[Mexico] 22% minimum wage increase for 2022 agreed

On December 1, President Andres Manuel Lopez Obrador announced that Mexico's government and business groups have agreed to increase the daily minimum wage next year by 22 per cent, in another small step towards addressing Mexico's wealth disparity, Reuters reports.

The increase represents the biggest wage hike, in nominal terms, that Lopez Obrador has pushed through since taking office in 2018. He made an election pledge to prioritise the poor and reverse a decades-long decline in workers' purchasing power.

His administration raised the minimum wage by 16 per cent in 2019, 20 per cent in 2020 and by 15 per cent in 2021.

However, Mexico’s minimum wage remains far below US levels and this move follows a marked uptick in inflation this year. The federal minimum wage in the US is $7.25 an hour and the rate is higher in many US states.

The new increase will move Mexico's minimum wage to 260.34 pesos ($12.15) a day in the northern border zones - where a considerable number of foreign-owned factories are located - and 172.87 pesos ($8.07) a day in the rest of the country.

Lopez Obrador announced the 2022 increase during a speech at Mexico City's main public plaza to mark the third anniversary of his presidency. He praised the consensus reached among government officials, employers and workers.

Mexico's National Minimum Wage Commission (CONASAMI) said the 2022 increase is the highest in nominal terms since 1987 and will bring purchasing power to where it was in 1985. 

CONASAMI said the wage hike will benefit some 6 million people.

Business associations welcomed the news.

"We welcome this agreement ... and reiterate our commitment to not leave our colleagues and their families unprotected," a statement from top Mexican business lobby CCE said. However, the statement flagged inflation - which has risen to more than double the central bank's target - as a challenge to still address.

"Mexico's economy is beginning a recovery phase with high inflation levels that we need to contain," the CCE said.

On December 1, President Andres Manuel Lopez Obrador announced that Mexico's government and business groups have agreed to increase the daily minimum wage next year by 22 per cent, in another small step towards addressing Mexico's wealth disparity, Reuters reports.

The increase represents the biggest wage hike, in nominal terms, that Lopez Obrador has pushed through since taking office in 2018. He made an election pledge to prioritise the poor and reverse a decades-long decline in workers' purchasing power.

His administration raised the minimum wage by 16 per cent in 2019, 20 per cent in 2020 and by 15 per cent in 2021.

However, Mexico’s minimum wage remains far below US levels and this move follows a marked uptick in inflation this year. The federal minimum wage in the US is $7.25 an hour and the rate is higher in many US states.

The new increase will move Mexico's minimum wage to 260.34 pesos ($12.15) a day in the northern border zones - where a considerable number of foreign-owned factories are located - and 172.87 pesos ($8.07) a day in the rest of the country.

Lopez Obrador announced the 2022 increase during a speech at Mexico City's main public plaza to mark the third anniversary of his presidency. He praised the consensus reached among government officials, employers and workers.

Mexico's National Minimum Wage Commission (CONASAMI) said the 2022 increase is the highest in nominal terms since 1987 and will bring purchasing power to where it was in 1985. 

CONASAMI said the wage hike will benefit some 6 million people.

Business associations welcomed the news.

"We welcome this agreement ... and reiterate our commitment to not leave our colleagues and their families unprotected," a statement from top Mexican business lobby CCE said. However, the statement flagged inflation - which has risen to more than double the central bank's target - as a challenge to still address.

"Mexico's economy is beginning a recovery phase with high inflation levels that we need to contain," the CCE said.