Prime Minister Srettha Thavisin on Tuesday defended his plan to introduce a nationwide daily minimum wage of 400 baht (US$10.88) as a necessary move for the economy, as business groups voiced concerns about the impact of higher wage costs.
The government last week said it planned to increase the daily minimum wage nationwide from October, a policy that could help lift consumption in Thailand, which is lagging peers in Southeast Asia.
"It's about the lives and livelihoods of the people at the grassroots, which is an important gear in driving the economy. Their livelihoods are important," Mr Srettha told reporters after a cabinet meeting.
Wages have been risen just over 10% over the past 10 years, he said.
The wage hike was a key election platform of Mr Srettha's populist Pheu Thai Party, which set a target of 600 baht per day by 2027.
The Thai Chamber of Commerce said it disagreed with the move as it would affect the economy and competitiveness. The shippers council said the hike would stoke inflation.
The government has raised the minimum wage to 400 baht in several provinces already as a pilot scheme. The previous government increased the minimum wage by 5.02% in 2022.
To help ease living costs, Mr Srettha also said the government would keep diesel prices at up to 33 baht ($0.89) per litre to help ease living costs.
The government would also freeze some liquefied petroleum gas (LPG) prices and reduce some electricity costs, he said.
An attendant grabs a nozzle from a fuel dispenser at a petrol station in Bangkok. (Photo: Somchai Poomlard)
Thailand's headline inflation rate was positive for the first time in seven months in April but was below the central bank's target range of 1% to 3% for a 12th consecutive month.
Deputy Finance Minister Paopoom Rojanasakul on Tuesday said that target was still appropriate and the government would discuss with the central bank on how to bring inflation back within that range.
"The inflation target range is not a problem, but the problem is inflation has been out of the target range for a long time, which may affect the economy in the long term," he told reporters.
Last week, Labour Minister Phiphat Ratchakitprakarn said the wage increase was unlikely to happen until Oct 1.
The tripartite wage committee — comprising representatives of the government, employers and employees — is scheduled to meet on May 14 to discuss the issue further, he said.
Proponents of a higher minimum wage say that putting more money into workers’ pockets will spur consumption at a time when the economy is struggling to find momentum.
The Ministry of Finance cut its economic growth forecast for 2024 to 2.4% from 2.8%, but said growth could still reach 3.3% if its signature 500-billion-baht digital wallet handout designed to boost spending is launched in the fourth quarter as expected.