BANGKOK – Thailand will increase its daily minimum wage to 400 baht (approximately $11.76) in 2025, fulfilling a key campaign pledge by the Pheu Thai Party. Following this, the government intends to raise the wage further to 600 baht by 2027, a measure that will primarily affect businesses with more than 200 employees.

Thailand’s Labour Minister, Phiphat Ratchakitprakarn, hailed the wage hike as a “New Year’s present” from the government. He argued that it would lift the standard of living for low-income workers, addressing income inequality in the process.

The increase, originally slated for October, has been postponed and will now be finalised during a tripartite wage committee meeting later this month. In September, Phiphat sought to ease employers' concerns, many of whom feared the wage hike could hit their bottom lines.

“I came from the business sector, and the companies within our group will be affected significantly. We have about 30,000 employees, and the wage will apply to 20,000 of them. We accept the situation,” Phiphat said, as quoted by the Bangkok Post.

A balancing act for businesses

The proposed wage increase aims to address spiralling living costs and provide relief to workers grappling with economic challenges. However, for many businesses, it feels less like a New Year’s gift and more like an additional burden. Employers continue to voice concerns about potential job losses and the broader economic impact of the change.

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, has urged the national wage committee to consider the far-reaching consequences of the hike, including its potential to erode Thailand’s competitive edge.

The ripple effects of the increase could take multiple forms. Labour-intensive industries such as textiles and agriculture are likely to bear the brunt, grappling with rising operational costs.

On one hand, businesses may resort to layoffs or shifts to informal employment to stay afloat. On the other, they might raise prices to offset higher wages, stoking inflationary pressures. The result: low-income families could find themselves caught between a rock and a hard place, as essential goods become more expensive.

Also Read: 2025 pay raise and salary trends 

Moreover, the possibility of firms relocating to countries with cheaper labour – like Vietnam or Cambodia – looms large. Such moves could not only deepen job losses but also stall industrial growth in Thailand's underdeveloped regions.

Higher wages may also fuel inflation, undermining the competitiveness of Thai goods in regional and global markets. Without an 8–10% rise in productivity, economic growth could shrink by roughly 1.7% from projected levels – an outcome that could leave Thailand's economy treading water rather than sailing forward.

Migrant workers in Thailand: Winners or losers?

Migrant workers, who constitute a staggering 80% of Thailand’s minimum wage earners, stand to gain from the increase. Higher wages could improve their financial stability and enable them to send greater remittances to their home countries – a silver lining for the workers but a double-edged sword for Thailand.

Weera Tangwutthikraiwit, president of the Suphanburi Chamber of Commerce, highlighted the dilemma: “The benefits would go to migrant workers, and much of their salary would be sent back to their home countries, with less being spent within Thailand. For example, if they earn 20,000 baht per month, they might transfer 12,000 baht or more than half of it abroad,” he told The Nation.