State pay, minimum wage tipped to rise

Rungson Sriworasart, deputy comptroller-general at the finance ministry, said his department was preparing options for increasing salaries of permanent government employees.

The raise is expected to take effect from October instead of April next year as planned earlier, he said.

Rungson's comments came after Deputy Finance Minister Ranongrak Suwanchawee had pledged that government employees would be given a pay raise to cope with the rising cost of living.

The Finance Ministry also plans to raise the salary of 2.7 million state officials after the previous Surayud government granted a 4-per-cent raise last October.

State-enterprise employees also got a 4-per-cent wage hike last year.

Meanwhile, blue-collar workers are negotiating with the government and their employers to raise the minimum wage by about 5 per cent next month.

Narong Phetprasert, an economist at Chulalongkorn University, said raising the minimum wage has become necessary as fuel and food prices are rising fast.

Inflation is expected to be about 5 to 6 per cent this year. An average 5-per-cent rise in the minimum wage would just maintain the workers' purchasing power.

"I actually want to see the minimum wage go up by about Bt10 or Bt11 instead of Bt9, for workers in Greater Bangkok as demanded by trade unions," Narong said.

He said the government and employers might allow a minimum wage increase of only Bt7 for workers in Greater Bangkok.

It would be unfair for blue-collar workers if the government increased state salaries by 20 per cent as suggested, Narong said.

If the government wanted to increase domestic consumption while the export sector was weakening, the minimum wage increase should be much higher, Narong said.

Wages account for only a fraction of the production cost in manufacturing sectors, added Narong.

The Bank of Thailand has forecast that headline inflation will be 4 or 5 per cent this year, from 2.3 per cent last year. The central bank's assumption is based on a minimum wage of Bt194 a day in Greater Bangkok.

The BoT's forecast includes a 4-per-cent minimum wage rise for next year and inflation in the range of 2.8-4.3 per cent.

by Wichit Chaitrong

The Nation