Kalin Sarasin, centre, chairman of the Joint Standing Committee of Commerce, Industry and Banking with fellow JSCCIB members at a press conference where they pushed for the process of setting a minimum daily wage to be reopened.
Kalin Sarasin, centre, chairman of the Joint Standing Committee of Commerce, Industry and Banking with fellow JSCCIB members at a press conference where they pushed for the process of setting a minimum daily wage to be reopened.

Bosses call for U-turn on wage rises

Economy January 24, 2018 01:00

By The Nation

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THE NATION’S top private-sector advisory grouping has called on the government to go back to the drawing board on the recently announced rises in minimum daily wages that its members say do not reflect the different economic conditions across the country.

The request of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) to the government for the extent of the wage rises to be reconsidered follows a poll of its members that pointed to the finalised rates being higher than those proposed by provincial wage committees

Kalin Sarasin, chairman of the JSCCIB and chairman of the Thai Chamber of Commerce, said the JSCCIB yesterday wrote to Prime Minister Prayut Chan-o-cha, asking that the government revise the minimum daily wages decided by the Central Wages Committee. Instead, it should follow the decisions made by provincial wage committees in line with Section 87 of Labour Protection Act, BE 2541 (1998), the advisory grouping said .

 Section 87 sets out the factors that the wages committee should consider when setting the minimum wage rates.

The JSCCIB's member survey found that 92 per cent of operators in all provinces agreed that the rises announced for 2018 are higher than the rates that had been proposed by the provincial wage committees. This meant that small and medium-sized enterprises (SMEs) and farmers could be hit hard by the higher wages, which they say are not adequately based on economic conditions in each area of the country, the advisory grouping said.

 The provincial wage committees of 35 provinces, including Rayong, did not propose any wage increase. Despite their views, the minimum daily rate was raised by 7 per cent from Bt308 to Bt330.

On the other side of the pay debate, the State Enterprise Workers' Relations Confederation and the Thai Labour Solidarity Committee (TLSC) also wrote to Prayut seeking to have the wage rise imposed at the same rate nationwide.

According to Thanaporn Vichan, TLSC vice chairman, the letter to the Prime Minister also requested that the provincial wage committees be abolished in favour of a national wage committee, and that measures be launched to control product prices.

 Chalee Loysoong, TLSC vice chairman, pointed to a flawed system in the organisation of the provincial wage committees.

Provincial wage committees in some provinces do not have a representative from the employee side and, therefore, a proposed wage rise comes from the employer side only, he said.

He also argued for the addition of an academic director or another director of a similar background, such as a social economist, to the national wage committee. This would help to ensure all sides of the argument would be heard adequately.

Chalee added that among key concerns that are not acceptable to the labour side is a reduced contribution to the Social Security Fund.

The TLSC wants the Labour Minister or the Labour Department permanent-secretary to review the wage rise decision before forwarding it to the Cabinet meeting, he said, adding that the wage rise must take account of the actual situations that acceptable are to both employers and employees.

Prayut said the minimum daily wage had not been raised for three years and that this year's increases were not too high. Moreover, they could spur increased spending and strengthen the country’s economic structure.

“This is what we want to make everyone understand. If we want to use money, we have to find certain data of operators, workers and the government on how we can move ahead. Otherwise, everything will collapse," he said.

 According to Nattaporn Jatusripitak, a spokesman for the deputy prime minister, said Prayut had asked the Ministry of Commerce and related agencies to prevent impacts that may arise to people's costs of living. Previously, the ministry reported to the Cabinet that the recent wage rises have had only a minimal impact on product prices.

In response to the likely postponement of Thailand's general election, Kalin believed that business confidence would remain intact as the economy has started recovering in the wake of a start to projects under the government’s infrastructure investment plans. This reflected improved confidence in the investment climate and was helped by the government's focus on the grassroots economy.


“According to our interviews, foreign investors from several countries including the United States, the European Union, China and Japan, still need to invest in Thailand,” Kalin said. “This year we will celebrate the 185th anniversary of the Thailand-US relationship, which could encourage US investors to make more investments.”

 Chen Namchaisiri, chairman of the Federation of the Thai Industries, said that confidence would not be affected by any postponement in the election as such a decision would be based on reasonable grounds. “Now, any postponement of the general election is in the legal process and has not yet reached a certain solution,” Chen said.

 Foreign investors have not raised questions on the issue; instead, they have paid more attention to a draft bill on investment in the Eastern Economic Corridor (EEC).

Poj Aramwattananont, vice chairman of the Thai Chamber of Commerce, said that everything was still in accordance with the government’s road map to democracy and that the possible postponement of the general election could arise as the outcome of legal processes. The economy can move forward regardless, Poj said.

Over the past four years, Thailand has confronted worse political situations and remained resilient and, this time, the country would again manage, he said.

 In regard to the overall economy, Prayut said the government has a plan to solve the problem of poverty in the country, and related agencies, including the Bank of Thailand, have been monitoring the economic conditions and the baht’s movements.