Mexico’s minimum wage was raised on Jan 1, 2021 to $141.70 pesos per work day, a 15% rise on the 2020 level of $123.22. The rate for 2020 along the Northern Border Zone was raised to $213.39 pesos per work day, a rise of 15% on the 2020 rate of $185.56.
In years past the minimum wage had been raised more-or-less in line with inflation, to avoid a wave of wage demands that could cause a spiral of increases in prices and wages which would eventually have the most impact on the poorest people. The problem was that the minimum wage has for years been so low that it isn’t enough to for a single person to live on, never mind a whole family.
The uncoupling of minimum wage to official prices
The decision to start raising the minimum wage more than other wages in a bid to even-up earnings took several years to implement. First it was necessary to uncouple thousands of official prices —including things like speeding fines and home loans— which for years were determined in multiples of the minimum wage. For example, a big increase in the minimum wage level would have made hundreds of thousands of mortgages from the government-run agency Infonavit unaffordable. The process of creating a new unit of value to replace the minimum wage for those prices took more than a year. There was also a need to take into consideration studies on the possible effects that the change would have on wages and employment. In 2016, Mexico introduced the Unidad de Medida y Actualización (UMA) to enable minimum salaries to rise without adversely affecting other official costs and charges.
See also: The effect that minimum wage and UMA have on applications for legal residency in Mexico
Mexico’s Minimum Wage 2016-2021
- In 2016 the minimum wage as $73.04 pesos per work day;
- in 2017, the minimum wage rose about 9% to $80.04 pesos per work day;
- in 2018 it rose just over 10% to $88.36 pesos per work day;
- in 2019 it rose a further 16% to $102.68 pesos per work day;
- in 2020 it was increased 20% to $123.22 pesos per work day; and
- a rise of 15% took effect from January 1, 2021, making the current minimum wage $141.70 pesos per work day.
Northern Border Zone: In 2019, Mexico introduced a ‘Border zone’ minimum daily rate of $177.72 pesos a day, and this rose to $183.56 pesos a day from Jan 1, 2020, and rose again to $213.39 pesos per work day as of January 1, 2021. The Border zone is a defined set of municipalities in Mexican states bordering the USA.
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