Producers urged to retain prices
The government has asked manufacturers to keep product prices unchanged until April, saying the daily minimum wage hike will have an insignificant impact on costs.
Commerce Minister Sontirat Sontijirawong met with 100 representatives from the manufacturing, retail and wholesale sectors yesterday, and said most indicated they would only be slightly affected by the wage hike as they already pay their workers higher wages than the minimum.
More importantly, many manufacturers have shifted to greater dependence on machines and robots in plants.
“The sectors that will be hardest hit are those that are labour-intensive and heavily reliant on labour such as farming, services, small and medium-sized enterprises [SMEs] and student uniform makers,” said Mr Sontirat. “The wage hike is estimated to raise their production costs by about 2%.”
However, he insisted manufacturers in those affected sectors have yet to ask for any price increases.
Mr Sontirat cited the Internal Trade Department’s study that found a hike in the daily minimum wage will affect manufacturers’ production costs by 0.0182-1.0225%, saying there is no reason for product prices to rise before April 1.
The ministry has assigned the department to monitor products that may be affected by the wage hike to prevent any profiteering, he said.
Fresh market operators also requested cooperation in supervising the prices of fresh products and finished foods to prevent any unfair price increases.
Earlier, the ministry estimated the wage increase will raise the labour costs in the manufacturing and service sectors by 10 billion baht a year, accounting for 0.07% of GDP.
The ministry projects higher production costs from the wage hike will raise export costs by 0.022% or 167 million baht, affecting printing, leather goods, garments, furniture and metal fabrication.
The tripartite national wage committee agreed last Wednesday night on increases in the minimum daily wage nationwide from April 1 by 5-22 baht, depending on the province. Phuket, Chon Buri and Rayong will get the highest rate of 330 baht a day.
The government has i nsisted the new wage hikes are appropriate for the current economic conditions.
Nonetheless, a group of business leaders emerged yesterday to ask the government to review the daily minimum wage hikes recently approved by the tripartite national wage committee, saying they will hit SMEs, farms and the service sector especially hard. 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, said the minimum wage hike was not based on the economic conditions of each province.