Raising the minimum wage will force Thai textile companies to close

Experts in the Thai textile industry said that if the Thai Heu Party (PTP) raises the national minimum wage according to the agenda. Textile manufacturing companies in the Chaiyaphum province in northeastern Thailand will face closures.

PTP is the leading party of the Thai ruling coalition government. It proposed to increase the minimum wage from the current 165 baht to 300 baht/day starting in January 2012.

Thailand’s top five textile companies operate more than 40 manufacturing companies, investing 20 billion baht in Chaiyaphum Province, and establishing a textile industry special zone in 2003.

Experts say that these companies employ more than 20,000 workers and pay the current minimum wage. If the minimum wage is actually raised to 300 baht, these companies will find it difficult to survive.

In this case, textile companies have only two options - either to shut down their business or to transfer their production operations to neighboring countries such as Cambodia, Indonesia, Laos, Vietnam, because the labor costs of neighboring countries are relatively cheap.