Raising The Minimum Wage Causes Thailand'S Garment Industry To Move Abroad
On April 7th, the Thailand government decided to raise the minimum wage in Thailand to 250 baht / day within two years.
Populism
Policy will directly hit
Labor-intensive industries
Especially in the clothing industry.
Manufacturer
Move out of Thailand to maintain market competitiveness.
Thailand exporters believe that Vietnam, Indonesia, Bangladesh and China all have business opportunities.
Some Thailand companies have moved factories to Vietnam several years ago.
Thailand insiders say it is unreasonable to raise the minimum wage from 215 baht (7 US dollars) to 250 baht in two years, which will weaken Thailand's competitiveness.
The burden is entirely on the shoulders of manufacturers, making it more difficult for them to report competitive prices.
Therefore, they had to move their production out of Thailand, on the one hand, using cheap labor abroad, and on the other hand, using foreign tax incentives to get free trade agreements.
Sukij Kongpiyacharn, chairman of the Thailand Garment Manufacturers Association, said that Thailand's six largest garment manufacturers, Nice Apparel, Hi-Tech Group, Tongtai textile (Thong Thai Textile), Nanyang textile (Nan Yang Textile), free women's God clothing (Dun) and knit knitting (Nice) are conducting site survey in three potential countries, and are ready to build factories in these three countries.
These garment manufacturers mainly produce sportswear.
They plan to invest an average of 800-1000 US dollars for each new plant.
Last year, these big companies added up to $700 million, while Thailand's total exports amounted to US $3 billion 200 million.
The statue of liberty set up a factory in Hu Zhiming, Vietnam, a few years ago, employing 2000 workers.
Nanyang textile has built a factory in China.
The overseas investment of these six companies is expected to reduce at least 25000 jobs for Thailand workers.
Sukij pointed out that the garment industry mainly relies on labor-intensive production, and the wages paid by manufacturers are higher than the minimum wage.
For example, the average daily wage of the general skilled workers is 300 baht (US $10) -400 baht (US $13), including 2 hours overtime.
He said this is the first wave of Thailand manufacturers investing overseas, but more companies are considering imitated their practices.
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