What’s the minimum wage in Mexico? Understanding the 2024 Updates
What’s the minimum wage in Mexico? First, to be clear, in many countries around the world, the minimum wage is adjusted annually.
To know What’s the minimum wage in Mexico, we need to understand how this aspect has evolved over the past few years.
It is worth mentioning that the minimum wage in Mexico is the minimum amount a worker must receive for the work they do every day.
This is governed by the Federal Labor Law, and its adjustment is crucial for millions of workers in the country.
To understand this, we need to grasp the concept of the minimum wage.
The minimum wage is the minimum daily payment that employers must give their workers for their services during a working day.
In Mexico, the National Minimum Wage Commission (CONASAMI) is responsible for setting these amounts, based on economic studies and consultations with business and labor sectors.
To determine the minimum wage, a study is conducted according to inflation, the cost of living, and the general economic conditions of the country.
When setting the final amount, it is expected that it will be sufficient to meet the material, social, and cultural needs of families.
If you want to know more about Mexico, you can consult the following article: Is There Amazon in Mexico?
An important element to consider is that the current administration of Andrés López Obrador has established significant variations in the wage, and little by little, it has positioned as one of the highest minimum wages in Latin America.
Despite these measures, it remains insufficient to meet the basic needs of any citizen in this country.
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Minimum wage rates effective as of January 1, 2024.
It is important to highlight that in Mexico, the minimum wage is different in the Northern Border Free Zone (ZLFN) and the rest of the country.
The ZLFN comprises 43 municipalities in the states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and Tamaulipas, where the minimum wage is higher due to various economic and geographic factors affecting the region.
In this area, the cost of living is significantly higher, partly due to its proximity to the United States, which raises the prices of goods and services.
These particular conditions justify the need for a higher minimum wage in the northern region of the country to ensure that workers can maintain an adequate standard of living.
What’s the minimum wage in Mexico?
In Mexico, as of January 1, 2024, the monthly minimum wage is $7,468.00 for almost the entire national territory.
But What’s the minimum wage in Mexico for the Northern Border Free Zone?
According to the law, it is $11,246.00.
The daily minimum wage is set at $374.89 for the Northern Border Free Zone and $248.93 for the rest of the country.
These amounts represent a 20% increase compared to last year to improve the living conditions of workers in the face of rising living costs.
What are the amounts and calculations for the minimum wage in Mexico?
To calculate the daily or monthly minimum wage, it is necessary to understand various aspects according to labor legislation.
The calculation of the monthly minimum wage is done by multiplying the daily wage by the number of working days.
Thus, if you work in the Northern Border Free Zone, your calculation would be $374.89 times 30 days, which equals approximately $11,246.70 per month.
Minimum wage in Mexico vs. minimum wage in the Northern Border Free Zone:
The differences in workers’ incomes are reflected in the daily minimum wage that a worker must receive for each of these occupations according to CONASAMI, depending on whether they are in the Northern Border Free Zone or the rest of the country.
- Additionally, it is important to consider payroll portability, which allows you to have your money in a bank that facilitates efficient management of your resources.
- Moreover, the northern border of Mexico has various factors related to the cost of living and high violence; it is an area full of trafficking groups.
- This has forced the government to offer special guarantees, such as tax reductions and other economic facilities.
- On the other hand, besides consistent fiscal benefits, the doubling of the minimum wage and the equalization of energy prices with the southern states of the United States, a strip of 25 kilometers south of the border with the United States was created, making it the largest free zone in the world.
On the federal government’s website, it can be read that the Northern Border Free Zone serves as a barrier to prevent people from emigrating and allows Mexicans to work in their country.
Evolution of the Minimum Wage in Mexico
We continue investigating What’s the minimum wage in Mexico, and for this reason, we delve a bit into its evolution over the past few years.
According to specialist Maryela Aguilar, in the last four years, the minimum wage has increased substantially after having remained stagnant for many years.
Until 2017, the real wage had remained stagnant due to the containment policy that different administrations had implemented until then.
Despite this, since 2018, increases in the minimum wage began as part of the wage recovery policy. Since then, the real minimum wage has increased by 26%, according to figures from the Secretariat of Labor and Social Welfare.
It is key to understand what some analysts see as the real and weighted minimum wage. The real minimum wage is obtained by discounting the effect of inflation and is calculated by dividing the nominal wage by the national consumer price index.
Meanwhile, the weighted minimum wage is the result obtained from the average bi-weekly tabular salary of the last 10 years, updated with the National Consumer Price Index, that is, the average income.
What’s the minimum wage in Mexico since 2006?
When he assumed the presidency in 2000, Vicente Fox inherited a complex economic situation. In 2001, the minimum wage in Mexico was approximately 45.24 pesos per day.
By the end of his six-year term in 2006, it had increased to around 47.80 pesos per day.
During Felipe Calderón’s government, the Mexican economy faced the global financial crisis of 2008. In 2007, the minimum wage was around 48.67 pesos per day, and by the end of his term in 2012, it had increased to approximately 62.33 pesos per day.
With the PRI back in power under Enrique Peña Nieto’s administration, structural reforms were sought to boost economic development.
At the start of his government in 2013, the minimum wage was approximately 63.77 pesos per day. By the end of his term in 2018, it had reached around 88.36 pesos per day.
In 1990, when the wage was calculated monthly rather than daily, it was 11,900, while in the ZLFN, it was 9,920.
By 1995, the minimum wage in Mexico was 20.15 per day, while in the ZLFN it was 17 pesos per day. In 1952, the minimum wage in Mexico was 6.70 per day.
Now that we know what the minimum wage in Mexico is, it would be interesting to understand its impact on employers.
Impact on Employers
For employers, there will always be an effect, and for this reason, sometimes governments apply control measures on basic basket products.
The effects of the minimum wage increase are sometimes referred to as the “lighthouse effect.”
Various organizations name the consequences of the minimum wage increase in a country as the “lighthouse effect.”
This effect has various consequences and, being linked to the minimum wage, is indivisible from the country’s inflation.
According to the ILO, the Bank of Mexico, UNAM, and INEGI, these are the main characteristics of the “Lighthouse Effect,” which will also have a greater impact due to the financial situation caused by COVID-19:
Workers associate the increase with a rise in the cost of basic products and, therefore, request a proportional increase.
The need to increase the minimum wage may lead companies to increase the prices of their products and services.
Formal jobs may be reduced with the intention of the company “saving” a bit.
In case the company does not have financial stability, it may be forced, in some cases, to close.
