Thailand approves first wage hike since 2020 as inflation spikes
THAILAND’S minimum wage, frozen since January 2020, is set to rise by an average 5 per cent from Oct 1 to help workers cope with inflation that hovers near a 14-year high.
The new rates, ranging from 328 baht (S$12.65) to 354 baht per day, will be divided into 9 groups of provinces, depending on their economic condition, according to Boonchob Suttamanaswong, the Ministry of Labor’s permanent-secretary. A committee of representatives from the government, employers and labour unions unanimously agreed on the hike after a long discussion on Friday (Aug 26).
The plan, which must get a final nod from the Cabinet next week, comes as headline inflation stood at 7.61 per cent in July. The Bank of Thailand expects the pace of consumer-price increases to peak in the third quarter and ease back into its 1 per cent-3 per cent target next year as commodity prices cool.
“We consider the wage increase based on 5.5 per cent-6.5 per cent inflation forecast,” Boonchob said. “Employee representatives sought a hike of 8 per cent to 10 per cent, but they finally agreed to compromise.”
Even with some salaries going up, many Thais will find their pay increases eaten up by the cost of goods they buy. Earlier this week the government gave the green light to instant noodle makers to raise retail prices for the first time in 14 years, yielding to demands from local producers battling a surge in raw-material expenses.
Instant noodles have long been a staple for low-income households and are among Thailand’s controlled goods because of their importance in the nation of about 70 million. Three producers have been permitted to rise the price of a basic pack by up to 1 baht, from the current 6 baht – a 17 per cent price hike.
Thailand’s last minimum-wage increase was in January 2020, with daily rates ranging from 313 baht to 336 baht across the country’s 77 provinces, according to Ministry of Labor’s website. BLOOMBERG
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