Labour-intensive industries fret about next pay hikes
Days after the promised rise in the daily minimum wage took effect in seven provinces, industries are already worrying about the next wave, as labourers in the rest of the country also see their pay packets swell next year.
Meanwhile, the Labour Ministry is preparing relief packages for |small and medium-sized enter-|prises affected by the new mini-mum of Bt300 a day, including |tax deductions and cheap loans.
“We’re concerned: What next?” Poj Aramwattananont, president of Sea Value Co, said yesterday.
The food industry will be hit hard by both the daily-wage hike and the minimum monthly salary of Bt15,000 for those holding a bachelor’s degree, he told a seminar hosted by Kasikornbank on the impact of wage policies on SMEs.
The food industry is labour-intensive, and his company employs about 18,000 workers, of whom 30 per cent are Thais and the rest foreign labourers. He said he had to reorganise his business to deal with the higher wages. He has set performance benchmarks for workers to encourage productivity. If they meet their targets they will receive a bonus, he said.
He called for politicians to consult with industry first before introducing wage policy. Before the Pheu Thai Party campaigned during the last general election by promising a wage hike, it did not consult with the private sector and imposed the policy without research to back up, he claimed.
He lamented that the government policy would increase overall income for labourers by at least Bt120 billion a year.
Suwanchai Lohawatanakul, a director of Thai Kaneta Co, said that because of appreciation of the baht since 2006 and high labour costs, his company, which is engaged in the garment industry, had tried to move up to the high-end segment to compete with brand-name products from Italy. He said he could not compete with cheap apparel from China or other countries with low labour costs or cheaper currency exchanges. He urged the government not to increase wages in the remaining 70 provinces.
Ploy Naratusachan, managing director of V& P Jewellery Co, said her family was facing competition from India, where wages are much lower and the government has many measures to support the industry. Her firm has tried to seek new export markets. Moreover, the high price of gold and diamonds had also hit the business hard, as her products are not much cheaper than brand-name items, she said.
Somkiart Chayasriwong, permanent secretary for the Labour Ministry, said it was preparing a new tax and financial package to support SMEs affected by the wage hike and needed Cabinet approval on this.
He said he had consulted with the Finance and Industry ministries about the package. The Small and Medium Enterprise Development Bank of Thailand would provide soft loans of Bt20 billion. The government may offer employers tax deductions up to 1.5 times the wage rise the pay, he said. Income from selling old machinery would be exempted from tax, while those buying new machines would be given a full tax deduction for depreciation costs within the first year.
