Move Forward’s policy to raise the minimum wage in Thailand to 450 baht/day immediately, or the Pheu Thai party’s step-by-step increase to 600 baht/day, have sparked widespread reaction, with workers welcoming the move and business operators, big and small, expressing serious concern that, if implemented at one time, they would raise their production costs.
Chantanon Wannakejohn, secretary-general of the Office of Agricultural Economics, said that a minimum wage increase will definitely affect the farming sector.
Labour, he said, accounts for 17.4% of production costs in the agricultural sector, while other costs are incurred by fertilizers and pesticides, adding that some farmers have turned to machinery to reduce the labour cost.
A rice farmer in Sai Noi district of Ayutthaya, who owns 3.2 hectares of farmland, said that he has to hire labourers at about 60 baht per 0.16 hectares to spread fertilizer on his rice fields, adding that there are other labour costs, such as preparing the land for cultivation, which cost 120 baht per 0.16 hectare and spraying insecticides.
A vegetable grower said he has to hire workers to get rid of pests, which costs him up to 300 baht a day. On top of that, there are the costs of fertilizer, insecticides and fuel.
Workers in the Bang Pu industrial area in Samut Prakan told Thai PBS that they are earning an average wage of 353 baht/day, but their daily expenses are about 300 baht, to cover rent, monthly payments for motorcycles and pocket money for their children to go to school.
They said that they have to spend very carefully, so they can save a small amount each day to send home to their parents.Several of them expressed concern that a sudden increase in the minimum wage may force their employers to downsize their workforces or end overtime pay, which is their main source of additional income.
Isares Rattanadilok Na Phuket, vice president of the Federation of Thai Industries, pointed out that the production costs actually pushing up the cost of living include electricity charges, food and travelling expenses and other public utility fees, which are higher than in Thailand’s neighbouring countries.
He blamed the oligopolies in Thailand, which enable a handful of big businesses to have control over the market and to dictate the prices of public utilities freely, as he urged the new government to end this practice and to push for a state welfare system.
Isares said that business operators are ready to increase wages in line with their skills, adding that the government should develop the skills of Thai workers.
Sangchai Theerakulwanich, president of the Federation of Thai SMEs, said that wage increases should be undertaken in line with the development of the skills of Thai labour and reductions in electricity and fuel prices, while encouraging businesses to come under the tax system. Tax incentives for businesses who are ready to increase wages should also be considered, he said.
