Implementation of the 300-baht Daily Minimum Wage Nationwide

(07/01/2013)

The Government believed that the implementation of the 300-baht daily minimum wage nationwide would increase labor quality and improve the living conditions of workers. The daily minimum wage was increased to 300 baht in the remaining 70 provinces on 1 January 2013, after having the policy in place since 1 April 2012 in seven pilot provinces, namely Bangkok, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon, Nakhon Pathom, and Phuket. Speaking in the weekly program “Yingluck Government Meets the People” on 5 January 2013, Labor Minister Phadermchai Sasomsub explained that the nationwide minimum wage hike to 300 baht would boost the purchasing power in the country. At the same time, workers would become happier, since they could opt to work near their hometown, instead of leaving their families to work elsewhere for higher wages. He said that it was too soon to assess the full impacts of the wage hike now. The Government would wait and see for a certain period, and it has also prepared measures to help businesses. He pointed out that the improved quality of labor after the wage hike would enable entrepreneurs to increase productivity. Mr. Phadermchai stated that the Government did not want to stick to low-cost labor, which would lead to a decline in the people’s purchasing power. He is also keeping a watch on the realization of the ASEAN Economic Community in the next two years, when all economic sectors will need to adjust themselves. He said that Thai labor must look into its weaknesses and rectify them, while promoting its strengths, so that both workers and employers could move forward together. Concerning the closure of Veena Garment Company in Saraburi province, which resulted in 287 workers losing their jobs, Mr. Phadermchai said that, in fact, the closure was not related to the 300-baht minimum wage policy. He was informed that the company was facing a loss of 10-17 million baht because of fewer orders from abroad for several years. Since it was operating in the red, it decided to stop operations. Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said that he was confident that most entrepreneurs would be able to adjust to the wage increase. He believed that the hike in the minimum wage would produce more positive results than negatives ones. More income earned by workers would increase the people’s purchasing power and business owners would have more customers. Mr. Kittiratt pointed out that labor-intensive industries were likely to be most affected. These industries might have to be relocated to countries with lower labor costs. Thai workers must be ready to enhance their skills for higher payment and better quality of life. He said that certain measures that have been implemented to help businesses, since the 300-baht minimum wage policy was first implemented in April 2012, would be extended. New measures would also be introduced and approved by the Cabinet this time.