Macroeconomics/minimum wages

Chatrudee Theparat

Inappropriate time to increase minimum wages

Think-tank agency warned it is inappropriate time to adjust minimum wages because it may cause too burden for entrepreneurs.

Secretary General to the National Economic and Social Development Council (NESDC) Danucha Pichayanan warned that it is inappropriate time to adjust minimum wages because it may cause too burden for entrepreneurs amid a reluctant of global economy.

National Economic and Social Development Council (NESDC) Danucha Pichayanan

“Increasing minimum wages among unskilled labour may cause entrepreneurs to replace robotics in their manufacturing in order to cut burden.”

The adjustment of minimum wages also would affect to government budget because the government agencies also need to adjust salaries among officials while the government was budget constraint caused by Covid-19.

He suggested that entrepreneurs should better increase wages to conform skills of labours.

The agency also reported Thailand’s social outlook of the third quarter that there were 39.6 million employed people, a 2.1% increase from the same period last year, owing to a 4.3% in non-farm employment, or 27.2 million.

Employment in the wholesale and retail sector, hotels and restaurants sector expanded by 4.5% and 8.3% respectively, as a result of expansion of tourism sector. The number of foreign arrivals in the third quarter increased significantly.

Manufacturing employment expanded by 1.4% as capacity utilization rate and exports expanded continuously.

Employment in the agricultural sector was 12.4 million, a decrease by 2.4% due to damages from flooding. Working- hours rose to nearly pre-pandemic level. Total working hours and working hours in the private sector were 42.5 hours/week and 46.7 hours/week, respectively.
There were 6.8 million who worked overtime and the number of workers who worked lass than 4 hours/day dropped to 1.9 million.

Mr Danucha said the unemployment situation showed improvement, the number of unemployment was 490,000 or dropping to 1.23%.

Unemployment rate in the formal sector dropped to 1.99%, unemployment fell among both the unemployed who had worked before and those who had never worked before.

The agency suggested measures to alleviate the cost of living for workers, particularly informal workers, from the contraction in real wages due to the effects of high inflation.

Workers in the formal sector, on the other hand, will be compensated by the increase in the minimum wages. Meanwhile, informed workers, especially those with less education, will suffer greatly if their wages are not raised.

The government should accelerate assisted measures for those affected by flooding, especially poor farmers. There were 59 provinces affected by the flood in the third quarter where there were total 8.3 million farmers, among of them these were 890,000 poor farmers, who may be hit worse than other groups.

The agency encouraged unemployed to participate in training and develop careers skills related to tourism industry.

According to Thai Hotels Association poll conducted in September 2022, 77% of hotel entrepreneurs still have workforce shortage.