Thursday, June 20, 2024

Employers’ federation proposes 12.8% increase to minimum wage

As the annual negotiation over minimum wage adjustments in Mexico begins, José Medina, president of the Employers’ Confederation of the Mexican Republic (Coparmex), said in a Tuesday interview with the Spanish news agency EFE that his organization will seek an increase of 12.8% for 2024.

With this proposal, the minimum wage would go from just over 207 pesos per day (US $12.02) to almost 234 pesos per day (US $13.59) — a monthly increase of about 600 pesos (US $34.85).

AMLO Minimum wage
President López Obrador has made increasing the minimum wage a key focus of his presidency. (Mario Jasso/Cuartoscuro)

The term of President Andrés Manuel López Obrador has been marked by a consistent focus on increasing the minimum wage.

It was just 88 pesos per day (US $5.11) when he took office in December 2018, but annual double-digit raises have boosted it beyond 200 pesos per day. López Obrador has said he wanted the rate to reach 260 pesos per day (US $15.03) by the time he leaves office on Oct. 1, 2024.

Workers in northern border states make even more, with a current minimum wage of 312 pesos per day (US $18.15). Tax breaks and other measures have been given to workers in the Free Zone, which benefits from its proximity to the United States to leverage better pay and conditions.

Statistics from 2022 show Mexico ranked 34th in the OECD for hourly salary rate, at US $1.80. France was top at US $13.80 per hour. Canada ranked 10th at US $11.10 per hour, with the United States 17th at US $7.30.

Even fruit vendors in the street are targets for extortion.
The minimum wage has increased significantly in recent years, but still lags behind the cost of living in Mexico. (deposit photos)

While Coparmex has made public its proposal — on behalf of employers at 36,000 companies that together contribute a third of Mexico’s gross domestic product — López Obrador is still awaiting the formal offer from the business sector.

The decision ultimately lies with the National Minimum Wage Commission.

During the López Obrador administration, the minimum wage has increased by an average of 18.6% per year.

Still, outside of the northern states, it remains below the level needed to ensure well-being for a family of four based on two incomes. Medina blamed this on inflation, which ended 2022 at 7.82%, the highest at year’s end in 22 years, but has been steadily declining this year, reaching 4.26% in October

According to the National Council for the Evaluation of Social Development Policy (CONEVAL), the percentage of Mexicans living in poverty decreased from 41.9% in 2018 to 36.3% in 2022. 

With reports from Infobae and Forbes


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