The Federation of Thai Industries (FTI) in Chiang Mai has insisted hiking the daily minimum wage to 400 baht nationwide is excessive and unsuitable given the current economic conditions.
Chakrin Wangwiwat, chairman of FTI in Chiang Mai, said the private sector has expressed concern the decision to increase the daily minimum wage from May 1-Oct 1 does not align with economic conditions, particularly for small and medium-sized enterprises (SMEs) with limited financial resources.
The change could affect SMEs into temporary or permanent shutdowns due to financial pressures, he said.
Currently, the minimum wage in Chiang Mai stands at 352 baht per day. “Increasing the minimum wage to 400 baht will result in a rise of production costs by 10%, higher social security contributions and higher product prices, which will eventually lead to an increase in the cost of living,” Mr Chakrin said.
At present, most industries such as the electronics, appliances, telecommunications and agricultural processing sectors have already increased the minimum daily wage for skilled workers.
The private sector suggested the government gradually increase wages step-by-step, such as increasing the minimum wage in Chiang Mai from 352 baht to around 355 or 360 baht.
Additionally, the government should also come up with measures to compensate business operators especially those in SMEs sector.
They include reducing the cost of water, electricity and other public utilities and providing low-interest loans to improve business liquidity.
“The government must regulate foreign investment, particularly from Chinese investors who set up low-cost electronics and appliances production facilities that lack industrial standard certification,” he said. “This poses a risk to consumers.”
The Board of Investment (BOI) should promote SMEs and boost their competitiveness against neighbouring countries in terms of quality and price.
The wage rise should consider firms’ economic readiness and competitiveness on the global stage, he said, adding a discussion among members of the tripartite wage committee is necessary to determine the appropriate minimum wage hike that won’t disrupt the economy. In Chiang Mai, over 1,000 small businesses have shut down, Mr Chakrin said.