Labour Minister Phiphat Ratchakitprakarn is committed to implementing a nationwide increase in the daily wage to 400 baht on October 1, despite concerns from businesses regarding the potential negative impact on operations.
Speaking on Sunday, Mr. Phiphat stated that after engaging in discussions with business operators and a review conducted by a subcommittee of the Ministry of Labour, the ministry has confirmed the planned wage increase will proceed.
“We are aware that the economy is slowing down. Therefore, I have instructed the permanent secretary of Labour [Phairoj Chotikasatien] to consider the issue using the most analytical information available,” he said.
A study in collaboration with the Social Security Office (SSO) found that the 400 baht minimum wage increase should apply to companies or factories with a workforce of 200 or more.
“This is a summary that we will need to discuss with the National Economic and Social Development Board and the Ministry of Finance,” the minister explained.
The SSO plans to introduce measures to assist businesses with over 200 employees by offering a 1% discount on their contributions to the Social Security Fund (SSF) starting next month, extending until September of the following year.
Mr. Phiphat indicated that small- and medium-sized enterprises (SMEs) with fewer than 200 employees will not be required to raise wages. However, he stressed the importance of supporting these smaller companies, which employ over 90% of the country’s workforce, until the economy recovers.
He expressed confidence that the new government, led by Prime Minister Paetongtarn Shinawatra, a representative of the new generation of leaders, will be capable of stimulating economic growth.
Additionally, the Labour Ministry will propose to the Finance Ministry to reinstate compensatory measures introduced in 2012, during then-Prime Minister Yingluck Shinawatra’s administration when the minimum wage was raised to 300 baht.
Mr. Phiphat also discussed the potential for collaboration with financial institutions to provide low-interest loans to help companies maintain liquidity and manage cash flow after the wage increase takes effect.
Moreover, he mentioned the creation of tax incentives for companies that provide vocational training for their employees.
On the other hand, Sanga Ruangwattanakul, president of the Khao San Road Business Association, expressed concern that the wage increase could bring about both direct and indirect challenges, including a slowdown in employment, layoffs, and escalating costs.
Mr. Sanga urged the government to support the private sector with tax discounts and exemptions until the economy stabilizes.
“I urge the government to reconsider and seek ways to enhance people’s income and ensure they can sustain themselves. Distributing cash is not a sustainable solution,” he said. “The government should focus on job creation and skill development for workers.”
