The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) is opposing the Pheu Thai Party's pledge to raise the daily minimum wage to 600 baht because it could affect the business sector's competitiveness.
Such a wage hike would impact foreign direct investment (FDI) and the survival of small and medium-sized enterprises (SMEs), according to the committee.
In addition to the minimum wage hike, the Pheu Thai Party kicked off its election campaign on Tuesday by vowing to introduce a minimum monthly salary of 25,000 baht for those holding a bachelor's degree.
The Thai economy faces several challenges next year, including an uneven recovery, higher inflation and rising interest rates, as well as a global economic slowdown, said the JSCCIB. As a result, a minimum wage hike would increase risks for the business sector, Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said at the committee meeting on Wednesday.
Some SMEs would be under pressure to shut down if wages rose to 600 baht per day, up from the current level of 328-354 baht. Many SMEs have recovered from the impact of pandemic closures, but their condition is still fragile, he said.
Thailand's competitiveness and ability to attract FDI have faded, especially compared with Vietnam. Thailand's minimum wage rate is 40% higher than Vietnam, according to the chamber.
"It is not a good time to significantly raise the minimum wage to 600 baht. The existing mechanism to increase the country's minimum wage is a suitable instrument. The minimum wage was raised by 5% on Oct 1 this year, so another increase should be considered at a suitable time and using a suitable rate," Mr Sanan said.
Any wage increase should match economic circumstances and be in parallel with the development of the country's knowledge-based economy, including upskilling and reskilling workers to improve productivity, he said. Moreover, wage hikes should take into consideration employers' ability to pay such salaries, said Mr Sanan.
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said the committee plans to submit a letter to the government next week asking for a delay in the fuel tariff (FT) increase scheduled for January to April next year. The government recently raised the FT twice and the rising electricity cost has been affecting business operators amid an uneven economic rebound.
The committee forecasts the Thai economy to continue to recover in 2023, with a GDP growth rate in the range of 3-3.5%, mainly driven by the tourism sector. The private sector estimates foreign tourist arrivals will increase to around 20 million next year, from a projection of 10 million for 2022.
However, the JSCCIB predicts lower export growth next year as a result of the global economic slowdown and concerns about a recession. China reopening its economy in the second half of 2023 should support the global economy and Thai exports, with Thai shipment growth for the full year of 1-2%, compared with a forecast of 7.25% for 2022.
Thailand's inflation rate is expected to decline to a range of 2.7-3.2% in 2023, down from 6.2% this year.
