BANGKOK: Hefty wage increases promised by the winners of Thailand’s election would hurt businesses, jobs, and competitiveness, an industry group said on Tuesday (May 16), after industrial sentiment dropped last month.
The Southeast Asian country’s main opposition parties, Move Forward and Pheu Thai, agreed on Monday to form a ruling coalition after they trounced military-backed rivals, that have controlled government for nine years, in voting on Sunday.
Move Forward has promised to raise the daily minimum wage to 450 baht (US$13.29), with annual revisions, from an average 337 baht, while Pheu Thai has pledged to increase it to 600 baht by 2027.
The Federation of Thai Industries (FTI) said that while it did not object to higher wages, the government should set them based on skills and productivity.
“It’s our main concern. Every time wages are raised, Thailand’s competitiveness falls and FDI drops,” FTI vice chairman Montri Mahaplerkpong told a press conference, referring to foreign direct investment.
Wiwat Hemmondharop, another FTI vice chairman, said Thailand should adopt average wages, not minimum wages, to help businesses adjust.
“If wages rise a lot, small ones will die first,” he said.
“A fast, big jump in wages without looking at the business structure will make people lose their jobs,” he said.
The federation said a new government should be set up quickly to tackle economic challenges as global growth has slowed.
The FTI’s sentiment index in April dropped for the first time in four months to 95.0 from 97.8 in March, dented by weak global demand, higher production costs and currency volatility.
