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Members of the Federation of Thai Industries (FTI) are concerned about the Move Forward party’s policy to increase the minimum wage to 450 baht/day.
The Move Forward Party’s proposal to increase the minimum wage to 450 baht per day has sparked mixed reactions from businesses and workers. While some see it as a way to boost the purchasing power of low-income earners and stimulate the economy, others fear it will lead to higher costs, layoffs and closures of small and medium enterprises (SMEs).
- Members of the Federation of Thai Industries (FTI) are expressing concern over Move Forward party’s policy to increase the minimum wage to 450 baht/day.
- Businesses want the minimum wage to be increased step by step instead of in one go, so they will have time to make adjustments.
- The MoU signed by the coalition led by Move Forward includes items such as abolition of all monopolies, promotion of fair competition, land reform, improvement of electricity production, and creation of a comprehensive welfare system.
Why does Move Forward want to raise the minimum wage?
According to Move Forward, the current minimum wage is not enough to cover the basic needs of workers, especially in light of the rising cost of living and the economic fallout from the COVID-19 pandemic. The party argues that raising the minimum wage will boost domestic consumption, stimulate economic growth, and reduce social problems such as crime and drug abuse.
The party also cites international studies that show that increasing the minimum wage does not necessarily lead to job losses or inflation, as long as it is done gradually and reasonably. The party points out that Thailand’s minimum wage is lower than that of many other countries in the region.
How do businesses react to this policy proposal?
Some businesses have voiced their opposition to this policy proposal, saying that it will increase their labor costs and hurt their competitiveness in both domestic and international markets. They also warn that it will force them to lay off workers, reduce working hours, or relocate their operations to cheaper countries.
For example, Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said that increasing the minimum wage by 64 baht per day would add 192 billion baht per year to the total labor cost of businesses. He said that this would be too much for many small and medium-sized enterprises (SMEs) to bear, especially in sectors such as agriculture, tourism, and manufacturing.
A similar concern was also raised by Boonchoo Saisakpong, CEO of the Trang Seafood Company, who suggested that the new government should increase the minimum wage step-by-step, to ease the financial burden on businesses.
The Thai Chamber of Commerce (TCC) has also voiced its opposition to the policy, saying that it would hurt SMEs, which account for more than 80% of the country’s businesses and employ about 12 million people. The TCC estimates that the minimum wage hike would increase the labor cost of SMEs by 18.9%, which would reduce their profits by 6.5%. The TCC proposes that the government should focus on improving the skills and productivity of workers instead of raising their wages artificially.
On the other hand, some labor groups have welcomed the policy, saying that it would improve the quality of life and dignity of workers. They argue that the current minimum wage is too low to meet the rising cost of living and that it has not kept pace with the economic growth and inflation over the years. They also point out that Thailand’s minimum wage is lower than that of some neighboring countries, such as Vietnam and Cambodia.