Labor & Workforce

Mexican president: Minimum daily wage hike won’t harm economy

Mexico City, Dec 17 (efe-epa).- Mexico’s president on Thursday defended the announcement of a 15 percent hike in the minimum daily wage, saying it is fair and necessary and ruling out the possibility of any negative economic impact.

Andres Manuel Lopez Obrador – popularly known as AMLO – made his remarks at a press conference in the northern state of Sonora, a day after Mexico’s National Minimum Wage Commission (Conasami) approved the increase.

“It makes no sense to say this is going to (adversely) affect the economy. The workers don’t count in the economy? What is the economy? It’s the combination of investment, business activity and workers,” AMLO said in response to criticism from business leaders.

“I also think it’s an exaggeration to say that businesses are going to go bankrupt due to that wage increase,” the leftist president said.

He added that attempts to negotiate an agreement between his administration and large companies, which had proposed a 10 percent wage hike, proved unsuccessful.

Conasami on Wednesday approved an overall increase of 15 percent in Mexico’s minimum daily wage, a move backed by government and labor representatives but opposed by the business sector.

With this latest increase, the nationwide minimum daily wage climbs from 123.22 pesos (around $6.10) to 141.70 pesos ($7.08).

It follows earlier wage increases of 20 percent in 2020 and 16 percent in 2019 that also were promoted by Lopez Obrador.

“I regret that no agreement was reached … however, I think the decision that was made was a good one,” AMLO said Thursday.

Defending the increase, he said “workers’ salaries were punished for more than 30 years (and) there were even years when the minimum wage hike was lower than inflation.”

He noted that Mexico’s minimum daily wage ranked 12th-highest worldwide in 1980 but had fallen to No. 81 after several “neoliberal governments,” a reference to predecessors who followed policies recommended by the International Monetary Fund and the World Bank.

Despite sharp increases over the past three years, Mexico’s government estimates that the country only will have moved up to the No. 76 spot globally.

“Workers are going to have an increase that on a global scale still is shameful. How is it that we’re in the G20 group of the world’s largest economies if we occupy the No. 76 position in terms of salary?” AMLO asked rhetorically.

He also demanded an explanation from “those who implemented these policies in previous governments” on the grounds that an increase in the minimum daily wage would cause inflation to skyrocket.

“We’ve been raising the minimum wage for two years and there hasn’t been any (rise in the) inflation” rate, the president said. EFE-EPA

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