Employers affected by wage hike in Thailand

BANGKOK, November 30 (TNA) - The Thai government's new wage hike policy, under which workers in all areas across the country are to receive their daily minimum wage of 300 baht equally, effectively from January 1, 2013, appears to affect several employers, at least in the initial period. In Thailand's northeastern Chaiyaphum province, for instance, several textile plants are either planning to shut down, or relocate to neighbouring countries after the enforcement of the 300-baht daily minimum wage policy. Theeravara Vitnakorn, Chief Executive Officer (CEO) of Hi-Tech Chaiyaphum Apparel Co., Ltd., acknowledged today, in his capacity as Chairman of Chaiyaphum's Textile Industry, that the Thai government's daily minimum wage hike policy appears to definitely affect his province's textile industry. Theeravara assessed that some of local textile manufacturers would have to close down their businesses; while many others would relocate their production bases to neighbouring countries in which wage costs are cheaper, namely Cambodia, Laos, Vietnam and Indonesia. Theeravara noted that several small textile factories in Chaiyaphum have already closed down; while many others plan to reduce the number of their employees. Chaiyaphum is considered a pilot province in the production and exports of Thai textile products. Presently, there are more than 40 textile plants in the northeastern Thai province with their combined investment fund of about 20 billion baht and about 20,000 workers employed earning a daily minimum wage of 165 baht each. According to the CEO, the 300-daily minimum wage will push up production costs of local textile plants by almost double; while assistance measures offering by the government, including a cut in taxes, appear not to benefit the provincial operators, as Chaiyaphum is regarded as a special promotional zone and has already received several incentives. Meanwhile, Jirasak Sukontachart, Secretary-General of the Ministry of Labour's Social Security Office or SSO, said that his office has extended a reduction of monthly social security fund contributions by each employee and employer by another year, from 5 per cent to 4 per cent, in order to assist entrepreneurs affected by the daily minimum wage hike. (TNA)