Thailand
EconThai calls for wage hike to be based on inflation rate
The Employers’ Confederation of Thai Trade and Industry (EconThai) is urging the government to base the daily minimum wage calculation on inflation, not politically-motivated factors, as the Labour Ministry plans to enforce the new wage hike in October, which is sooner than originally anticipated.
Tanit Sorat, vice-chairman of EconThai, said on Tuesday a 5-8% increase should be suitable and warned against any attempts to raise the wage out of a plot to attract votes in a general election next year.
He was commenting after Labour Minister Suchart Chomklin, a key member of the ruling Palang Pracharath Party, said he would ask the cabinet to approve a new minimum wage within September for enforcement on Oct 1, three months ahead of the original schedule in January.
The minister reasoned that October is the right time to help workers relieve the cost of living situation.
“We agree with the 5-8% increase because it well reflects Thai inflation in line with the Commerce Ministry’s forecast that inflation will stand at 5.5% in 2022,” said Mr Tanit.
The Commerce Ministry earlier upgraded the forecast for headline inflation this year to a range of 5.5-6.5%, up from a range of 4-5% projected in March.
EconThai said it is aware the government is being pressured to come up with a wage hike, following the higher cost of living, driven by expensive energy prices, as well as people’s lower purchasing power, but it needs to think of the increased financial burden on employers.
“The increase in the daily minimum wage by 5-8% is fair. The government should not base the increase on a populist policy,” said Mr Tanit.
The confederation opposes a proposal by labour groups which called for a new minimum wage of 492 baht. The groups said earlier the last wage increase was in January 2020, which took the minimum rate to a range of 313 baht to 336 baht.
EconThai said employers will face different impacts from the wage increase.
“How much impact they must bear depends on the type of business. If their manufacturing is labour intensive, they will face a strong impact,” he said.
Mr Tanit also expressed concern over the revision of the 1998 Labour Protection Act, currently being considered by a Senate committee, as the law will add more financial burdens to entrepreneurs though it is aimed to ensure better welfare for workers.
He said the revision will lead to a need to consider increasing the minimum wage, based on inflation, every year. Currently, there is no exact timing for wage hike considerations.
Source: https://www.bangkokpost.com/business/2364879/econthai-calls-for-wage-hike-to-be-based-on-inflation-rate