Hefty wage increases promised by the winners of the general election would hurt businesses, jobs and competitiveness, the Federation of Thai Industries (FTI) warned on Tuesday.
The Move Forward and Pheu Thai parties, which agreed on Monday to form a ruling coalition after they trounced military-backed rivals, have both promised substantial increases in the minimum wage.
Move Forward has promised to raise the daily minimum wage to 450 baht, with annual revisions, from an average 337 baht now, while Pheu Thai has pledged to increase it to 600 baht by 2027.
The FTI said that while it did not object to higher wages, the government should set them based on skills and productivity.
“It’s our main concern. Every time wages are raised, Thailand’s competitiveness falls and FDI drops,” FTI vice chairman Montri Mahaplerkpong told a press conference, referring to foreign direct investment.
Wiwat Hemmondharop, another FTI vice-chairman, said the country should adopt average wages, not minimum wages, to help businesses adjust.
“If wages rise a lot, small businesses will die first,” he said.
“A fast, big jump in wages without looking at the business structure will make people lose their jobs.”
The federation said a new government should be set up quickly to tackle economic challenges as global growth has slowed.
The FTI’s industrial sentiment index in April dropped for the first time in four months to 95.0 from 97.8 in March, dented by weak global demand, higher production costs and currency volatility.
