The Federation of Thai Industries (FTI) has warned that hefty wage increases promised by the winners of Thailand’s election would hurt businesses, jobs, and competitiveness, after industrial sentiment dropped last month.
The Move Forward party 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 FTI said that while it did not object to higher wages, the government should set them based on skills and productivity.
During a press conference, FTI Vice Chairman Montri Mahaplerkpong noted that: “Every time wages are raised, Thailand’s competitiveness falls and FDI drops.” FDI refers to foreign direct investment.
Wiwat Hemmondharop, another FTI vice chairman, said Thailand should adopt average wages, not minimum wages, to help businesses adjust.
He said, “If wages rise a lot, small ones will die first,” adding that: “A fast, big jump in wages without looking at the business structure will make people lose their jobs.”
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. (NNT)