Business sector feels pinch of govt’s minimum wage hike

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BANGKOK, Sept 12 – The Pheu Thai-led coalition government’s planned 300 baht daily minimum wage hike has forced some businesses to shift their production bases to areas bordering Cambodia and Myanmar, the Employers’ Confederation of Thailand (ECOT) told a seminar on Monday.

At a seminar on implementing the Bt 300 daily minimum wage policy held here by ECOT and the International Labour Organisation (ILO),  ECOT President Anantachai Khunanantakul warned that the government’s planned wage increase would inevitably hurt tens of thousands of small and medium-sized enterprises (SMEs) as well as subcontractors.

“ Some electronics entreperneurs have relocated their plants to Sa Kaeo province’s Aranyaprathet district bordering Cambodia and Tak province’s Mae Sot district bordering Myanmar,” Mr Anantachai said.

In an attempt to allay concerns among entrepreneurs, Labour Minister Phadermchai Sasomsab said the ministry is heeding complaints from all stakeholders, in particular the SMEs, to work out a possible solution.

Among measures the government will introduce to help ease their burden are a corporate tax reduction plan from 30 per cent to 23 per cent next year and 20 per cent the following year, and a reduction for the employers’ contribution to the Social Security Fund as well as reduced utility fees to reduce production costs.

The minister said the planned wage hike will be piloted in seven designated provinces in January, while the remaining provinces will be initially have wage increases of about 40 per cent and to be gradually raised to 300 baht within two years.

Meanwhile, ILO employer actiivity senior specialist Dragan Radic advised the Thai government to establish a committee to service as many as 3 million SMEs likely to be heavily affected by the wage hike, especially labour-intensive businesses.

He urged a gradual implementation of the wage increase to facilitate adaptation by the private sector, rather than a quick implementation of the pilot scheme in the first seven provinces, which he viewed as being too early.