300-Baht Daily Minimum Wage

(04/04/2012)

Permanent Secretary for Labor Somkiat Chayasriwong said that the 300-baht daily minimum wage would contribute to the Thai economy in the long run. He referred to the implementation of the minimum wage increase that took effect across Thailand on 1 April 2012. The resolution was made by the Cabinet in November 2011, following the decision by the Wage Committee on 17 October 2011. Based on this policy, starting from 1 April 2012, the 300-baht daily minimum wage has been implemented in seven provinces, namely Bangkok, Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon, Nakhon Pathom, and Phuket. The rate in Phuket has increased by 35.7 percent from 221 baht to 300 baht, while that in six other provinces has increased by 39.5 percent, from 221 baht to 300 baht. In the remaining 70 provinces, the daily minimum wage has increased by 39.5 percent, but is still lower than 300 baht. The 300-baht rate will become effective in the other 70 provinces on 1 January 2013. According to the Cabinet resolution, the 300-baht daily minimum wage would remain in all provinces nationwide in 2014 and 2015. If the Thai economy faces severe volatility affecting the livelihoods of workers, the Wage Committee may consider revising the minimum wage in 2014 and 2015. In making a decision on the wage hike, the Wage Committee has taken into account factors like the cost of living index, inflation, living standards, manufacturing costs, and general economic and social conditions. Emphasis is also placed on the employers’ ability to pay and the workers’ quality of life. The Permanent Secretary for Labor, who is also Chairman of the Wage Committee, stated that the minimum wage hike in April this year would increase the purchasing power of the general public and help workers cope with rising costs of living. He believed that the hike in the minimum rate would produce more positive results than negatives ones. More income earned by workers would facilitate the buying and selling of consumer goods, as well. Some businesses criticized the implementation of the 300-baht minimum wage, saying that it would adversely affect small and medium-sized enterprises. In this regard, the Permanent Secretary for Labor said that the impact might be felt in certain businesses, but it was likely to last only in the short term. Entrepreneurs wishing to seek advice on the issue may contact provincial labor offices nationwide. In order to help businesses cope with rising production costs, the Government earlier approved the reduction of corporate income tax from 30 percent to 23 percent in 2012.