December 6, 2024
The National Commission on Minimum Wages (CONASAMI) has approved a 12% increase to the general minimum wage, raising it from MX$248.93 to MX$278.80 per day starting January 1, 2025. This unanimous decision by representatives from business, labor unions, and the government on December 3 signals a broad agreement on addressing wage growth under President Sheinbaum’s administration, as reported by MBN. Marath Bolaños, Minister of Labor, confirmed the increase during Sheinbaum’s morning press conference, stating, “It is more than three times what we have estimated for inflation next year.” The government projects inflation to reach 3.5% by December 2025, according to Bloomberg Linea.
This wage adjustment also applies to the Northern Border Free Zone (ZLFN), a special economic region near the US border, where wages will rise by 12%, from US$22.03 (MX$374.89) to US$24.70 (MX$419.88) per day. This increase, aimed at boosting development, includes 45 municipalities across states like Baja California, Sonora, and Nuevo Leon. Additionally, professional minimum wages for trades such as mechanics and welders will also increase by 12%.
Continuing the trend set during former President López Obrador’s administration, the wage adjustment reflects a pattern of consistent double-digit increases, including a 110% rise in the minimum wage from US$5 to US$12 per day between 2018 and 2024, as reported by MBN. Building on this momentum, President Sheinbaum has set a long-term goal for the minimum wage to cover 2.5 basic baskets by 2030, with the 2025 increase representing 1.85 basic baskets. The term “basic food baskets” refers to a set of essential food items necessary for a healthy diet, which the government uses to assess whether the minimum wage adequately supports workers.
However, despite these efforts to improve living standards, the broader economic context presents challenges. The Mexican peso has depreciated by 18% over the past year, as highlighted by Mexico News Daily. This depreciation means that, while the wage increase in pesos is substantial, it translates to a slight reduction in value when converted to US dollars, as explained by ABC News. The peso has fallen from 17.20 to around 20.30 per US dollar, eroding some of the benefits of the increase.
With inflation currently at 4.76% in Mexico, the wage hike could yield a real-term gain of about 7%, provided inflation does not accelerate further. However, even after the increase, the new minimum wage will amount to only US$1.71 per hour—substantially lower than the US federal minimum wage of US$7.25 per hour.
Source: (Mexico Business News)
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