Gustavo Hoyos of Coparmex. Gustavo Hoyos of Coparmex.

Business group urges minimum wage hike

Coparmex proposes 22% increase based on what's needed to buy basic basket of goods

Caution appears to be the watchword for one national business organization in its response to a proposal by another business group to hike the minimum wage by 22%.

Described by some as a bold move, the Mexican Employers Federation (Coparmex) proposed that the minimum daily wage be increased from its current level of 73.04 pesos per day to 89.35 pesos before the end of 2017 (from US $3.54 to $4.33 at today’s exchange rate).

The president of the federation explained that the proposed salary would cover the value of  the “basic basket of goods” as it is defined by Coneval, the National Council for the Evaluation of Social Development Policy.

“The intention [of the wage hike] is to ensure that in an essentially short period of time the salary of someone employed in the formal sector is sufficient for human well-being,” said Gustavo Hoyos.

By making its proposal, which is significantly higher than previous annual increases, Coparmex is venturing into territory that has usually been occupied by left-leaning politicians.

In response, the Business Coordinating Council, or CCE, urged caution.

CCE president Juan Pablo Castañón said implementing such a wage hike should be carried out in a responsible manner and with consensus.

While the council is in favor of increasing the minimum wage caution is warranted given the current climate of volatility, a climate has been worsened by Donald Trump election victory, said Castañón.

When raising wages it’s important not to fuel inflation and at the same time maintain employment levels. “And jobs and inflation have always been part of the discussion in finding a solution.”

Castañón said that the CCE is not opposed to a salary that covers an employee’s basic needs. “We should even surpass it, and that has been a proposal on which the business sector has been working on, not just Coparmex.”

The Labor Secretary says a three-way consensus of the CCE (to which Coparmex belongs), union representatives and government is needed before a decision can be made.

Alfonso Navarrete Prida acknowledged that the purchasing power of the minimum wage has fallen 75% during the last 40 years, and that all parties involved agree that it should be higher. But the change, he said, must be carried out in a responsible manner.

Many workers are represented in the discussion by the Confederation of Mexican Workers (CTM), a confederation of labor unions. It has proposed a minimum wage of 100 pesos starting January 1.

Source: Milenio (sp)

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