Thai workers have little to celebrate on Labor Day this year, with the government’s promised wage hike nowhere in sight. They will have to wait until at least October for the ruling Pheu Thai Party to honor its election pledge to raise the minimum daily wage to 400 baht.

In contrast, white-collar government workers including new civil servants and retired officials will enjoy salary hikes from Labor Day on May 1. New civil servants will start on 18,000 baht per month while the monthly pensions of retired officials will rise to at least 11,000 baht.

“The move to increase income for civil servants is politically motivated,” said Assoc Prof Dr Kiriya Kulkolkarn, who lectures at Thammasat University’s Faculty of Economics.

She argued that raising salaries in this way distorts the labor market, offering limited improvement in quality of life for middle-class earners while failing to redistribute wealth to low-income earners.

Kiriya also suspected that the government policy to significantly raise the minimum wage had a political motive.

 Minimum daily wage

The minimum daily wage in Thailand currently ranges from 330 to 370 baht depending on location. The lowest rates apply in far South provinces like Narathiwat and Pattani, while the highest rate covers the international holiday island of Phuket.

During last year’s election campaign, Pheu Thai pledged to raise the minimum wage to 400 baht within 100 days of taking office and then to 600 baht by 2027.

However, when the 100-day deadline arrived in January, the minimum wage was only raised by between 2 and 16 baht.

The government pushed it up again around Songkran but limited the 400-baht wage to 10 large provinces, namely Bangkok, Krabi, Chon Buri, Chiang Mai, Prachuap Khiri Khan, Phang Nga, Phuket, Rayong, Songkhla and Surat Thani, and only for hotels with at least four stars and more than 50 staff.

“I’ve never seen such wage hikes before,” said a skeptical Kiriya.

“In reality, the raise in April has had hardly any impact because upscale hotels were already paying their workers more than 400 baht a day.”

Labor Minister Pipat Ratchakitprakarn conceded the government could not offer the 400-baht wage as a “Labor Day gift”, but said it was determined to deliver on the policy on October 1.

What do workers think?

A recent survey found that 40% of workers earning no more than 15,000 baht a month felt the current minimum daily wage was too low.

A 35-year-old woman who earns 350 baht a day at a car parts factory in Chachoengsao said Labor Day this year was a big disappointment because the government failed to raise the minimum wage.

“Meanwhile, living expenses have jumped,” she lamented. “I struggle to make ends meet every month.”

Even after working overtime, she and her husband earn less than 30,000 baht a month. From that amount, 5,000 baht goes to their parents who take care of the couple’s kids. They also have to pay rent and instalments on their motorcycle.

Kiriya said the government has alternative means at hand to boost quality of life for workers. Apart from increasing the minimum wage, it can also control commodity prices, subsidize necessities, and offer financial help to the poor.

However, while workers will always welcome higher pay, there are concerns that employers could respond to a minimum wage hike by downsizing their workforce.

“Many small and medium enterprises will struggle when the minimum daily wage rises to 400 baht,” Kiriya confirmed.

“Foreign investors, meanwhile, may be driven to relocate their manufacturing facilities out of Thailand to places with lower wages.”

Problem of unskilled labor

Kiriya said Thailand’s minimum wage was higher than that of Cambodia, Laos, Myanmar, and Vietnam.

However, the workforce in Thailand is lower-skilled than in regional rivals like Singapore, Indonesia and Malaysia.

“Therefore, the government must upskill Thai workers, especially with regard to the digital skills needed in modern industries. Our country can’t rely on labor-intensive industries anymore,” she said.

The expert emphasized that the country must boost its education and labor ecosystem if its workforce is to prosper.

Better labor protections needed

Kiriya also encouraged workers to form labor unions to boost their negotiating power.

Sharing that view is Dr Sustarum Thammaboosadee, who teaches at Thammasat University and conducts research on the welfare state.

“Establishing and joining labor unions should be a fundamental right,” Sustarum said.

He expressed concern that some employers were quick to fire workers who stuck together or showed interest in setting up unions, while seeking to sway unions to their side.

“Some labor unions end up functioning like parts of the HR department,” Sustarum said.

Additionally, some companies try to evade labor-protection laws by hiring workers via subcontractors. Some worker contracts are even signed on a monthly basis, leaving them with little job security.

“Some of these companies are listed on the stock market too,” the academic revealed, adding that workers hired via subcontracts usually feel insecure because they can be fired without severance pay.

Sustarum said it was, in fact, illegal for companies to evade laws through subcontracts. Enforcement, however, is rare because the country has few labor inspectors who can investigate and take action against unfair practices.

The gig economy also exploits workers, he said. Misclassified as “partners” for app-based companies like ride-hailing services, they lack basic labor protection.

“If they were really partners, they would have a say in how their service fees are calculated. But as far as I know, they don’t have the power to say anything,” Sustarum said.

Move Forward Party MP Sia Jampathong laments that the labor-protection bill he proposed was rejected by Parliament despite offering just basic protections.

The bill sought to cap working hours to a maximum of 40 per week, guarantee 10 days of annual leave, and extend labor protections to gig-economy workers.

Parliament has instead approved a separate labor bill in principle. This one seeks to extend paid maternity leave from 98 days to 180 days.

By Thai PBS World’s General Desk