New wage hike will affect small firms: Thai tripartite committee

The push to implement higher wage hike soon after the most recent one went into effect will affect small firms harder, says Thai tripartite wage committee.
By: | January 24, 2024

Businesses, especially small and medium-sized enterprises (SMEs)are likely to experience a daily minimum wage increase amidst high loan interest rates if the Thai government continues to push for a wage hike.

This was the sentiment issued by the Federation of Thai Industries (FTI), the tripartite wage committee consisting of representatives from the government, employees and employers.

The committee had resolved in late 2023 to increase wages in Thailand by 2.37% or by 2-16 bhat a day (US$0.056-0.45), which went into effect at the beginning of this year.

Despite this, the wage increase was not satisfactory for Srettha Thavisin, Prime Minister of Thailand, who commented that the employees in the Southwestern provinces of Thailand would not be able to make a living. The Prime Minister is seeking to raise the minimum daily wage mere months after the last raise, commenting that there was nothing wrong in changing the rates more than once a year. This has drawn criticism from detractors like those in the FTI.

“The business sector would be shocked if the wage were to increase more than one a year,” said Apichit Prasoprat, Vice-President of the FTI. “Many SMEs certainly cannot afford to pay for a higher wage amid more financial costs cause 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 (US$ 10.36) 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 (US$9.24)

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The main political party of the Thai coalition government had earlier proposed a wage increase to 600 baht (US$16.79) a day by 2027, starting with a hike to 400 baht (US$11.20) daily in 2025. Prasoprat, however, commented that with higher operating costs, driven by higher daily wages, prices, especially in the food and beverage (F&B) sectors, will increase, reported the Bangkok Post.