Minimum wage rethink urged
Business group warns of threats to SMEs
A group of business leaders yesterday called on the government to review the daily minimum wage hikes recently approved by the tripartite national wage committee, saying they will hit small and medium-sized enterprises (SMEs), farms and the service sector.
They also called on the government to decide the wage hikes based on the discretion of each provincial wage committee.
Kalin Sarasin, chairman of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) and chairman of the Thai Chamber of Commerce, said the minimum wage hike resolution made last week by the tripartite national wage committee was not based on the economic conditions of each province, nor was it in line with the provincial wage committee’s proposal or Section 87 of the 1998 Labour Protection Act.
The JSCCIB plans to send proposals from the private sector to Prime Minister Prayut Chan-o-cha to express their concern about the impact of the daily minimum wage hikes if they increase nationwide from April 1 in a range of 5-22 baht, rising 1.64-7.14% from 300 baht now.
“The JSCCIB has surveyed its members nationwide after the wage committee’s decision on a wage hike last week and found it exceeds the rates proposed by provincial wage committees representing local employers, employees and the Bank of Thailand’s representatives chaired by governors,” Mr Kalin said. “Some 92% of all provincial committees proposed lower wage hikes than the national wage committee resolved.”
The survey also found that the provincial wage committee in 35 provinces had asked for the wage not to be raised in their provinces, which i ncluded Rayong, Nakhon Pathom, Nonthaburi, Samut Prakan, Samut Sakhon, Ubon Ratchathani, Suphan Buri, Nong Khai, Trat and Chiang Mai.
The survey also found that the wage hike in 36 provinces approved by the national wage committee was higher than the proposals of the provincial committees. Those provinces included Phuket, Chon Buri, Bangkok, Pathum Thani, Chachoengsao, Saraburi, Ayutthaya, Songkhla, Khon Kaen, Surat Thani, Krabi, Phatthalung and Surin.
Mr Kalin said the wage in Rayong province, for example, would rise to 330 baht a day, though the province had proposed a hike to 308.
“Such a wage increase doesn’t reflect the real local economic situation, because Rayong has a lot of fruit plantations, SMEs, services and tourism-related operators,” Mr Kalin said. “Serious effects will be felt by farmers, SMEs and service providers that fail to adjust to the rising costs.”
The JSCCIB warned that a higher jobless rate is likely if local manufacturers abruptly shift to relying on machines and technology over labour.
Poj Aramwattananont, vice-chairman of Thai Chamber of Commerce, said the wage increase should be based on economic conditions, business size, per capita income, cost of living and employment in each province.
“We don’t oppose any increase in the daily minimum wage, but we think the increase should also take into account the side effects and be based on the real situation in each province,” Mr Poj said.
But Labour Minister Adul Sangsingkeo said the tripartite national wage committee already took into account all factors, including labour costs and inflation.
The hike may have some effects in the short term, he said, but it will be good for the overall economy.
Gen Prayut yesterday asked employers, workers and the public sector to accept the wage increase as approved by the national wage committee, saying the wage should rise 1% every year after being static the last three years.
“I would like to ask both labour and employers to understand the situation,” he said. “The wage hike may result in an increase of expenditure for entrepreneurs, but it will also spur consumer spending and create multiplier effects in the Thai economy.”