Thai retailers association tallies cost of minimum daily wage increases

Economy January 26, 2018 19:28

By The Nation

The Thai Retailers Association (TRA) says the government’s proposed increase in the minimum wage – applied in a range that differs by area – will increase the cost burden of businesses.



 

The government had announced its backing for an increase in the minimum wage to Bt308 to Bt330 a day, for an average of Bt315.97. In 2017 the range had been Bt300 to Bt310, for an average of Bt305.44. 

The TRA says the average increase of 2.6 per cent will increase costs for retailers by 1.68 to 2.25 per cent.

TRA president Jariya Chirathivat said that the 2018 rate was unequal in different regions of the country, with provinces grouped in seven levels, rather than the four levels of previous years. Jariya said the 2.6 per cent average increase has had four major impacts:

 Labour shortages in the Bangkok area, as most workers have returned to their home towns.

 An increased hourly rate, with the costs of part time staff working for four hours increasing from Bt77 to Bt82.50 per hour, as the minimum wage law specifies a minimum daily rate, and that a part-time shift of just four hours is counted as a full day.

 Increased costs on top of wages, such as various employer contributions including social security, compensation funds, mutual funds, and disability funds.

 Impacts on the entire structure of the labour market, both in terms of increasing wages up the scale, which despite being more than the minimum wage, need to be likewise increased to maintain pay differentials, and increasing the wages of skilled labour in the same way.