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Firms in Thai north hurt by minimum wage rise
Publication Date : 10-03-2013
Following the daily wage hike to 300 baht (US$10) in Thailand, business people in Lampang, in the country's north, want the government to adjust loan criteria for them - and warned 10 per cent of key local businesses could fold by June if they don't get assistance.
Vice Minister for Labour Visa Khanthap presided over a workshop on small and medium enterprises (SMEs) at Lampang Rajabhat University yesterday. He said Lampang had 4,125 business establishments in 28 fields (especially food, wholesale/retail, wooden furniture, ceramics and glass) covering 57,523 employees - most of them were SMEs.
In January-February, 1,003 Social Security Office subscribers claimed compensation for unemployment and only 18 complaints were filed about not getting the 300 baht wage.
Athiphum Khamthonwararin, honorary chair of Lampang Industrial Council, said that following the hike, businesses in the province cut 10-30 per cent of "ineffective" workers, hence productivity and income lowered. And firms had shifted from daily hiring to wages paid according to the amount of work done. Athiphum said that only some of 15 alleviation measures by the government would help, while some were almost useless. What they wanted most was a fund to help pay for the difference from the old daily minimum to the new wage - but the government had ignored that idea, he said.
He also urged the government to cut the criteria for loans because many were hit hard by the wage hike and the energy price hike next month would add to costs. He warned that 10 per cent of the area's 1,200 makers of wooden furniture and ceramics could fold by June.
Lampang Silapanakhon owner Kittisak Sinwanasap said his ceramics company had 265 workers - 30 of whom didn't yet get the wage hike as they were inexperienced newcomers. If the company could increase the price of ceramics, he would hike the workers' payment.
Wage rates in the province had leapt from 165 baht per day in 2011 to 300 baht in 2013 - 40 per cent, leading to many SMEs to quietly shut down. Some support measures such as tax reduction by government weren't accessible to Lampang firms, as most were family-run, Sinwanasap said, and urged the government to talk with banks to be less strict in considering loans for SMEs.