Mexico annonces to increase minimum wage by 15% from January

The Mexican government declared the country’s everyday minimum wage would be increased by 15 percent in January to the equivalent of about $7 a day.

The new wage still costs much less than $1 an hour. But the progress is well above the nation's current 3.3 percent expansion rate.

Minimum wages on the north border, which are more leading because of more expensive charges of living, will also increase 15 percent to about $10.70 a day.

President Andres Manuel Lopez Obrador announced on Thursday the business sector had recommended an improvement of 10 percent, but was defeated by labour and government representatives on the tripartite committee that defines minimum wages.

Lopez Obrador announced, “workers are running to get an improvement that is still, on the international scale, shameful.”

Mexico’s minimum wage is the most inferior in the Americas — on par with Haiti — and the still at lowest in Organization for Economic Cooperation and Development.

But the Mexican Employers’ Federation announced the raise and the coronavirus pandemic could make hundreds of thousands of small companies out of business.

“With the lack of government assistance and now, with an absurd, unreasonable increase in the minimum wage with no progressive stages, there is an enhanced risk that 700,000 business could die within the next three months,” the federation announced in a statement.

Mexico’s economic output contracted by 18.7 percent in the second quarter, and was still falling by 8.6 percent in the third quarter, mostly due to the pandemic.

Lopez Obrador declared the increase — on top of hikes of 16 percent and 20 percent in the past two years, since he assumed office in December 2018 — was required to make up for decades in which the minimum daily wage decreased in real terms.

“It is ridiculous to say this is going to impact the economy,” he stated. “The purchasing power of the minimum wage should be recovered because over 30 years, workers’ salaries were killed.”