Wage hike stuck in limbo

The national tripartite wage committee deferred its meeting again yesterday, derailing the Pheu Thai Party’s flagship policy of raising the daily minimum wage to 400 baht nationwide by Oct 1.
It must be said that the wage committee’s meeting postponement — the third in a matter of a week — is unusual. Of course, the 15 members of the tripartite panel have always been in conflict, but they never deliberately skipped meetings like they did this past week.
The large daily wage hike during Yingluck Shinawatra’s administration a decade ago was smoother.
What is happening with the wage committee should indicate to the government and elected politicians in public offices that a fair daily wage policy needs to be actively driven.
Theoretically, the tripartite committee — comprising employers, employees, and government representatives — must mutually agree on daily wages based on a calculation formula reflecting the country’s economic health.
However, politicians can make the final call, and such political will is always good if economic conditions are suitable.
Raising the daily wage is benevolent and should be done as long as economic conditions permit. It should not be done so that some politicians can realise their electoral promises or placate disgruntled voters.
The problem is politicians often use the daily wage policy to solve bread-and-butter issues without upgrading the economy to be sustainable and competitive.
After raising the daily wage, every government has promised to raise the research and development budget, improve trade regulations, or help upskill labour and add value to Thai brands. Therefore, employers and businesses should be able to sell more and pay their employees much better.
The reality proves they failed in this matter.
In terms of manufacturing, foreign companies can start to migrate to neighbouring countries where labour costs are cheaper.
On labour supply, promises made by every government to improve labour skills always remain as lip service.
In terms of products, Thai manufacturers are trapped in cheap labour production and cannot catch up in making innovative or green products that rich importing nations want.
Meanwhile, small and medium-sized manufacturers are hardest hit by cheap imports.
Indeed, Thailand’s industries are facing an existential crisis, and the big question is what the future of them will be.
Governments have only offered small business tax reductions and reduced employer contributions to the Social Security Fund. Meanwhile, governments use daily wage policies for low-income workers and provide subsidies for utility bills.
Now, Prime Minister Paetongtarn Shinawatra’s administration has the opportunity to truly reform the government’s daily wage policy, and it must do so.
Ms Paetongtarn can begin by listening to opinions from all stakeholders, adopting sustainable policies, and awarding skilled labour and competitiveness.
Apart from raising wages, she can also steer the government in reforming welfare, such as providing low housing services, better education, and good and decent transport to improve people’s living conditions.
But for starters, the young PM might be able to make her own mark by crafting a real, sustainable daily wage policy.