Thai industries suggest measures to cut living costs, warns against wage hike

The lack of a free-market mechanism in Thailand leads to higher prices for public utilities, according to the Federation of Thai Industries.

The Nation

The Nation



June 1, 2023

BANGKOKMonopolies and corruption are driving the high cost of living in Thailand, according to the Federation of Thai Industries (FTI).

The main underlying causes of soaring expenses for everyday needs – such as water/electricity, food, transport and internet – are the monopolistic business environment and state concessions granted to only a few big corporations, FTI vice chairman Isares Rattanadilok na Phuket said.

The lack of a free-market mechanism leads to higher prices for public utilities relative to most Asean countries.

Corruption in the corporate sector is another main contributor to the high cost of living, he added.

These two factors widen the income disparity between the rich and the poor in Thai society.

Isares said that to alleviate the high cost of living, the incoming government should make following issues national priorities:

1. Address monopoly control

2. Address the issue of corporate corruption

3. Promote state welfare policies

He suggested the following measures to reduce living costs:

– Restore the 30-baht medical scheme to cover all illnesses

– 20 baht flat rate for public transport

– Free internet

– Affordable prices for essential food and consumer goods

Implementing all these measures would cut the cost of living and burdens on the labour force, he said.

However, raising the minimum wage would do more damage than good, he warned. Move Forward Party aims to raise the daily minimum wage to 450 baht if it succeeds in forming a coalition government.

Isares said the minimum wage should not be used as a tool for political gain, as this will damage the economy, particularly small and medium-sized enterprises (SMEs) by forcing closures or downsizing to reduce labour costs.

He also warned that a wage hike could see foreign investment flee Thailand in search of lower labour costs.

He said the business sector is willing to pay wages based on skills and productivity. As such, the government and private sector must urgently upgrade work skills to ensure the Thai workforce is competitive, meets business demands, and receives fair wages according to skill levels. This would also boost Thailand’s competitiveness in the global market, he said.

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