Phuket industry chiefs say minimum wage hike impact negligible

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PHUKET: Leading figures in key Phuket industries have played down the impact of the impending rise in the minimum wage, which is expected to be approved by Cabinet imminently and brought into effect in April.


The national wage committee with the authority to approve minimum daily wage hikes agreed last Wednesday night (Jan 17) to an increase in the minimum wage after several rounds of talks between representatives of employers, workers and government officials in the tripartite panel.

The wage will climb from April by between B5 and B22 per day, depending on location, explained Permanent Secretary for Labour Jarin Jakkaphark, who chaired the committee.

The revised daily range of B308 to B330 is about 2% to 7% higher than current levels.

“Wages have to rise with economic conditions – the cost of living and economic growth in each province,” Mr Jarin told the Bangkok Post.

The minimum daily minimum wage is currently B300 in eight provinces, and ranges from B305 to B310 in others. This year’s increase will be the first in three years.

In Phuket the current minimum wage will rise from the current B308 per day to B330.

“This will not have a big effect on medium to large developers in Phuket,” Watchara Jaruariyanon, CEO of Vasi Co Ltd and a key figure in the Phuket’s construction industry, told The Phuket News.

“It will affect medium to large construction projects by at least 3%, but smaller contractors will feel the effects more with prices for such projects to increase by about 5%,” he said.

Mr Watchara noted that Phuket is already among the provinces paying the highest minimum wage rates in the country – alongside Chonburi and Rayong – and that will not change.

Of note, under proposed minimum wage hike, the base wage rate in Phang Nga and Krabi provinces will rise to B320 per day.

However, Mr Watchara noted, “Phuket’s minimum wage at B330 per day will be more expensive than in any other Southeast Asian country [Note: there is no minimum wage in Singapore – Ed]. So, this will not change for any investors in the construction industry.

“We will still be stable on this issue, but I do worry about the prices of construction materials. The government should look into these prices. They must not raise costs overall, otherwise small contractors will be greatly affected,” he added.

Somyos Wongboonyakul, President of the Phuket Fishery Association, was full of derision for the concept of a minimum wage in Phuket.

“It is bulls**t, they [the government] never look at the reality here. Look up the cost of living in Phuket,” he said.

“We have moved so far from the original standard of B9,900 per month. The real minimum wage for any people in the fishing industry in Phuket is B11,000 per month – regardless if they are Thai, Burmese or Cambodian.

“This, the minimum wage, will not affect seafood prices in Phuket. What does affect the prices is how market vendors and other sellers mark up their margins on seafood here,” Mr Somyos added.

Meanwhile, Khattiya Pendach, Chief of the Phuket Employment Office (PEO), declined to comment on any potential impact the minimum wage hike will have for people who rely on the services from his office.

“I don’t want to give any comment until this is approved,” he said.

Courtesy: Published at The Phuket News on January 28, 2018 by Tanyaluk Sakoot

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