• Mexico increases minimum wage by 10.4% to 88.36 pesos (US$4.70) from 80.04 pesos.
  • May please US and Canadian negotiators of NAFTA; low salary is seen as unfair competition.
  • The Mexican Employers Federation says the increase is "halfway progress."
Mexico has come under criticism during NAFTA negotiations for its poor working conditions

Mexico has come under criticism during NAFTA negotiations for its poor working conditions

Mexico has increased its daily minimum wage in a move that will likely please US and Canadian negotiators of the North American Free Trade Agreement (NAFTA) who saw the country's low salary as unfair competition.

The country's Wage Commission this week increased the minimum wage by 10.4% to MXN88.36 (US$4.70) per day from MXN80.04 previously. The increase, which is above the country's current inflation rate of around 6.4%, will come into effect from 1 December.

Mexico has come under criticism during the ongoing NAFTA renegotiations for its poor working conditions, which the US and Canada have said allow the country to benefit, disproportionately, from the trade pact. Across the border, US average wages are around five times higher than those in Mexico.

One of the US administration's objectives in renegotiating NAFTA is to have stricter enforcement of minimum wage laws across North America. The issue, however, has been most prevalent in Mexico.

The Mexican Employers Federation, or Coparmex, had insisted on increasing the minimum wage in order to meet the welfare line established by the National Council for the Evaluation of Social Development Policy, which would have meant raising it to MXN95.24.

Coparmex says the new rate covers 92.76% of the amount necessary to meet the welfare line, calling the wage increase "halfway progress" so that "all people working in the formal economy obtain at least 100% of the sum required to satisfy the food basket and the non-food basket in urban centres."

It adds: "[We] insisted on reaching a National Agreement for a New Wage Culture (ANNCS) that allows a progressive evolution of salaries, preserving stability, and establishing precise long-term objectives, so that Mexico stops being counted among the countries with the lowest salaries in Latin America and with many of the lowest in the OECD."

Coparmex says a new adjustment will be carried out before 30 April next year so that the minimum wage reaches 100% of the wellness line.

Earlier this week, the US set out a revised set of objectives for the renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico – with a focus on transparency and expanded investment.

US sets out revised NAFTA negotiating objectives