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Bangkok Post
Bangkok Post
National

Wage hikes make little impact: expert

Minimum wage rises have failed to keep up with GDP growth with workers on the lowest rung in society receiving only a 15-baht hike in the daily wage in the last 10 years, according to a Thammasat University economist.

This may provide some financial relief for some workers, but it is far from enough, according to Kiriya Kulkolkarn, an associate professor at Thammasat University's Faculty of Economics.

Low-income earners are more vulnerable to the impact of inflation than higher-income workers.

Last month, the national wage committee finalised hikes in the daily minimum wage by an average of 5.02% and the new rates, which include a hike of 22 baht in Bangkok and its surrounding provinces, are expected to take effect next month.

Boonchob Suthamanaswong, permanent secretary for labour, said earlier that a tripartite panel reviewing hikes in the minimum daily wage agreed to bump them up to between 328 baht and 354 baht, which varies from province to province.

Yesterday, Ms Kiriya noted the new rates were helpful to daily wage earners to a certain extent, but they still fall short since inflation is soaring at 7%.

She said the poor spend 45% of their income on food while food bills for the richer amount to 27% of income. It goes to show high inflation hits the poor harder than those who earn more.

In the last 10 years, the poor have seen their daily wage rise by an average of 15 baht, barely pushing up from 318 baht on average to 333 baht.

"If you multiply that by the number of days in a month they are paid and by 12 months, their wage hike comes down to 3,960 baht a year or a 4.7% increase.

"But the country's Gross Domestic Product (GDP) over the past 10 years has grown 20%, outstripping low-income workers' wage rises," the economist said, adding the figures reflect discrepancies and the hard life many of the poorest low-income workers are facing.

Ms Kiriya said the 5% wage increase would not do much to exacerbate inflation since there are other factors involved.

In reality, workers should get paid more than the daily wage rates set by the government, which are not enough to sustain a decent livelihood, she said.

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