Logo of Phnom Penh Post newspaper Phnom Penh Post - FTI: Hike in Thai minimum wage more harm than good

FTI: Hike in Thai minimum wage more harm than good

Content image - Phnom Penh Post
Federation of Thai Industries chairman Supant Mongkolsuthree.​ THE NATION (THAILAND)

FTI: Hike in Thai minimum wage more harm than good

THE Federation of Thai Industry (FTI) is urging the next government to work more closely with the private sector in crafting key economic policies, stating that further hiking the minimum wage – a policy proposed by several political parties – will hurt the low-income sector and be harmful to the economy.

The FTI has prepared its white paper for the new government, in which it calls for the private sector to play a bigger role in creating economic policies and suggests that the government streamline its workforce.

“Moving forward, the private sector should play a more central role in economic policymaking,” FTI chairman Supant Mongkolsuthree said on Wednesday in an interview with the Nation.

He said that new economic policies should further promote technological innovation, and that both public and private organisations should start focusing on technology to boost their efficiency.

Technology will add value to both labour and goods, which will help boost the income of employees as the cost of living continues to rise, Supant said.

“Furthermore, the new government should consider coming up with a clear roadmap for seriously downsizing its total number of employees,” he said, hinting that the government’s workforce is far too big, leading to diseconomies of scale and causing inefficiency in its organisations.

Also, if the workforce is scaled back, government employees will start earning more, which in turn will boost their productivity – something that is much needed, he said.

When asked which economic policy proposal worries the FTI the most, Supant responded saying a hike in minimum wages remained the private sector’s key concern.

“Increasing the minimum wage will increase the cost for businesses, making them less competitive,” FTI vice chairman Kriengkrai Thiennukul said in a separate interview.

This will force many businesses to leave Thailand and opt for neighbouring countries in the CLMV (Cambodia, Laos, Myanmar, Vietnam) region. It may also cause some businesses to try and cut costs by relying more on technology to produce goods and reduce the number of employees.

Hence, he said, unemployment will increase and low-income earners who these populist policies are meant for, may actually end up losing, Kriengkrai said.

“Instead, the government could encourage private businesses to ‘pay by skill’, which will prevent layoffs and allow some workers to be paid well above the minimum wage,” Suphant suggested.

Bangkok Bank chief economist and strategist Burin Adulwattana added: “While hiking the minimum wage may not lead to inflation as some have speculated, it will lead to an economic slowdown as costs for local businesses will rise.”

He concurred with Kriengkrai in that a hike in minimum wage rate may result in workers being laid off, as businesses will try to cut costs by moving abroad or opt for automation to replace their workforce. THE NATION (THAILAND)

MOST VIEWED

  • Call for boycott of Angkor unacceptable

    Dear Editor, I wish to express my strong disagreement on the article published by Traveller for their website with the title Best places to go in 2020: 12 destinations you should avoid. Below is my opinion of the article. It is obviously free for the Traveller to

  • Probe underway after wreckage of drone with Chinese characters found

    Air Force Command spokesman Prak Sokha said on Sunday that investigations are underway regarding the wreckage of a drone that was recovered in Koh Kong province’s Koh Sdech commune in Kiri Sakor district. The wreckage has been taken to the capital for further examination,

  • Ministry issues warning over coronavirus outbreak

    The Ministry of Health on Wednesday asked the public to be on “high alert” as a new virus wreaks havoc across Asia. However, no cases have been reported in the Kingdom thus far. The 2019 Novel Coronavirus (2019-nCoV) has raised the alarm for its similarity to

  • Gov’t slams UN rapporteurs over Sokha trial statement

    The Ministry of Foreign Affairs and International Cooperation and the Permanent Mission of the Kingdom of Cambodia to the UN Office in Geneva deplored the statement of three UN special rapporteurs who claimed that Kem Sokha’s trial was “tainted” due to irregularities. The reaction

  • No power shortages next dry season, says energy minister

    Minister of Mines and Energy Suy Sem has assured the public that Cambodia will not suffer power shortages during the next dry season. Speaking on local TV on Tuesday, Sem projected a rise in power demand during 2020’s dry season – which starts in November and

  • Gov’t takes steps to lower logistics, transport costs

    With the threat of losing trade privileges in the EU drawing closer, the government is taking measures to reduce logistics and transportation costs to safeguard the Kingdom’s competitiveness. The EU is due to decide whether or not to withdraw the Kingdom’s trade privileges