By Thammarat Kitchalong
More than 2,000 small businesses will be affected by the minimum wage hike to Bt300 a day, Labour Minister Phadermchai Sasomsap has warned.
Meanwhile, a senior Bank of Thailand official urged the government to develop workers’ skills to keep productivity in line with GDP growth, and adopt new tax measures and expand markets to aid businesses.
Phadermchai said yesterday the wage hike would not be delayed, but the government would implement measures to aid businesses.
Citing an initial report that 2,193 small and medium-sized enterprises (SMEs) nationwide (excluding Bangkok) employing 49,316 workers would be affected, he said the hardest-hit would be wholesale-retail businesses, car and auto-parts firms, general product manufacturers, construction firms and food producers.
The report recommended a focus on financial and tax moves, marketing and development of labour skills.
“In a week, the ministry will conclude its findings to adjust the planned 16 aid measures, in addition to 11 already-implemented steps, for submission to a December 14 meeting of a committee for remedial measures chaired by Deputy PM and Finance Minister Kittiratt Na-Ranong,” he said.
Labour permanent secretary Somkiat Chayasriwong said that following implementation of the Bt300 wage hike in seven provinces in April, the unemployment rate was recorded at 0.8 per cent in June and 0.7 per cent in December. The hike led to an increase in labour productivity growth from 2-3 per cent to 8.7 per cent, which was the highest in 10 years, he said. Economic expansion rose by 4.2 per cent in July and the inflation rate was low at 2.9 per cent in August.
He said he would propose setting up entrepreneur promotion centres in 70 provinces. Each would have a provincial governor as president and a committee comprising related officials.
They would gather entrepreneurs’ complaints and aid them, and report to the ministry every 15 days.
He said the committee had cut three “irrelevant” moves from the 16 measures for next year: the Thai Khem Kaeng loan-payment period extension; off-system debt relief for employees; and the value-added tax reduction. Related agencies were discussing whether to implement eight measures, while the remaining five would be considered soon.
The director of the Bank of Thailand’s Statistics Office, Somsajee Siksamat, said the wage hike would be a major shock to the economy, but necessary. She said the Thai economy had suppressed wages to cut costs for export goods to compete with rivals, citing as an example the fact that in 2011 the minimum wage was Bt176 per day when the appropriate rate would have been Bt211.
She said the hike would affect manpower-intense businesses such as plastic products, textiles, electric parts, metal and chemical products, clothing, and cars and auto parts. The survival of these businesses depended on their wage structure and profits, as well as adjustment in manufacturing and cost-cutting methods, she said.
Assistance measures should be aimed to boost labour productivity growth from 4 per cent to at least 8 per cent and product-manufacturing efficiency to at least 2.5 per cent, to bring them in line with GDP growth, she said. (The Bank of Thailand predicts GDP growth of 5.7 per cent this year and 4.6 per cent next year.)
The government should implement tax measures to lessen the business sector’s tax burden by half, as well as other cost-cutting and market-expanding measures, she urged. Developing labour skills was also a key factor for GDP growth.
Somsajee urged the government to aid all affected business, saying it should work with the private sector in studying each business’ cost and profit to provide appropriate aid, while adjusting the wage structure to meet labour productivity goals while maintaining competitiveness.
She said Thailand still didn’t sufficiently promote skill training or encourage the business sector to use modern technologies in manufacturing.