.svg)
Image caption here
A Comprehensive Guide on Minimum Wage in Mexico
The minimum wage in Mexico has increased by 20% in 2024. This year is the sixth consecutive year of a rise in the minimum wage. This significant change, reported by AP, is expected to affect one-third of the country's registered workers earning the minimum wage.
Understanding these changes is crucial for manufacturers to maintain their status. The increase in the minimum wage in Mexico comes with its own set of challenges and opportunities. It also requires a strategic approach to minimum wage management and employee relations.
This article explains the increase in minimum wage in Mexico. It explores how it may reshape labor costs for manufacturers in Mexico, underlining the importance of proactive and thoughtful adaptation to remain at the forefront as employers of choice.
Overview of Mexico
Official name: “United Mexican States”
Spanish is the official language alongside over 68 indigenous languages.
Currency: “Mexican Peso”
Territory:
- North: 32 ° 43 '06" north latitude, at Monument 206, on the border with the United States of America (3,152.90 kilometers).
- South: 14 ° 32 '27" north latitude, at the mouth of the river Suchiate border with Guatemala (1,149.8 kilometers).
- East: 86 ° 42 '36" W, in the extreme southwest of Isla Mujeres.
- West: 118 ° 27 '24" W, in the Point Elephant Rock at the Guadalupe Island, in the Pacific Ocean.
Mexico City is the capital of Mexico, which accommodates the ruling government. The Mexican state consists of 32 divisions, also called states: “Aguascalientes”, “Baja California”, “Baja California Sur”, “Campeche”, “Coahuila”, “Colima”, “Chiapas”, “Chihuahua”, “Durango”, “Mexico City”, “Guanajuato”, “Guerrero”, “Hidalgo”, “Jalisco”, “Mexico”, “Michoacan”, “Morelos”, “Nayari”, “Nuevo León”, “Oaxaca”, “Puebla”, “Queretaro”, “Quintana Roo”, “San Luis Potosi”, “Sinaloa”, “Sonora”, “Tabasco”, “Tamaulipas”, “Tlaxcala, Veracruz”, “Yucatán”, and “Zacatecas”.
Population: The Mexican population is 127 million.
Government: Mexico is governed by a Representative Republic, Democratic, and Federal Government composed of free and sovereign in all matters relating to their internal Government but united in a Federation.
Impact of Minimum Wage in Mexico
The minimum wage in Mexico affects many sections of society. It helps low-income workers get fair compensation in return for their labor and helps a large chunk of people meet their basic needs. The lack of a minimum wage in Mexico leads to significant income inequality and forces talented and potential growth, driving the workforce into poverty.
Note: If you are looking for global payroll services, contact us for more information.
A Significant Increase in the Minimum Wage in Mexico
The minimum wage in Mexico is transforming with the significant increase in the general minimum wage announced by the National Minimum Wage Commission. The prevailing minimum wage has been adjusted from MXN 207.44 to MXN 248.93, which is approximately USD 13.83 per day.
Similarly, the minimum wage in Mexico has been revised in the Northern Border economic free zone, a critical area within an expansive stretch along the Mexico-U.S.
President Andrés Manuel López Obrador's persistent efforts to increase the minimum wage in Mexico from MXN 88 to MXN$ 260 have to reach their maximum potential by the end of their term in 2025. For reference, in USD, it is from USD 4.89 to $ 14.44.
Presently, the minimum wage in Mexico applicable in the Free Zone of Northern Border is $248. Based on various considerations, it is set to increase by at least $27, almost reaching the President's target.
On Nov. 30, 2023, the National Minimum Wage Commission (CONASAMI for its acronym in Spanish) unanimously agreed to increase the minimum wage in Mexico, from Jan. 1.
The minimum wage in Mexico was raised as follows:
- In the northern border-free zone, there was a 6 percent percentage increase, plus MXN 41.26 as an Independent Recovery Amount (MIR is the acronym for its name in Spanish), raising the minimum wage from MXN 312.41 to MXN 374.89 per day.
- In the rest of the country, there was a 6 percent percentage adjustment, plus MXN 27.40 as MIR, raising the general minimum wage from MXN 207.44 to MXN 248.93 per day.
This increase was achieved through consensus among employers, unions, and the federal Government and represents a 20 percent global rise in the general minimum wage in Mexico.
This wage increase comes in the context of a slowdown in inflation in Mexico during 2023, reaching levels of approximately 3.4 percent for the last quarter. It is expected that inflation will continue to decrease in 2024.
With this minimum wage in Mexico increase, the aim is to continue improving the economic conditions and purchasing power of workers in Mexico, getting closer to the wellness line determined by the National Council for the Evaluation of Social Development Policy (CONEVAL is the acronym for its name in Spanish).
Minimum Wage in Mexico Summary
The minimum wage in Mexico has significantly increased from MXN 88 to MXN 248 to meet the growing market demands as well as employment policies.
It is still pretty low when compared to the cost of living, but it's still difficult to ignore how it is growing at a rapid rate.
Global Expansion specializes in global staffing and Employer-of-record processes and helps companies and job seekers be more well-informed about the regulatory processes of different countries and regions.
Get in touch with us to discover a better, faster way to build global teams.
