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Wage hike will force textile firms to close - Expert
21 Jul '11
1 min read
Textile manufacturing units in Thailand's northeastern province of Chaiyaphum will be forced to close their operations if the Pheu Thai Party's (PTP's) agenda of nationwide minimum wage hike is implemented, an expert has said.
PTP is the leading party in the ruling coalition Government in Thailand. It has proposed to increase the minimum wage to 300 baht a day from the present 165 baht from January 2012.
Thailand's top five textile companies operate over 40 production units set up at a cost of 20 billion baht in Chaiyaphum province, where a special zone was set up for the promotion of textile industry in 2003.
These units employ more than 20,000 workers at the current minimum wage rate and it will become difficult for these units to survive if the minimum wage was actually raised to 300 baht, the expert said.
Under such circumstances, he added, the textile firms would be left with only two options – either to close down their operations, or to shift their production units to neighbouring countries like Cambodia, Indonesia, Laos or Vietnam, where the labour cost is comparatively cheaper.
PTP is the leading party in the ruling coalition Government in Thailand. It has proposed to increase the minimum wage to 300 baht a day from the present 165 baht from January 2012.
Thailand's top five textile companies operate over 40 production units set up at a cost of 20 billion baht in Chaiyaphum province, where a special zone was set up for the promotion of textile industry in 2003.
These units employ more than 20,000 workers at the current minimum wage rate and it will become difficult for these units to survive if the minimum wage was actually raised to 300 baht, the expert said.
Under such circumstances, he added, the textile firms would be left with only two options – either to close down their operations, or to shift their production units to neighbouring countries like Cambodia, Indonesia, Laos or Vietnam, where the labour cost is comparatively cheaper.
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