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Economists: Wage hike ‘more good than bad’, but get ready

Business owners should adjust themselves and support the new government’s plan to increase the daily minimum wage, say economists from the Panyapiwat Institute of Technology and the Thailand Development Research Institute (TDRI).

Sompop Manarungsan, the Panyapiwat president, expects more good than bad from the increase, as it will help stimulate domestic consumption. This will also make the country less reliant on exports since the US and Europe are still experiencing economic problems.

“The wage increase will go smoothly so long as the government has in-depth data showing the effects,” said Dr Sompop.

He suggested the government focus on three economic measures – enhance the service sector, drive agricultural growth with a clear direction, and build better relations with neighbouring countries.

Thailand should have both plantation areas and production bases in these nations.

Yongyuth Cha- Chalamwong, the research director for human resources and social development with the TDRI, agreed the wage structure should be revised. Thailand’s competitiveness may decline in the short term but then improve in the medium term after the private sector adjusts to it, he said.

“It’s time to enhance worker quality to support labour market demand. We should enhance their core skills,” said Dr Yongyuth.

He said higher wages would improve workers’ living conditions, help to reduce the wealth gap in society and reflect labour productivity.

Acknowledging that minimum wage increases always lift product prices, Dr Yongyuth said the impact would be limited this time as long as measures are implemented to improve productivity and address price hikes.

Other suggestions included a government fund to provide financial support to small and medium enterprises.

Korsak Chairasmisak, the chief executive of CP All Plc, the operator of the world’s third largest 7-Eleven convenience store chain, said his company was ready to follow the new wage policy but suggested a gradual hike over a one-off rise.

“This will affect us, but it’s a fact that we must live with. We believe we can maintain our profits thanks to efficient management,” he said.

CP All is now streamlining its operations, with the aim of shortening all work systems.

At least 100 million baht will be spent on new technology to improve efficiency, while the number of back-office staff will be reduced by 40% to 600.

Source: Bangkok Post

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The Thaivest Editorial Team is a dedicated group of writers and editors with a passion for Thailand's vibrant economy, culture, and lifestyle. With diverse backgrounds in finance, economics, and journalism, we provide valuable insights into living well in Thailand, making money online, and practical tools for navigating its dynamic market. Our mission is to keep our readers informed about the latest developments, opportunities, and challenges in Thailand's economic and cultural landscape. Stay connected with Thaivest for reliable, well-rounded coverage of all things Thai.

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