Bangkok’s Wage Hike: Power Play Exposes Thailand’s Deep Inequality
The fight over wages is always a fight over power, a referendum on whose needs the economy will serve. Thailand’s newly approved minimum wage increase, to 400 baht ($12.35) per day for Bangkok and specific tourism sectors, effective July 1, 2025, is no exception. Khaosod reports the boost will affect around 700,000 workers. But the devil, as always, is in the details, and in what those details tell us about Thailand’s deeply unequal power structure.
Why these workers? Why this increase? The fact that minimum wage rates remain frozen at lower levels across much of the rest of Thailand speaks volumes. This isn’t just about economics; it’s a map of political influence and priorities. Bangkok, and the tourism industry — contributors to GDP and key political constituencies — carry disproportionate weight. They are being carefully tended to.
It’s easy to frame this as a win, and perhaps for some it is. Labor Ministry Permanent Secretary Bunsong Thapchaiyuth spins it as “improv[ing] workers' quality of life in line with current living costs while maintaining business balance for employers and driving sustainable economic growth.' But that’s the official line, the soothing balm applied to a deeper wound.
Consider the numbers. A 28-baht increase from the previous 372-baht minimum wage. That’s less than a dollar. While any raise can help, calling this a game-changer feels overly optimistic. Especially when considering Thailand’s inflation rate and rising living costs in its urban centers, costs that disproportionately impact the poor.
Zoom out a bit. Thailand’s income inequality is stark. The Gini coefficient, a measure of income distribution, reveals a persistent gap between the rich and poor. And this isn’t a recent phenomenon. Consider that in the 1990s, even during periods of rapid economic growth, the benefits flowed upwards. The 1997 Asian Financial Crisis only exacerbated these trends, wiping out the savings of many while the wealthy were better positioned to weather the storm and consolidate their assets. For decades, wealth has concentrated at the top. While tourism and export-led growth have fueled the economy, the benefits have not trickled down equitably.
Minimum wage laws are never just about minimum wages. They’re about bargaining power. Who gets to decide how the economic pie is sliced? Who gets a seat at the table? The segmented approach here — some regions and industries benefit, others do not — suggests a targeted appeasement rather than systemic reform. It reveals a political calculation: who needs to be placated to maintain stability?
The question remains: Why not a truly national minimum wage? Why not a wage floor that keeps pace with inflation and provides a living wage for all Thai workers? The answer is likely multifaceted, involving lobbying by powerful business interests. Fear of pricing out Thai exports is often presented as justification, a justification that conveniently ignores the immense profits already being generated. But it’s also about a deeply ingrained belief, perhaps even unconscious, in certain sectors of Thai society that low wages are essential for competitiveness and that any significant increase would damage the economy.
As political scientist and sociologist, Walter Scheidel, has argued, inequality tends to be resilient unless disrupted by catastrophic events. Slow, incremental adjustments, like this minimum wage increase, rarely shift the underlying power dynamics. They serve to maintain the status quo, not transform it. Incrementalism, in this context, is often a tool of preservation.
This Thai case reminds us that economics and politics are deeply intertwined. A seemingly simple wage adjustment is a reflection of competing interests, historical baggage, and a complex web of power relationships. It’s a story about who has the power to define "balance” and “sustainable economic growth” in a way that disproportionately benefits them. It is a partial victory, perhaps. But not a victory for all, and a reminder that the fight for economic justice is a marathon, not a sprint, and one where the starting line is far from equal.
