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Mexico is set to Increase Its minimum wage next Year and pressured to reduce the country’s long task WeekIt marks the latest steps by the leftist administration to help workers in Latin America’s second-largest economy.
Starting in January, the minimum wage will rise 13 percent to 315.04 pesos ($17.27) a day. The adjustment comes after an agreement between labor, business and government leaders, Labor Minister Marath Bolaños confirmed.
However, in parts of northern Mexico near the U.S. border the daily wage will increase to about 440.87 pesos, reflecting the region’s generally higher wage levels.
chairman claudia sheinbaum During his morning press conference he said this upcoming increase will bring the cumulative increase in wages since 2018 to 154 percent.
Sheinbaum, who took office just a year ago, has championed the wage increases championed by his predecessor and mentor, Andrés Manuel López Obrador, arguing that they have done much to reduce poverty.
concerns about the economy
Sheinbaum said on Wednesday that the decision was taken after consultation with the finance ministry and the central bank as well as the business community. He has pushed back at critics who argue the new double-digit stimulus will hurt consumers by raising prices.
“It’s been said for years that the minimum wage can’t go up, it will cause inflation, there will be no more investment in the country, there will be no more foreign investment – and we are at record levels of foreign investment,” Sheinbaum said during the conference.
Some analysts, as well as Central Bank Deputy Governor Jonathan Heath, have warned that bringing the minimum wage too close to the average wage could increase inflation, even though annual headline inflation is currently within one percentage point of the Bank’s 3 percent target, following a series of interest rate cuts from the start of 2024.
The measure comes after Mexico’s economy shrank 0.3 percent in the third quarter, the first quarter year-on-year since 2021 due to a slowdown in industrial activity.
Mexico’s economy has been hit by the impact of US President Donald Trump’s repeated imposition of tariffs and uncertainty over the upcoming review of the United States-Mexico-Canada Trade Agreement (USMCA) next year.
long working hours
The government also said Wednesday it is sending a bill to Congress to reduce the working week from 48 hours to 40 hours per week by 2030. If passed, the official workweek limit would be reduced by two hours per year starting in 2027.
A 40-hour work week was a key promise during Sheinbaum’s 2024 campaign, but it has been put on hold due to opposition from business leaders.
According to OECD data, the average Mexican worker will work 2,193 hours in 2024, significantly more than workers in any other OECD country.