Thousands of Burmese migrants face unemployment after new minimum wage requirements imposed by the Thai government earlier this month forced several factories and workshops to close down.

Many businesses, who employ cheap labour from neighbouring Burma, Cambodia and Laos, cannot afford to pay their workers the 300 Baht (USD$10) daily wage required by law since 1 January.

According to Thai media, dozens of factories have been closed, including some eight garments, electronics and ceramic producers based in Tak province near the Burmese border. Thousands of jobs are estimated to have been lost.

Chiwat Withit-Thammawong, chairman of Tak Province’s Federation of Thai Industries in western Thailand, told Manager Online news website that government schemes intended to cushion the wage hike, such as reducing social security fees from 5% to 4% and cutting back interest rates for investment loans, had been insufficient.

He called on the government to introduce more effective policies to help local businesses, who would otherwise need to look at relocating to neighbouring Burma, where the infrastructure is still weak after decades of military rule.

Moe Swe from the Mae Sot-based migrants’ rights group, Yaung Ni Oo, told DVB that the new law could also provide an incentive for unscrupulous companies to exploit illegal Burmese labour.

“I think there will be more migration and employers will tend to hire more illegal workers resulting in more workplace abuses and unfair treatment,” he said.

Migrants in Thailand make up about five percent of the county’s workforce, and provide a crucial pool of labour for low-skilled, often dangerous, industries such as fishing and construction. Up to three million people, or about 80 percent, are estimated to come from Burma, and often occupy a quasi-legal existence that leaves them vulnerable to abuse and exploitation.

Many workers have staged protests against the abrupt closure of their workplaces. On 2 January, around 200 workers at an underwear factory in Saraburi province rallied against their employer’s decision to close down without giving any advance notice.

Thailand’s Prime Minister Yingluck Shinawatra has defended the wage increase as necessary to improve the lives of workers and help boost consumer spending, but pledged to help businesses through the transition. The government has also warned that any employers, who disregard the new wage hike, will face severe penalties.

The treatment of migrant workers in Thailand has been a source of controversy for many years, drawing regular criticism from human rights groups. Even democracy icon Aung San Suu Kyi used her landmark visit to the country in June to press the government on better conditions for Burmese workers.