While some regard the recent spike in the minimum wage as an economic buffer and a wellness booster for the workforce, others fear its implications on manufacturing expenses and retail prices. The effects it’ll have on various sectors, including real estate, construction, agriculture, and manufacturing, aren’t set in stone — governmental directives and industry responses will shape the eventual result.
Influential business icons express their thoughts below.
Minimum Wage Hikes Should be Steady
Marisa Sukosol Nunbhakdi, the Thai Hotels Association (THA) president, points to the possible positive outcomes of increasing the daily earnings to 400 baht. However, she warns that the proposed increment to 600 baht by 2027 could burden business operators, especially SMEs. She suggests that the government consider the distinct financial climates and prospects across the provinces. Besides, she notes that the high costs of energy, gas, and electricity are already a significant expense for the hotel sector, coupled with labor shortages in the service industry.
Chamnan Srisawat, the Tourism Council of Thailand (TCT) president, has no qualms with the proposed incremental wage increase. He urges a more phased approach to alleviate undue pressure on the tourism industry and hotels. Moreover, he emphasizes the need for coordinated efforts to control costs, such as considering part-time employment to maintain productivity without sacrificing revenue. He also calls on the government to assist in workforce skills improvement and introduce measures to alleviate other expenses like electricity and water.
Foreign Investments May Divert
Wasan Kiangsiri, Housing Business Association president, points out that all stakeholders must collaborate to successfully implement the wage increase policy. An imbalanced approach could result in companies downscaling their workforce, forcing the remaining employees to work overtime. He also warns that if wages increase uncontrollably without a similar increase in product prices, a backlash is inevitable. Long-term, wage increments could deter foreign investors, causing them to explore less expensive neighboring nations.
However, Peerapong Jaroon-ek, Thai Condominium Association president and Origin Property CEO, holds another perspective. Believing in the positive impact of enhancing people’s income, he posits that this would stimulate purchasing power, especially in the real estate sector.
Rising Labor Costs Could Influence Housing Prices
Tritecha Tangmatitham, Supalai Plc managing director, believes the wage hike could benefit the overall economy in the long term by improving customers’ future wealth. However, increased labor costs are already increasing housing prices. He advises the government to allocate budgets transparently and promptly to drive the economy, allowing the real estate sector to grow in tandem with the country’s infrastructure.
Thai President Foods’ general manager, Pun Paniangvait, suggests a more location-specific implementation of the minimum wage increase policy rather than a uniform national approach. He warned against repetition of the centralization issues that resulted from the previous 300 baht per day wage hike in 2011.
In conclusion, there are divided viewpoints on the implications of the minimum wage increase. Whatever the case may be, there’s a general agreement on the importance of thorough planning, implementation, and cooperation from all parties to achieve a balanced and profitable result.