ECONOMY

ECONOMY

Kittiratt: Wage hike not compulsory

The debate over the government's plan to raise the minimum wage to 300 baht a day nationwide took a new twist yesterday when Deputy Prime Minister Kittiratt Na-Ranong hinted it would not be mandatory for businesses.

"The hike will not be a compulsory measure, but the government needs to accelerate working out measures to help the private sector reduce production costs such as interest rates, corporate income taxes and human resource development," said Mr Kittiratt.
In any case, he said, the government would take the lead by raising the wage for workers at state agencies and enterprises.
Mr Kittiratt held informal talks on the issue yesterday with the joint standing committee on commerce, industry and banking. He was joined by Finance Minister Thirachai Phuvanatnaranubala and Labour Minister Padermchai Sasomsap.
Nonetheless, Payungsak Chartsutthipol, the chairman of the Federation of Thai Industries (FTI), reiterated hopes that the government would gradually raise the minimum wage to 300 baht over three years and not do so all at once.
"Actually, business operators want a four-year period, but I think three is appropriate to have everything in place," he said, adding that the decision on the wage hike should rest with the tripartite committee, consisting of civil servants, businesspeople and labour representatives, to better reflect the market mechanism.
Mr Payungsak earlier had said that an immediate increase would cause the private sector to bear the burden of up to 100 billion baht in the first year on a 40-80% increase in costs, with low-margin, labour-intensive companies hit first.
More than 10 industries would feel a major impact, including the garment, textile, processed food, agriculture, furniture and shoe industries, though Mr Payungsak said the FTI has yet to perform a deep analysis of the effects on each industry to present to the government.
"Some business operators have been saying that there is a split in opinion among their workers and that some are saying they understand their employer's position because the company's performance affects employees," he said.
In a related development, the Thai Industries Sentiment Index (TISI) fell to 105.2 in July from 107.4 in June.
Mr Payungsak attributed the decline to manufacturers' concerns about rising prices for raw materials, the policy to raise the daily minimum wage to 300 baht, continuing high fuel prices and the upward trend in interest rates.
Manufacturers also worried that the strengthening of the baht would hurt the export sector and that the fragile global economy could have an adverse effect on the Thai economy, he added.
But the TISI's continued readings above 100 reveal high confidence among industrial manufacturers. One key factor helping to boost industry confidence is the continued expansion of exports, Mr Payungsak said.