BANGKOK, 25 January 2013 The University of the Thai Chamber of Commerce (UTCC) revealed that the 300 baht minimum wage policy would help trigger the country’s GDP by up to 1.4 percent.
UTCC Economic and Business Forecasting Center Director Thanawat Polvichai said the 300 baht wage scheme that took effect nationwide on January 1st would inject 150 billion baht into the Thai economic system, resulting in an increase of people’s purchasing power. He elaborated that the 7 pilot provinces that the wage policy has been pressed forward since April last year, would send over 80 billion baht into the labor market, while another 70 billion would be circulated in the rest of the country. As a result, the increased amount of money injected into the Thai economy will drive up the country’s GDP by 1-1.4 percent.
He said the daily wage adjustment does not just trigger the economy, but people can save up money and pay back their debts. However, he pointed out that the government should also increase the capability or potential of the labor in line with the wage adjustment, so that the SME segment can be more productive, which he said could prevent lay-offs or factory shut-down.
A UTCC survey shows that those companies affected by the wage rise are mostly small and medium sized enterprises, especially in the agricultural sector and labor-intensive service business. However, it is still too early to assess the production cost, employment and profit decline, and the number of factory shut-down for the moment.
