Labour Minister Phiphat Ratchakitprakarn is determined to raise the daily minimum wage to 400 baht nationwide starting on October 1, despite concerns from businesses about potential negative impacts. On Sunday, Mr. Phiphat confirmed that after discussions with business operators and a study conducted by a subcommittee of the Ministry of Labour, the wage hike will proceed as scheduled.
“We are aware of the economic slowdown, which is why I’ve instructed the permanent secretary of Labour, Phairoj Chotikasatien, to approach the issue using the most thorough analysis,” Mr. Phiphat said.
A study conducted with the Social Security Office (SSO) recommended that the wage increase apply primarily to companies or factories with 200 or more employees. This proposal will be reviewed by the National Economic and Social Development Board and the Ministry of Finance.
To support larger businesses, the SSO plans to offer a 1% discount on contributions to the Social Security Fund (SSF) for companies with over 200 workers, starting next month and running through September 2025.
Small and medium-sized enterprises (SMEs) with fewer than 200 employees will not be obligated to raise wages, but Mr. Phiphat stressed the importance of supporting these businesses, which make up over 90% of the workforce, until the economy improves.
He expressed confidence in the new government under Prime Minister Paetongtarn Shinawatra, describing her as a new-generation leader capable of revitalizing the economy.
Mr. Phiphat also revealed that the Labour Ministry will request the Finance Ministry to reintroduce compensatory measures similar to those implemented in 2012 when the minimum wage was increased to 300 baht under former Prime Minister Yingluck Shinawatra. Additionally, he suggested seeking cooperation from financial institutions to offer low-interest loans to help companies maintain liquidity following the wage increase.
Tax incentives for businesses providing career training to workers are also being considered.
Sanga Ruangwattanakul, president of the Khao San Road Business Association, voiced concerns about the wage hike, citing possible consequences such as slower employment growth, layoffs, and rising operational costs. He urged the government to support the private sector through tax breaks and exemptions until the economy recovers.
Mr. Sanga emphasized that instead of cash handouts, the government should focus on increasing job opportunities and improving worker skills to achieve long-term economic sustainability.
