Thailand to raise minimum wage but not to 400 Baht

• Thailand is planning to raise the daily minimum wage.
• The new wage hike will still exceed inflation.
• The new administration has unveiled a variety of populist proposals.

Thailand intends to establish a new daily minimum wage by the end of the year, but it will not be the previously mentioned 400 baht ($11.19).

The proposed increase in the minimum wage, a significant element of the ruling Pheu Thai party’s election agenda, has raised concerns among businesses about higher operating costs and reduced competitiveness for investors, given the current sluggish economy.

Labor Minister Pipat Ratchakitprakarn stated that the wage hike would still exceed inflation, with the current average daily minimum wage standing at 337 baht.

Thailand’s annual headline inflation rate was 0.88% in August and 2.01% in the first eight months of the year.

While Prime Minister Srettha Thavisin had expressed a desire to raise the daily minimum wage to 400 baht, representing a 19% increase from the current average, Pipat clarified that this policy would not become the official daily minimum wage but rather a “pay by skill” arrangement for workers.

“If the (minimum) wage rises by more than 10%, I believe employers won’t be able to handle it and SMEs will disappear from the country,” he said referring to small and medium enterprises.

Pipat stated following a meeting with the Federation of Thai Industries (FTI) that the new salary is anticipated to be finalized by the nation’s tripartite wage committee by November before being unveiled as a “New Year’s gift.”

The judgment of the pay committee about the rise would be adopted, and the increase rate should be somewhat higher than inflation, according to FTI Chair Kriengkrai Theinnukul.

He added that there were more than 20 labor-intensive industrial groupings in Thailand and that “we have to find a win-win figure.”

A variety of populist proposals have been unveiled by the new administration in an effort to increase economic growth and lower living expenses. One of the primary election pledges was a handout via digital wallets totaling 560 billion baht.

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