An academic with Srinakharinwirot University (SWU) welcomed the proposal in broad terms as beneficial to newly graduated students taking up employment but expressed his concern about the danger of stoking inflation and called for a policy also over the course of the next government, to control the cost of living.
The Pheu Thai party began this week to set out its stall for the 2023 General Election with a promise of a ฿600 a day minimum wage for all Thai workers by 2027 and a minimum monthly salary of ฿25,000 for graduates with a bachelor’s degree. Within hours, the proposal was attacked by government parties and in particular the Minister of Labour, Suchart Chomklin who described it as a bomb being thrown at businesses in Thailand just in the middle of an as yet fragile economic recovery. However, the plan has drawn support from a key labour rights activist who praised the policy as both beneficial and credible while lashing out at the Palang Pracharat Party-led government. On Thursday, Minister Suchart also faced a strong attack from Pheu Thai Party spokeswoman, Treechada Srithada who hit out at the minister’s lack of understanding for those suffering under current economic conditions.
A week after the Constitutional Court gave it an advantage in the next General Election by approving the new two-ballot voting process and a party list calculation dividing the number of party list votes by the 100 seats on offer, the Pheu Thai Party, on Wednesday, scored another goal when it set the economic agenda for next year’s General Election.
The state of the economy and the performance of the Palang Pracharat Party-led government since 2019 is generally seen as an election weakness for the government and associated parties including the Bhumjaithai Party and Democrat Party.
New eye-catching proposal announced by Ung Ing or Paetongtarn Shinawatra on Wednesday in a broad brush view of Pheu Thai’s economic policy platform
Paetongtarn Shinawatra, the daughter of former premier Thaksin Shinawatra, Chairman of the Participation and Innovation Advisory Committee and the head of the Pheu Thai family, along with policy committee advisors, presented a proposal to increase the minimum wage in Thailand to ฿600 per day by 2027 if Pheu Thai forms the next government.
The proposal was part of a broad brush picture of economic plans to be implemented by a Pheu Thai-led government if elected in 2023.
The current minimum wage which came into effect on October 1st with a modest 5.12% rise, varies from ฿354 in places such as Rayong and Chonburi to ฿328 per day in Udon Thani.
The rate depends on where you live in Thailand.
She told reporters at a press conference, in a style reminiscent of her father Mr Thaksin, that to be a successful capitalist you had to have a big heart and that Thailand must simply ‘Think Big and Do it’.
The current plan would also, at the same time, increase the minimum wage for university graduates with a Bachelor’s degree to a minimum of ฿25,000 per annum.
Response to Labour Minister’s attack on the plan as a bomb being thrown at businesses at this time highlights stronger growth and business tax breaks
On Thursday, Ms Paetongtarn or Ung Ing clarified her statement following trenchant criticism from government spokespeople including the Minister of Labour, Suchart Chomklin, who described the plan as akin to throwing a bomb towards business at this time when the economic recovery is still fragile with many analysts forecasting a patchy period in 2023 including a prediction from KKP Research, the research arm of Kiatnakin Phatra Bank in Bangkok, just last week, that Thailand will encounter a mini-recession of two-quarters of negative GDP in 2023 with subdued exports and a lower number of foreign tourists after the current high season winds down at the end of March 2023.
Ms Paetongtarn highlights that the party’s proposal was a real one and was dependent on a stronger economic performance with Pheu Thai at the helm including plans for greater government borrowing above the current ceiling of 70% of GDP with tax breaks for business and industry.
Public debt as a percentage of GDP at the end of September stood at only 60.4% with concern that tax revenues dipped by over 4% in the last quarter of Thailand’s financial year to that point.
10-point plan over a four-year period to 2027 which will see higher borrowing, higher pay and higher growth at 5% per annum presented by policy team
The Pheu Thai proposals unveiled on Wednesday afternoon as part of a 10-point economic plan were also seen as being brought to fruition over four years of the next government and not from day one, she explained.
Ms Paetongtarn pointed to the lack of growth in the minimum wage since the 2014 coup in Thailand.
‘We have to think big, do it for all Thais,’ she declared. She said that by incremental or small thinking, the problems of the country cannot be solved and will be with it forever.
The daughter of the former premier Thaksin Shinawatra who now lives in exile in Dubai after being ousted by a 2006 coup, was adamant that the Thai economy had failed to live up to its potential in the 8 years since the 2014 coup which ousted the remnants of the government of her aunt and her father’s younger sister, Yingluck Shinawatra.
Ms Paetongtarn said it was little wonder that skilled and highly educated young Thai workers were currently leaving the country.
Plans to increase the country’s debt to GDP ceiling already expanded this year by the government from 60% to 70% as a means to kickstart economic growth
The proposal was also expanded upon by Dr Prommin Lertsuridej, the Chairman of the Pheu Thai Party policy committee who pointed out that with subdued growth, the government in 2022 collects less tax.
He confirmed that the party proposed expanding the current government debt ceiling raised in the last year by the current government from 60% to 70% of GDP, even higher to kick start its new economic policy which will prioritise growth.
Dr Prommin underlined that the plan would only be introduced in stages without causing a shock to the business sector and industry, particularly the more vulnerable small business sector.
He said that any responsible government must recognise the relationship between employer and employee while also tending to the bigger picture.
He said there was also a relationship between the government and business enterprises.
He pointed out that the Pheu Thai Party and its predecessors had a history of creating a strong economy and that this new proposal was not simply sweet words.
Plan proposed by rational people in a party that, along with its predecessors, has a record of getting things done. More money flow in the economy
He characterised the Pheu Thai Party economic team and leadership as rational people and highlighted that the new policy would also come with incentives for employers including reduced corporate taxes.
The press also heard from Mr Phaophum Rodjanasakul who described the proposed ฿600 minimum wage at the end of four years as comprised of three components.
The first was GDP growth of 5% per annum which the party was confident it could deliver, more GDP generated by more workers’ pay and more productive workers within the economy and inflation which is predicted to remain at an elevated level.
Mr Phaophum said that the Pheu Thai Party’s plan to raise the minimum wage for graduates and workers was predicated on a faster movement of money flowing through the economy in a similar way to what was achieved by the government of Thaksin Shinawatra from 2001 to 2005.
Ung Ing says that Pheu Thai is not interested in a war of words and fighting with other parties in next year’s General Election, it is proposing solutions
At the policy announcement press conference, Ms Paetongtarn Shinawatra emphasised that her party was not interested, in the course of the forthcoming election, in fighting a war of words with other parties or attacking the government of General Prayut Chan ocha or the former army chief himself.
She said General Prayut had been in power for quite some time and the people knew him well and would make up their own minds.
Her duty and that of her party now was to present policies to the people that will end the current suffering in the country.
‘Today Ing is responsible for proposing the vision of the Pheu Thai Party. How do we have a policy to help the people out of the suffering they are facing? Our duty is to say that people still have hope because Pheu Thai has worked hard to find information and serious ways to solve problems for the people. That is Ing’s duty,’ Ms Paetongtarn explained.
Pheu Thai spokeswoman excoriates Labour Minister
On Thursday, a spokesperson for the Pheu Thai Party excoriated the Minister of Labour Suchart Chomklin for his rejection of the party’s proposal describing it as a bomb being thrown at the business sector.
Ms Treechada Srithada said it appears that the minister did not fully appreciate the suffering of labouring Thai brothers and sisters.
She said that with the current high cost of living, the minimum wage which had only increased marginally over the last decade was simply not enough to live on.
Ms Treechada reminded the minister that currently, 1.93% of workers cannot find employment, that is 700,000 people.
She disclosed that even people working in Thailand were living at a loss and within an endless cycle of extreme poverty.
She expressed amazement that the Minister of Labour, Mr Suchart who had been in the job for more than two years did not fully appreciate this.
She asked the minister if it was not reasonable for families who had a child who attained a bachelor’s degree to expect a salary level of ฿25,000 over the next four years? She pointed out that young people, increasingly in Thailand, express a preference for leaving the country.
Record of Pheu Thai and parties before it contrasts sharply with Mr Suchart’s Palang Pracharat Party
She highlighted that the proposed raise to be attained in the minimum wage by 2027 was part of a plan to stimulate the economy at the same time.
She also referred to the Pheu Thai Party’s track record in government as well as that of the Thai Rak Thai Party and the People’s Power Party.
She said that the record of these parties in government contrasted sharply with the Palang Pracharat Party which Mr Suchart was associated with.
She pointed out that in the 2019 election, the party had campaigned on a minimum wage of ฿425 per day and a minimum salary for graduates with a bachelor’s degree of ฿20,000 per month.
She said that the real danger, at this point, would be to continue the current government’s policies which had brought economic ruin since 2019 with a catalogue of other chronic problems.
She described the current government and the Palang Pracharat Party as being unable to achieve anything.
‘The real economic catastrophe is now evident. Household debt has hit the highest level. Public debt that goes beyond the ceiling. Economic growth plummeted. The corruption index as reported by international organisations hits embarrassing highs and the policy campaign promises that the Palang Pracharat Party had made, the minimum wage was supposed to be ฿425, and the salary of a bachelor’s degree ฿20,000. You can’t do anything. This is the real disaster that is happening right now. The next Thai government must come and salvage this ruin. Mr Suchart had to study and find more information on this. For the Minister of Labour to suggest it is a problem to adjust wages for Thai workers higher, it is the strangest thing I have ever heard,’ Ms Treechada declared.
Labour activist Thanaporn Wichan warmly and enthusiastically welcomed the Pheu Thai Party minimum wage proposal saying it is credible
The new policy of a ฿600 per day minimum wage by 2027 was supported enthusiastically, on Thursday, by labour activist Ms Thanaporn Wichan of the Labour Network for People’s Rights who was quick to point out that not even the Move Forward Party had made such a proposal at this time.
Ms Thanaporn was involved in a recent study that showed that the average Thai worker needed a minimum wage of ฿720 a day to make ends meet but appeared impressed by the Pheu Thai Party policy saying that over 4 years to 2027, it only represented a hike of ฿65 a year.
She described it as a policy which the people could believe in.
‘In fact, the wages of workers have been depressed for many years. With the government of General Prayut Chan ocha, it has only risen by 21 baht, buying 3 packs of instant noodles. Mr Suchart Chomklin, Minister of Labor, came out and said that the policy to increase wages would be a disaster for the country. You are the Minister of Labour, you should show a vision that if it can be achieved, it should be supported because the Palang Pracharat Party that had previously campaigned for votes could not do it,’ said Ms Thanaporn.
Ms Thanaporn said under the current government, money and wealth being generated by the economy were not flowing to the mass of people but upwards to those who control the business sector and higher amounts of capital.
Ms Thanaporn said while it was controversial, the Pheu Thai leadership had accomplished such feats before and attacked the current government’s record
This proposal would change that somewhat to help distribute income among the grassroots economy where it was badly needed.
She said that it was not bad news for businesses and employers as the Pheu Thai Party also proposed policies to assist businesses and boost the overall economy.
Addressing the current government’s performance, she was scathing.
‘You should look at it without prejudice. Of course, this is controversial. But it must be with a reason. It’s not a splash policy that cannot be achieved. Well, you’re the government and you can’t. Will you wait for Pheu Thai to become the government first? If they can do it, then what will you do? 8 years for you guys, nothing gets better. Workers are in a bad state, unemployed. New employment, there is none,’ declared Ms Thanaporn.
The labour rights campaigner expressed confidence in both the attitude and vision presented by the Pheu Thai Party.
She said that the party and its predecessors had pulled off such feats before that helped those living outside Bangkok and the farming community.
‘Of course, people were stunned, because Pheu Thai thinks big. But I think they can do it. Because they understand that if they can’t do it, it will be a problem. It’s like the 30-baht policy to cure all diseases. Or the minimum wage of 300 baht for the whole country causing workers to not be concentrated in Bangkok because no one wants to leave home. It will reduce the utility budget that he has to take care of in the industrial estates. Other policies are consistent, such as farming policies. Because farmers are our parents,’ Ms Thanaporn said.
Academic expressed support for the proposal but warned of the danger of stoking inflation and called for a policy to control the cost of living also
Mr Santiphap Rasatyindee of the Faculty of Social Sciences Student Club Srinakharinwirot University (SWU) broadly welcomed the policy initiative, particularly concerning the minimum salary for graduates with bachelor degrees.
He pointed out that the current minimum was ฿15,000 with ฿9,000 for unlicensed teachers working at a professional level.
He said such a policy would help address the brain drain currently being experienced by the kingdom.
However, Mr Santiphap felt the policy may not fully achieve its goal and worried about potential inflationary pressures.
He said he would also like to see a government programme also to hold down the cost of living running in parallel with this policy of higher earnings.
He pointed to the already high cost of living for young workers in Bangkok and with prices such as the underground and BTS due to rise further next year, a projected salary of ฿25,000 would be a step forward for young graduates.
At the same time, he forecast that with a 5% growth per annum, one of the effects of this sort of policy approach would be to move employment opportunities from smaller to larger firms due to the rise in employment costs.
He said the proposed policy favours workers but also larger firms and investors.