11 July 2024

The Federation of Thai Industries (FTI) has warned that more factories in Thailand could be expected to close this year if the government presses ahead with a standard Bt400 minimum wage across the country by October 1.

Isares Rattanadilok Na Phuket, vice president of the FTI, disclosed that over 360 factories, with total investments estimated at more than 9 billion baht, have closed down since the beginning of this year, resulting in more than 10,000 job losses.

He warned that the number of closures may rise by another 700 by the end of this year if the government presses ahead the Bt400 national minimum wage.

He attributed the closures so far to the economic slowdown, forcing employers to make adjustments, including laying off staff or to shutting down their operations, adding that the government has not been earnestly supportive of the industrial sector, citing the high fuel and energy costs and interest rate.

The FTI vice president urged the government to accelerate the introduction of short-term economic stimulus packages to stimulate consumer spending, to streamline regulations to support the production sector and to prevent the dumping of sub-standard imported products.

Meanwhile, Mongkol Traipan, president of the Federation of Eastern Region Labour, said that, in the past several years, factories in the eastern region have laid off permanent employees and have turned to hiring sub-contract employees to cut costs.

He explained that this saves the businesses from the burden of providing welfare benefits to the employees, who normally do not have any bargaining power with their employers. These employees can be laid off at any time, he added.

The Bt400 minimum wage has been in force since April 13th in four-star hotels, which have more than 50 employees each, in 10 pilot provinces.

If the Bt400 wage is enforced across the country, on businesses which hire more than 50 employees each, about 4 million employees will benefit, accounting for 35% of the labour force in Thailand.

Since the beginning of this year, various minimum wages, ranging from 330 baht to Bt370, have been applied, in accordance with economic situations in each province.

Story : Agence France Presse//Photo : Reuters