PATTAYA, Thailand – Chonburi entrepreneurs unanimously oppose the policy to increase the minimum wage nationwide to 400 baht, predicting a wave of business closures and foreign companies relocating their production back home. They suggest a better solution would be to reduce utility costs, such as electricity, fuel, and water, to alleviate the cost of living for citizens instead of forcing businesses to raise wages when they are not ready.
Following the government’s announcement of a policy intended as a Labour Day gift to workers nationwide, raising the minimum wage to 400 baht across the country despite the severe economic downturn, producers have already begun to raise prices in response.
On July 9, Kittiwut Sasiwimolphan, President of the Chonburi Federation of Industries, explained the opposition to the government’s minimum wage increase policy. He stated that fair wage adjustments should follow the tripartite mechanism specific to each province, involving discussions between employers, employees, and government representatives as mediators. The Chonburi Federation of Industries supports wage increases based on workers’ skills, but a uniform increase across all provinces is seen as counterproductive. He emphasized that the private sector, which drives labour use in business, should have a say in such policies.
“In reality, wage adjustments should be based on skill levels. Workers in factories should earn more than those in agriculture or non-skilled sectors. Chonburi has diverse businesses, not just in industry but also in commerce, tourism, and agriculture. In Pattaya’s tourism sector, four-star hotels already pay 400 baht per day. Therefore, a uniform wage increase is inappropriate because each area has different contexts,” said Kittiwut.
Thanet Supasahasrungsi, President of the Chonburi Tourism Federation, expressed similar concerns. He said a nationwide 400 baht wage increase would affect Pattaya’s hotel operators, especially the many three-star hotels and below. Post-COVID-19, tourists’ travel patterns have shifted from group tours to individual travel, favouring city hotels over rural ones. Chinese and Vietnamese tour groups have not returned. Thus, this policy would certainly impact small hotel operators, while large hotels, unaffected, can pay staff 20,000-30,000 baht per month through service charges. Many small hotels haven’t even reopened due to the current economic conditions.
Sunee Phutivanich, President of the Laem Chabang Chonburi Transport Association, noted that the transport sector isn’t directly affected by the government’s policy due to income guarantees of at least 20,000 baht per month for staff. However, she expressed concern about the overall economic growth. Earlier this year, the government had already raised fuel prices, a major cost. An additional wage increase would further impact the cost of living for employees not benefiting from the wage hike but facing higher prices.
Visut Isaraphanpithiset, President of the Federation of Thai SME Entrepreneurs in Chonburi, highlighted the significant impact on SMEs from previous wage increases. Many SME workers are unskilled, and discussions with several Japanese factories reveal plans to relocate production back to Japan due to the weak yen and rising Thai labour costs. “The government’s plan to increase wages again has led many factories to consider moving some production lines back to Japan, using robots instead of human labour,” Visut said.
Krit Jiramongkol, President of the Chonburi Tourism Industry Council, reflected on future problems from increased costs for restaurant and tourism-related businesses, not just in Pattaya or Chonburi but nationwide, leading to more business closures and higher unemployment.
Sakda Wankaew, Director of the Eastern Region Office of the Thai Employers Council, suggested that the government should focus on reducing expenses for the public to help with the rising cost of living rather than imposing policies that increase costs for businesses. He proposed measures such as lowering loan interest rates for homebuyers, reducing prices of state-controlled consumer goods, and decreasing utility and fuel costs to help citizens. “Such measures would help slow down expenses for workers, students, and informal labourers, who are significantly affected by the minimum wage increase to 400 baht. These groups will not benefit from the wage increase but will face higher living costs,” said Sakda.
