On Sunday January 1st, Mexico’s minimum wage rose almost 10% in a jolt to the system meant to stoke the poorest workers’ buying power, which has been eroded by recessions and past bouts of high inflation.
But the prospect of higher earnings is doing little to dent pessimism among consumers, who start 2017 facing rising fuel costs, higher interest rates and a weakening peso that closed 2016 near record lows against the U.S. dollar.
Labor, government and business leaders on the Minimum Wage Commission agreed to raise the daily minimum wage to 80 Mexican pesos, or about $4, from 73 pesos, a break from a years long custom in which annual increases were roughly in line with inflation.
Mexico’s discussions on raising the minimum wage coincide with moves in the U.S., where some 4.4 million workers in 20 states are set to receive increases at the beginning of the year. That has also fueled debate on whether it will make U.S. employers reluctant to hire.
The commission split the increase into two parts: Four pesos a day to restore purchasing power and on top of that 3.9%. Authorities hope the 3.9% will be used as the benchmark for other wage negotiations, avoiding the so-called lighthouse effect where minimum-wage increases fuel demands across the board and threaten an inflationary wage spiral.
The minimum-wage increase followed several years of studies and discussions on the effect it could have on productivity, employment, and inflation.
Around 15% of the country’s 52 million workers make minimum wage, according to government data. Most of them are employed informally, and a majority contribute less than half of their household income, so many households survive because they have several wage earners.
“It would be a utopia to think that a family lives on 74 pesos a day], not even one person lives on 74 pesos,” Carlos Acevez del Olmo, secretary-general of the Mexican Workers Confederation, said at a news conference.
By Elliot Bullman for Mexico News Network
more recommended stories
Ixi’im Restaurant: a physical and visual integration that allows transit between epochs
This place went from an abandoned.
More police presence in Playa del Carmen
The municipality of Playa del Carmen.
Atlanta GA restaurant offers Yucatan-inspired rooftop
Estrella, a Yucatan-inspired rooftop restaurant and.
Gigantic bombastic creatures take over Mexico City
On Saturday, October 20, the 12th.
Chablé Maroma: a unique Riviera Mayan retreat with a dash of Mayan mysticism
Yamuna is reading my aura—whether I.
23 technology projects presented at Yucatán’s “Binational Node of Innovation”
The report of 23 scientific teams.
Honey production decreases in Yucatan
The current situation of bees has.
Scientific study alerts on the Yucatan coast’s state of health
“The National Coastal Resilience Laboratory (Lanresc).
Don Murphy from International Living describes the.
Mexico against breast cancer
National science has taken gigantic steps.