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Thai firms seek minimum wage freeze after floods
Source: Agencies |
October 17, 2011, Monday
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FLOODS that have devastated parts of Thailand spared Bangkok at the weekend but industry is counting the cost and employers want the government to defer a jump in the minimum wage that is due to be decided today.
Flooding has killed at least 297 people since late July and had caused US$3 billion in damage even before engulfing two more industrial estates north of Bangkok over the weekend.
A combination of monsoon rain, high estuary tides and water flowing down from reservoirs in the north had threatened the capital but finally its defensive system of dikes and canals held.
Ayutthaya, Pathum Thani and Nakhon Sawan provinces north of Bangkok have been devastated. Floods have swallowed up homes and forced a series of industrial parks to close, including the Factory Land estate in Ayutthaya at the weekend.
Most of its 93 factories make electronic components and car parts, so this will add to the problems of the international firms that use Thailand as a regional production hub.
The central bank has said 104 bank branches have closed because of flooding, mainly in the central region. Deputy Prime Minister Kittirat Na Ranong has called bankers to a meeting at the government's flood crisis centre today.
The party of Prime Minister Yingluck Shinawatra promised a minimum wage of 300 baht (US$9.7) a day before it won power in July and a tripartite committee of government, union and employer representatives meets today to decide on this.
That wage -- an increase of as much as 90 percent in some poorer areas -- is opposed by many businesses and industry has stepped up its criticism as the cost of flood damage has risen.
The committee had been edging towards a compromise that would approve the full increase only in Bangkok and six other provinces from January, but the employers now want a decision to be put off for six months.
Former Prime Minister Thaksin Shinawatra, brother of Yingluck and seen by many as the person really running the government from self-imposed exile in Dubai, said the full increase should go ahead.
"If you think it will cost businesses more, slashing their profitability, that is the one-dimensional view," he told the Bangkok Post. "But for me, the policy will reallocate resources in society and is also a good way to boost productivity."
Both the central bank and government have provisionally put the cost of the flooding at about 100 billion baht (US$3.2 billion), more than 1 percent of gross domestic product (GDP).
The Finance Ministry has cut its GDP growth forecast for this year to 3.7 percent from 4.0 percent.
Flooding has killed at least 297 people since late July and had caused US$3 billion in damage even before engulfing two more industrial estates north of Bangkok over the weekend.
A combination of monsoon rain, high estuary tides and water flowing down from reservoirs in the north had threatened the capital but finally its defensive system of dikes and canals held.
Ayutthaya, Pathum Thani and Nakhon Sawan provinces north of Bangkok have been devastated. Floods have swallowed up homes and forced a series of industrial parks to close, including the Factory Land estate in Ayutthaya at the weekend.
Most of its 93 factories make electronic components and car parts, so this will add to the problems of the international firms that use Thailand as a regional production hub.
The central bank has said 104 bank branches have closed because of flooding, mainly in the central region. Deputy Prime Minister Kittirat Na Ranong has called bankers to a meeting at the government's flood crisis centre today.
The party of Prime Minister Yingluck Shinawatra promised a minimum wage of 300 baht (US$9.7) a day before it won power in July and a tripartite committee of government, union and employer representatives meets today to decide on this.
That wage -- an increase of as much as 90 percent in some poorer areas -- is opposed by many businesses and industry has stepped up its criticism as the cost of flood damage has risen.
The committee had been edging towards a compromise that would approve the full increase only in Bangkok and six other provinces from January, but the employers now want a decision to be put off for six months.
Former Prime Minister Thaksin Shinawatra, brother of Yingluck and seen by many as the person really running the government from self-imposed exile in Dubai, said the full increase should go ahead.
"If you think it will cost businesses more, slashing their profitability, that is the one-dimensional view," he told the Bangkok Post. "But for me, the policy will reallocate resources in society and is also a good way to boost productivity."
Both the central bank and government have provisionally put the cost of the flooding at about 100 billion baht (US$3.2 billion), more than 1 percent of gross domestic product (GDP).
The Finance Ministry has cut its GDP growth forecast for this year to 3.7 percent from 4.0 percent.
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