Wage hike will stimulate economy: expert
The increase in the daily minimum wage to Bt300 in another 70 provinces, which was approved on Tuesday and will go into effect on January 1 next year, will help stimulate consumption of domestic products and be beneficial to the economy in the long run, a
The hike would not affect employers or result in much higher costs, said Assoc Prof Narong Phetprasert.
"There is a wide misunderstanding that the hike will result in a 40-per-cent rise in production costs, but the figure is more likely to be 15 per cent on average," he said.
Businesses expected to be most affected by the hike are those in labour-intensive sectors such as textiles and furniture. Some of these, however, should be able to take advantage of government help to negotiate with neighbouring countries for incentives and assistance in relocating out of Thailand, said Narong.
"Those [Thai-owned] factories should be operated in Myanmar, Cambodia and Laos, hiring local workers under tax incentives and other investment-relevant benefits given by host countries," he added.
A Thailand Development Research Fund senior official, Yongyuth Chalaemwong, approved a minimum-wage hike in principle, but said it should be implemented step by step over a three-year period.
"Paying Bt300 to workers in 70 provinces [in addition to the seven already covered] at one time will abruptly and greatly burden employers, who as a result may have no choice but to opt for lay-offs or to give up their businesses.
"Increasing work efficiency through skills training will be an effective way to cope with unemployment in the long term, because it will help unskilled labourers extend their contracts, while those laid off will be able to get training and be re-hired quickly – there is still a lack of skilled labour," he added.
