In the bustling heart of Bangkok, construction workers can be seen commuting on a songthaew along Rama IV. Amidst this everyday scene, a storm is brewing over the proposed hike in the daily minimum wage to 400 baht nationwide—an idea that has the Federation of Thai Industries (FTI) in Chiang Mai deeply concerned. (Photo: Apichart Jinakul)
Chakrin Wangwiwat, the chairman of FTI in Chiang Mai, argues that increasing the daily minimum wage during the period from May 1 to October 1 is not only excessive but also mismatched with the current economic realities. The private sector, particularly small and medium-sized enterprises (SMEs), is experiencing trepidation that this wage hike could tip them towards temporary or even permanent shutdowns due to financial strain.
At the moment, the minimum wage in Chiang Mai stands at 352 baht per day. “Boosting it to 400 baht would hike production costs by 10%, lead to higher social security contributions, and eventually result in increased product prices,” explains Mr. Chakrin. “This chain reaction could significantly raise the cost of living.”
Already, numerous industries such as electronics, appliances, telecommunications, and agricultural processing have adjusted their minimum daily wages for skilled workers. However, this sweeping increase proposed might be too much for many to bear. The private sector suggests a more gradual approach, perhaps inching up from 352 baht to 355 or 360 baht. Additionally, the government should devise strategies to assist business operators, especially those in the SME sector.
To mitigate the impact, proposals include reducing the cost of essential utilities like water and electricity, and offering low-interest loans to enhance business liquidity. “The government needs to regulate foreign investment stringently,” Mr. Chakrin adds, “especially from Chinese investors who establish low-cost production facilities lacking industrial certification, which poses a consumer risk.”
The Board of Investment (BOI) has a role to play in uplifting SMEs to ensure they can compete on both quality and price with neighboring countries. Mr. Chakrin emphasizes that the proposed wage increase should take into account the economic readiness and global competitiveness of businesses. It is crucial, he notes, for members of the tripartite wage committee to have in-depth discussions to arrive at a balanced decision that won’t disrupt the economy.
“In Chiang Mai alone, more than 1,000 small businesses have shuttered,” Mr. Chakrin points out. “We need to tread carefully and thoughtfully to prevent further closures and ensure a stable economic environment for all.”
Raising the minimum wage to 400 baht sounds great for workers, but can SMEs really handle it?
Many SMEs are already struggling. This could be the final straw for some.
Then shouldn’t there be more government support for these small businesses?
I agree, but support seems to be in short supply these days.
Workers can’t survive on current wages. The increase is necessary.
If product prices go up, won’t the minimum wage increase become meaningless due to inflation?
Exactly. Raising wages without addressing other economic factors is a band-aid solution.
Good point, but we need to start somewhere. Better wages can improve quality of life.
This wage hike is just going to chase away small businesses and hurt our local economy.
I don’t think so. If businesses can’t pay a fair wage, they should adapt or close.
It’s not about fairness. It’s about survival. Many small shops will shut down.
What about addressing the real problem: cost of living in Chiang Mai?
The government needs to step in with more than just wage increases; how about subsidies for small businesses?
This wage hike seems like a risky move during such uncertain economic times.
But when is the right time? There will always be risks.
I’m worried about quality control if foreign low-cost production increases.
We need stricter regulations to prevent substandard products.
Foreign investment can be a double-edged sword. Benefits and risks need to be balanced.
I work in manufacturing. We’ve already seen some companies move operations to other countries where labor is cheaper.
True, but improving worker conditions can also lead to better productivity.
Productivity is important, but only if the business can stay afloat.
Cost of essential utilities should be reduced as a priority. This would help all sectors.
It’s easier said than done. Utility companies won’t reduce prices overnight.
The proposed hike is not enough given the current prices in the market!
Then start with small increments. Sudden hikes could cause chaos.
This increase might force businesses to cut back on hiring, leading to more unemployment.
Balancing wage hikes with economic growth is crucial.
The private sector is always worried about costs, but they seldom consider the cost paid by workers living in poverty.
Poverty is indeed an issue, but sudden wage hikes won’t fix poverty without other economic reforms.
Looking at the bigger picture is necessary, but we also need some immediate relief for workers.
It’s interesting how every proposal to improve worker conditions is met with so much resistance.
Why is no one talking about improving productivity alongside wage hikes?
The government needs to take more decisive action instead of leaving businesses and workers hanging.