Home Business-newBusiness Yucatecan exporting companies most affected by the 20% wage increase

Yucatecan exporting companies most affected by the 20% wage increase

by Yucatan Times
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Product exporting companies would be the most affected by the 20% increase in the minimum wage of workers that would apply in 2024.

According to the president of the National Chamber of the Processing Industry (Canacintra) in Yucatán, Abelardo Casares Add, although the measure represents a benefit for human capital, companies that export nationally or internationally more than 30% of their production would be those who have trouble complying with this official provision.

Are Yucatecan export companies in trouble?

«Depending on the business of the company, the vocation of the national market or the export market, it is how well or how difficult it will be to face an increase in salary. Definitely, this will be seen in the export companies, the maquiladoras, whose profit margin is small but their volume is large,” Casares Add said.

According to the provisions of the federal government, as of January 1, 2024, the minimum wage will go from 207.44 to 248.93 pesos per day for workers who contribute to the Mexican Social Security Institute (IMSS).

This measure will benefit nearly 9 million people throughout Mexico, who would have an increase higher than the inflation expected for next year.

According to the interviewee, the salary increase could mean up to 40% of a company’s final profit.

For this reason, he stated that they would have to produce more or increase the sales price of their products, which could be precisely compensated by the increase in the minimum wage, which will apply to workers who earn the least.

Domino effect

«The one who is at the next level will suddenly go up a 15, the one who is in management, a leadership, will go up a 10, a 7 and so on. So, your entire salary infrastructure moves when you move the first salary level, that’s why, when you total it, it represents a X percentage in your cost,” he noted.

He recalled that more than 60% of the cost of a company’s expenses is for the payment of labor, which is why, he says, the prices of final products could rise by up to 12%.

He pointed out that one of the strategies to avoid further damage is the promotion of fair trade, that is, paying the correct price for raw materials without affecting production to meet the official indication.

TYT Newsroom

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