Higher wage may hurt workers: TMB Analytics
The government's wage policy could backfire, as small business operators will pass on partial burden to prices, food in particularly, TMB Analytics warned.
In a research, the research unit of TMB Bank said that its study showed that for every Bt100 increase in wage, on average operators would pass on 20 per cent of the higher cost to consumers. However, the minimum wage increase, at 40 per cent in one year, would accelerate the process. Prices could increase more quickly, it said.
Food prices in particular would be subjected to greater volatility. In the first two months of this year, the food and beverage price index increased 7.4 per cent from the same period last year. The index of ready meals in particular rose 9.2 per cent on year. This is against the 3.4 per cent increase in the overall price index.
“The higher wage could raise the food price index this year by another 4 percentage points, to 11-13 per cent,” it said.
While supporting the wage hike as the low-income earners' income has not coped with the increasing cost of living in the past years, but the accelerated increase could force operators to pass on as much burden to consumers and this could spike up the cost of living of the general public. This will affect low-income earners, those workers in particular, as the cost of food would account for a high ratio of thier income.
