In 2023, employers in Mexico will not be able to pay less than 207.44 pesos daily to the workers and workers who produce the goods or services they offer. But if they are in one of the 43 border municipalities of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León and Tamaulipas, the minimum floor for remuneration will be 312.41 pesos a day.
The new increase to the General Minimum Wage (SMG) was announced by the Ministry of Labor and Social Welfare (STPS) last Thursday and will enter into force on January 1. The increase was 20% to the minimum amount of 172.87 pesos that are paid in this 2022 in most of the country and to 260.34 pesos in the Northern Border Free Zone (ZLFN).
Professional minimum wages will also be 20% higher next year. In almost the entire country, the minimum wages of 61 professions and trades They will be located in a range between 214 and 250 pesos per day.
These amounts are a reference, companies can pay more, but not less than that. Article 90 of the Federal Labor Law (LFT) points out that the minimum wage “is the lowest amount that the worker should receive in cash for the services rendered in a day.”
The Congress of the Union reformed said article of the LFT in 2021 and added that the annual setting of minimum wages can never be below inflation. “Do you know since when the minimum wage did not increase in this proportion? For more than 40 years,” said President Andrés Manuel López Obrador on the day of the announcement.
Here are some basics of the definition of the minimum wage:
» Why have the increases been greater in recent years?
Minimum wages are adjusted every year, but the increases in the last five years have been the most significant, as they are part of a policy of recovery of purchasing power implemented by the present federal administration.
For example, from 2017 to 2018, the SMG rose only 8 pesos, from 80 to 88 pesos, which implied an advance of 10 percent. But for 2019 it grew from 88.36 to 102.68 pesos, an increase of 16%. Since then, the increases have remained at that rate. In 2020, it was 20%; for 2021, 15%; by 2022, 22%, and by 2023, 20 percent. In this way, the general referent will have passed from 88.36 to 207.44 pesos in five years.
» Who decides how much the increase will be each year?
This decision is made by a tripartite body, the Council of Representatives of the National Minimum Wage Commission (Conasami). It is made up of spokespersons for unions and workers’ centrals, representatives of business associations and the federal government.
Conasami, which is part of the federal public administration, provides studies for decision-making. It also leads the government’s salary policy, which has been the recovery of the purchasing power of this referent and which is expected to conclude the six-year term at a level close to 215 pesos per day.
» Does the increase in the minimum wage cause inflation?
The 20% increase announced for 2023 “it is neither the promised paradise, nor the diagnosed hell,” says Jorge Sales Boyoli, president of the National Human Capital Technical Committee of the Mexican Institute of Finance Executives (IMEF), in an interview.
“It would not have to affect inflation” and there is evidence, he says. In the period from 1952 to 1970, at the time of the so-called Mexican Miracle, the salary grew 140% and it did not trigger the price of the products, he points out. “It is proven with economic data that as long as inflation is maintained, the minimum wage can grow.”
Since 2016, the minimum wage was deindexed as a reference for the payment of different services and fines, as well as the calculation for federal budgets. This measure was taken, among other reasons, to allow it to make real progress each year.
» How beneficial is the increase in the minimum wage?
The increase in the SMG for 2023 will benefit 6.4 million working people. Furthermore, if the minimum wage “is not so minimal, it helps the others to rise. Although it cannot be in the same percentage, because they are different things,” President Andrés Manuel López Obrador said last Thursday after the announcement of the increase.
For example, he added, the average salary of the 21.7 million workers affiliated with the Mexican Institute of Social Security (IMSS) is almost 15,000 pesos per month on average.
In 2018, the minimum wage was enough to buy 6.5 kilos of tortilla, one of the staple foods in the country. With the amount of 2022, 10.2 kilos can be purchased.
In real terms, from 2018 to 2023, the 90% of purchasing power that the SMG had 40 years ago, according to the Ministry of Labor and Social Welfare (STPS).
At the start of this administration, of the 135 countries that set minimum wages, Mexico was in place 80, “I was very low on the table,” says Luis Felipe Munguía, president of Conasami, in an interview.
“But as the minimum wage has been increasing, we have been advancing in that table. With this latest increase, we stand at the 50th placethat is, we have gone up 30 places, which is quite significant”.
In the pandemic, many countries around the world decided not to raise their salaries “and Mexico was the exception. The Mexican minimum benchmark will already be higher than that observed in Paraguay, South Africa o Argentinato name a few cases.
However, “we are not even remotely at the appropriate standards,” says Jorge Sales Boyoli. “With this increase by 2023 it is enough for less than two food basketswhich does not include expenses for education, transportation, gasoline, gas.”
In the calculation of the labor specialist, the salary will be “2,000 pesos below what a family needs. There is still a lot to be done, a minimum range of 8,000 pesos per month is required, but the amount for the following year will be just over 6,300 pesos per month”.
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