Mexico’s new president to seek double-digit minimum wage hikes annually

MEXICO CITY (Reuters) -Mexican President Claudia Sheinbaum hopes to increase the country’s minimum wage by around 12% starting next year and for every year after that, she said on Thursday.

The minimum wage in Latin America’s No. 2 economy currently stands at 248.93 pesos ($12.81) a day, after sharp hikes in recent years by the previous administration.

Around 40% of Mexico’s workforce are earning minimum wage or under, according to data from the national statistics agency, as informal labor in the country remains prevalent.

The government will pursue “a wage increase of around 12% for next year and so on, every year around 12%,” Sheinbaum said in a daily press conference.

Mexico’s first woman president, who took office earlier this week, said her government will work to gradually raise the minimum wage to cover the cost of 2.5 basic food baskets, up from the current 1.6. She also announced a package of reforms to bolster women’s rights, including a constitutional guarantee of equal pay for equal work.

Sheinbaum’s plans are in line with that of her predecessor and mentor Andres Manuel Lopez Obrador, who ushered in Mexico’s biggest minimum wage hikes in decades.

The country’s minimum salary rose by 20% both in 2023 and 2024, with the prior administration making good on its promise to drive up workers’ purchasing power.

Sheinbaum also said that her government will look to pass legislation to cut the work week from 48 hours to 40 hours, a measure that Lopez Obrador pursued but failed to pass.

The reform, which would have altered the constitution and needed two-thirds of votes in favor to pass, was supported by the ruling leftist National Regeneration Movement (MORENA) and its allies, but met resistance from businesses and the center-right opposition National Action Party.

($1 = 19.4328 Mexican pesos)