Minimum wage could only rise: govt

 

  

Deputy permanent secretary Arrug Phrommanee, the Labour Ministry’s spokesman, said reports that the Bt300 minimum wage had been scrapped in favour of floating it were misleading.

“At present, there is no cancellation of the Bt300 minimum wage. Any future adjustment will hinge on Bt300 being the base rate. Under no circumstance will the wage be below Bt300,” he said.

Earlier reports stating that the Bt300 minimum wage had been scrapped drew much criticism from academics and labour groups.

The wage was a key election promise implemented by the government of Yingluck Shinawatra, which was ousted last year in the military coup staged by the current junta.

Arrug said no resolution had been reached on the minimum wage and relevant agencies were only discussing options studied by the National Institute of Development Administration and revealed during a seminar last Friday. 

He did say, however, that the government viewed as unnecessary keeping a single minimum-wage rate for all the provinces.

A decision on the 2016 minimum-wage adjustments will be made in October, he said.

Prime Minister Prayut Chan-o-cha said yesterday that the “lump-sum wage rate” was not feasible because there would be “no money” to pay for it and employers would refrain from hiring people.

“Now, where will the money come from to pay for a wage [increase]? We should allow time for [businesses] to build their strength,” he said.

“As I have said, whoever wants to raise their wage must go to the Labour Ministry to test their [skill] qualifications.”

Prayut said foreign labourers had reaped most of the benefits from the Bt300 wage policy and any increase would lure more of them because wages in their own countries were lower, with scores of Thais shunning the work. “We are building our strength to persuade more investment. The Bt300 wage is already hard enough” for employers to meet, the prime minister said.

Hugh Vanijprabha, chairman of the Thai European Business Association’s Aerospace Committee, said the Bt300 minimum wage had “hardly affected” European investors in the Kingdom as they normally paid more than the minimum to attract quality workers with high skill sets.

 

European operators pay more 

“European operators here pay more than Bt300 anyway and they are not here for cheap labour,” he said.

He said it was unclear whether cancelling the Bt300 minimum wage would help the economy and suggested the government should concentrate on increasing the competitiveness of the country’s economy in other ways.

He said Thailand should move away from trying to be attractive in terms of labour costs and head towards a value-added and innovative economy. Hugh warned that social problems such as corruption and crime might worsen if the minimum wage were lowered.

Saha Group chairman Boonsithi Chokwatana said consumer purchasing power remained “soft”, so the government should maintain the minimum wage and the value-added tax at the current 7 per cent, since any adjustment during an economic slowdown would affect the cost of living.

He said the giant consumer-goods group expected no sales growth this year because of the country’s weak economy and poor domestic consumption and would like to see a weaker baht to boost exports.

The company has delayed its investment in Myanmar and shifted to a special economic zone at border city Mae Sot, Boonsithi said.

Leigh Scott-Kemmis, president of the Australian-Thai Chamber of Commerce, said the government should tackle the problem of a skilled-labour shortage and try to find ways to move up the manufacturing value chain to create value-added products, as investors were already looking elsewhere for cheap labour.

“The Bt300 minimum-wage policy is never a problem for Australian manufacturers since they are not in the lower end of the manufacturing line and they no longer see Thailand as a low-value production hub any more,” he said. “Their main concern is to gain access to skilled labour, not cheaper labour.” 

Scott-Kemmis said the government should concentrate on improving the skills of employees in the infrastructure sector and praised Thai companies for leading the way to help achieve this by working with local educational institutions.

Sanan Angubolkul, vice chairman of the Board of Trade and the Thai Chamber of Commerce (TCC), said that before any adjustment of the minimum wage was made the matter should be discussed and agreed to by a tripartite committee composed of representatives from the government, employers and employees. Sanan said this would prevent problems reoccurring, as when the cost of labour increased but productivity did not and consumers faced a higher cost of living.

To measure the opinions of Chamber of Commerce members from each region, he said the TCC had distributed a questionnaire to enterprises nationwide, as wages and living costs varied and the matter should be considered carefully.

He said the minimum wage should be based on the productivity of labourers and the living costs in each province.