The minimum wage will go up again next year. The 22% increase, announced this Wednesday, is the fourth consecutive since 2019. In the northern border, which enjoys a particular economic status, the minimum wage will be 260.34 pesos a day and in the rest of the country, 172, 87 pesos. Unlike last year, this time there have been no differences between the Government, unions and employers. All have supported the increase at a time dominated by inflation and the slowdown in the recovery after the hit of the pandemic.
The increase brings the minimum wage closer to the basic welfare indicators. On the northern border, the new level will cover 112% of the Family Welfare Line, defined by the National Council for the Evaluation of Social Development Policy (Coneval), and in the rest of the territory it will represent 74%, according to a statement. of the Business Coordinating Council (CCE), the main employers’ association in the country. “With this agreement, the CCE and the organizations that comprise it endorse (…) their commitment to improve the income of workers and overcome, in the short term, the Family Welfare Line,” he stated.
The support of the CCE contrasts with its opposition to an increase of 15% by 2021, in the midst of the economic crisis due to the pandemic. The increase in the minimum wage last year came out with the support of the unions and the Government, the other two members of the National Commission for Minimum Wages (Conasami). The bosses argued then that the rise would make “the survival of many small and medium-sized companies unviable” and that it would be reflected in an increase in informality. Recent academic research found no negative impact on job creation.
President Andrés Manuel López Obrador has celebrated the increase. “It means that during our tenure the increase has been 65% in real terms, something that has not happened in more than three decades. The minimum wage in the border area has more than doubled ”, he declared during a speech in the Zócalo to celebrate three years of government. Before the new policy, Mexico had one of the lowest minimum wages in the region. In 2010, it was in 80th place out of 131 countries and since then it has advanced seven places, according to Conasami.
Although the hardest part of the pandemic has been left behind, the decision comes in a still difficult economic environment. Inflation stood at just over 7% per year in the first half of November, the highest level in 20 years. Furthermore, all indicators point to the recovery slowing down. In the third quarter of the year, GDP fell 0.4% compared to the second, the first setback since the start of the reopening. After the bad data, Banco de México has lowered its growth forecast for 2021, from 6.2% to 5.4%.
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George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.