The minimum wage in Mexico has increased by 20% in 2024. This year is the sixth consecutive year of a rise in the minimum wage. This significant change, reported by AP, is expected to affect one-third of the country's registered workers earning the minimum wage.
Understanding these changes is crucial for manufacturers to maintain their status. The increase in the minimum wage in Mexico comes with its own set of challenges and opportunities. It also requires a strategic approach to minimum wage management and employee relations.
This article explains the increase in minimum wage in Mexico. It explores how it may reshape labor costs for manufacturers in Mexico, underlining the importance of proactive and thoughtful adaptation to remain at the forefront as employers of choice.
Official name: “United Mexican States”
Spanish is the official language alongside over 68 indigenous languages.
Currency: “Mexican Peso”
Territory:
Mexico City is the capital of Mexico, which accommodates the ruling government. The Mexican state consists of 32 divisions, also called states: “Aguascalientes”, “Baja California”, “Baja California Sur”, “Campeche”, “Coahuila”, “Colima”, “Chiapas”, “Chihuahua”, “Durango”, “Mexico City”, “Guanajuato”, “Guerrero”, “Hidalgo”, “Jalisco”, “Mexico”, “Michoacan”, “Morelos”, “Nayari”, “Nuevo León”, “Oaxaca”, “Puebla”, “Queretaro”, “Quintana Roo”, “San Luis Potosi”, “Sinaloa”, “Sonora”, “Tabasco”, “Tamaulipas”, “Tlaxcala, Veracruz”, “Yucatán”, and “Zacatecas”.
Population: The Mexican population is 127 million.
Government: Mexico is governed by a Representative Republic, Democratic, and Federal Government composed of free and sovereign in all matters relating to their internal Government but united in a Federation.
The minimum wage in Mexico affects many sections of society. It helps low-income workers get fair compensation in return for their labor and helps a large chunk of people meet their basic needs. The lack of a minimum wage in Mexico leads to significant income inequality and forces talented and potential growth, driving the workforce into poverty.
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The minimum wage in Mexico is transforming with the significant increase in the general minimum wage announced by the National Minimum Wage Commission. The prevailing minimum wage has been adjusted from MXN 207.44 to MXN 248.93, which is approximately USD 13.83 per day.
Similarly, the minimum wage in Mexico has been revised in the Northern Border economic free zone, a critical area within an expansive stretch along the Mexico-U.S.
President Andrés Manuel López Obrador's persistent efforts to increase the minimum wage in Mexico from MXN 88 to MXN$ 260 have to reach their maximum potential by the end of their term in 2025. For reference, in USD, it is from USD 4.89 to $ 14.44.
Presently, the minimum wage in Mexico applicable in the Free Zone of Northern Border is $248. Based on various considerations, it is set to increase by at least $27, almost reaching the President's target.
On Nov. 30, 2023, the National Minimum Wage Commission (CONASAMI for its acronym in Spanish) unanimously agreed to increase the minimum wage in Mexico, from Jan. 1.
The minimum wage in Mexico was raised as follows:
This increase was achieved through consensus among employers, unions, and the federal Government and represents a 20 percent global rise in the general minimum wage in Mexico.
This wage increase comes in the context of a slowdown in inflation in Mexico during 2023, reaching levels of approximately 3.4 percent for the last quarter. It is expected that inflation will continue to decrease in 2024.
With this minimum wage in Mexico increase, the aim is to continue improving the economic conditions and purchasing power of workers in Mexico, getting closer to the wellness line determined by the National Council for the Evaluation of Social Development Policy (CONEVAL is the acronym for its name in Spanish).
The minimum wage in Mexico has significantly increased from MXN 88 to MXN 248 to meet the growing market demands as well as employment policies.
It is still pretty low when compared to the cost of living, but it's still difficult to ignore how it is growing at a rapid rate.
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