Incoming Thai government urged to reconsider minimum wage raise

Raising the minimum wage too quickly can jeopardise the sustainability of many small businesses and cost job losses, said the Federation of Thai Industries.
By: | May 18, 2023
Topics: Compensation and Benefits | News | Thailand

While two winning political parties are promising to enforce their pledge to raise the minimum wage substantially if elected in Thailand’s general elections, the Federation of Thai Industries (FTI) has cautioned that any hefty wage increase would hurt businesses, jobs and competitiveness.

A sudden and sharp increase in the current minimum wage, said FTI Vice-Chairman Montri Mahaplerkpong, could lead to a dip in competitiveness and foreign direct investment, reported Bangkok Post. Instead, he urged the in-coming government to set wages based on skills and productivity.

Wiwat Hemmondharop, another FTI Vice-Chairman, pushed the idea that Thailand should be adopting average wages instead to help businesses adjust.

“If wages rise a lot, small businesses will die first. A fast, big jump in wages without looking at the business structure will make people lose their jobs,” he said.

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The political party Move Forward has promised to raise the daily minimum wage from 337 baht (US$9.86) to to 450 baht (US$13.16), with annual revisions, while the Pheu Thai party has pledged to increase it to 600 baht (US$17.53) by 2027.

The FTI’s industrial sentiment index in April dropped for the first time in four months, from 97.8 in March to 95.0 in April, thanks to weak global demand, higher production costs and currency volatility.