Minimum wage has six years of double-digit growth

By consensus with the sectors we have been recovering the purchasing power that was lost for 40 years; With the increase we will have recovered 90% of the purchasing power compared to 2018 to 2023”.

Luisa María Alcalde Luján, head of the STPS

The minimum wage in the country will have an increase of 20% in 2023; so the general minimum will go from 172.87 to 207.44 pesos per day; while that of the Northern Border Zone will go from 260.34 to 312.41 pesos per day, which will benefit 6.4 million workers.

This is the sixth double-digit nominal increase and the second largest along with that of 2020 (also 20%), only behind that granted for this year (22 percent).

Summoned at 7:00 in the morning at the offices of the National Minimum Wage Commission (Conasami) on Avenida Cuauhtémoc, the representatives of the employer and worker sectors finished fine-tuning the agreement that would later be presented by the Secretary of Labor and Social Welfare , Luisa María Alcalde Luján, having President Andrés Manuel López Obrador as a witness in the morning conference.

The salary increase is confirmed by the Independent Recovery Amount (MIR), which in the case of general salaries was 15.72 pesos plus a 10% increase. Meanwhile, in the Northern Border Free Zone, the MIR was 23.68 pesos and a 10% direct increase in salary.

The MIR is the amount in pesos that is granted in pesos directly to the salary, and it was used for the first time in 2017; it is intended to recover the purchasing power of minimum wages and is not used as a reference to set other current wages such as contractual, federal, state, or municipal wages.

It should be noted that with the analyzes that have been carried out at Conasami, its president, Luis Murguía, commented that, since the labor cost of companies is 8% in total, raising the minimum wage is 1.8% of the labor cost, “and therefore the final cost of raising the minimum wage is 0.14%”; Therefore, it is not expected that there will be an inflationary effect.

In this regard, President López Obrador said that “it is a very important advance, very very important and we celebrate it; This is very good news for Mexicans. Do you know since when the minimum wage did not increase in this proportion? For more than 40 years.”

In this sense, he thanked the labor sector and the business sector, who, together with the federal government, reached consensus to reach this determination.

In turn, Mayor Luján stressed that “by consensus with the sectors we have been recovering the purchasing power that was lost for 40 years; With the increase we will have recovered 90% of the purchasing power compared to 2018 to 2023”.

He stressed that this measure benefits 6.4 million workers, and this will give dynamism to the local economy and the internal market, since not only workers are supported, but also their families. He said that once it is published in the Official Gazette of the Federation (DOF) it will be a mandatory mandate, starting on January 1, 2023.

In 2019 the salary increase was 16.2%; by 2020 it reached 20%; in 2021 it was 15% and 22% in this 2022, that is, in 4 years from 88 pesos it went to 173 pesos per day.

The nominal increase so far in the six-year term (2018-2022) is 95.6%, while the real one is 60.1 percent. When considering the improvement for 2023, the accumulated nominal increase during the six-year term would reach 134 percent.

In this regard, José Luis Carazo, representative of the workers, said that “to see that today we have a minimum wage that exceeds 200 pesos, for the worker sector it represents historical justice because we were lagging behind our counterparts around the world.”

Alejandro Avilés, labor specialist and Conasami Representative, maintained that “despite the fact that the employer sector resisted the increase, they had to accept, even though they asked that it not be in double digits; however, 10 percent was achieved.”

positive reactions

Legislators expressed their approval of the increase, “although it remained 10% below, especially if the inflationary process continues to increase, then it would have to be reviewed in half a year; but, it’s okay, it respects the margins of the increase above the inflationary percentage, it’s okay for the first two months of 2023,” said deputy Susana Prieto Terrazas.

Meanwhile, Ricardo Monreal, president of the Political Coordination Board of the Chamber of Senators and coordinator of the Morena parliamentary group, congratulated the President “for promoting the 20% increase in the minimum wage, which will benefit 6.4 million Mexican workers. Never, in 40 years, had there been an increase in this proportion. This is an achievement for the workers.”

Pressure for revisions

Fernando Yllanes, a member of the Council of Representatives, maintained that the employers made an important effort, and given that the contractual revisions are coming, he called on the union organizations so that their salary demands are in line with the economic conditions.

Meanwhile, Germán de la Garza de Vecchi, leader of Labor Services at Deloitte Mexico, commented that “collective negotiations are going to be strongly pressured by this increase, since unions use it as a reference to set their annual demands.”

Bustamante added that “there could be an effect of greater pressure towards the revisions of the contractual salaries that somehow with the 20% increase in the minimums are highly reached in the salaries of their own contracts and this could generate pressure on the trading a little higher for 2023; It will be necessary to see how it behaves, but we believe that it must be done responsibly as the factors of production have done”.

pilar.martinez@eleconomista.mx