Mexico has raised the daily minimum wage for workers by nearly 10%, from 73 to 80 pesos (about 4 USD), relieving the pain of low-wage workers worried about increasing consumer prices.
Although the move is designed to stoke the buying power of the workforce, analysts say it might also hurt micro and small businesses struggling in the wake of rising fuel costs, higher interest rates, and a weakening peso.
Reports say that just about every member on the country’s Minimum Wage Commission voted in favor of raising the daily minimum wage.
This has no doubt brought some respite for common citizens after the government raised the price of gasoline by as much as 20% to $0.88 dollars per liter. Fuel prices may go down in the months to come, because the government is reforming the energy sector and trying to end the monopoly of Pemex.
Despite the rise in both wages and fuel prices, no economist has predicted that inflation in Mexico would exceed 4% this year, but most of the analysts say the lowest wage earners might see a 4% to 5% increase in their salary.
According to reports on Spanish media, about 6.9 million people in Mexico’s 50.7 million-member workforce earn the minimum wage.
The minimum wage in Mexico is still far below the wages in the neighboring United States, where labors earn an average of $10 an hour.
Mexico’s talented and hard-working workforce has long been a draw for foreign investors expanding operation into the country. Last year, the country’s unemployment rate decreased to a record 3.6% of the workforce.