the payment on the skills of their workers.