Thailand’s Prime Minister Srettha Thavisin on Wednesday defended a cornerstone policy pledge of his populist government, saying that increases to the daily minimum wage would “not be a disaster” for businesses operators.
His comments come after a wage committee of government officials, labour representatives and businesses agreed to a 2.37 percent hike in the minimum wage, which the prime minister deemed too low.
“This government does not agree with (that hike),” Srettha told a business forum, adding that government has already reduced electricity and energy prices to support businesses.
A larger minimum wage hike will be proposed, the labour minister said earlier this week.
“Businesses will find that wage hike will not be a disaster, but will have a positive effect if done properly,” Srettha said, adding that businesses should offer work with “dignity”.
The wage committee last week agreed to raise the threshold to between 330 baht and 370 baht ($9.24 – $10.36) per day, up from 328-354 baht at present. The level varies in different parts of the country.
A previous government last October rose minimum wage by 5.02 per cent.
The ruling Pheu Thai party had campaigned on a key populist plank of raising the minimum wage to 400 baht a day.
Businesses have expressed concern over rising costs and wages as a factor in holding back competitiveness amid sluggish economic growth.
The Federation of Thai Industries expressed concern that businesses would have to shoulder the costs of higher minimum wage along with higher borrowing costs, which could make Thai businesses less competitive.
Southeast Asia’s second-largest economy grew much lower-than expected at 1.5 per cent in the July-September quarter from a year earlier, the slowest pace this year, on weak exports and government spending.
Reuters
