Abstract

MORENO-BRID, Juan Carlos; GARRY, Stefanie  and  MONROY-GOMEZ-FRANCO, Luis Angel. The Minimum Wage in Mexico. Economía UNAM [online]. 2014, vol.11, n.33, pp.78-93. ISSN 1665-952X.

For some years the minimum wage has been the subject of considerable debate in financial newspapers, academic journals, legislative chambers, employers' associations and trade unions, both in developed and in developing countries, including recently in Mexico. It has come to be considered as a legitimate and important instrument of economic policy to promote equality and raise incomes, especially for the poorest workers. While the debate continues about its effects on employment, informality and inflation, the document highlights the various points of agreement on the issue in Mexico. In real terms, Mexico's minimum wage, the lowest in Latin America, has experienced a sharp decline over the last decades, to the point that its current level does not meet the provisions of the Constitution, and does not provide workers with a viable route out of poverty, especially when purchasing power parity is taken into account. There is also consensus that it is necessary to decouple the minimum wage as a reference for multiple transactions outside the workplace. Following the analysis of the experience of Mexico, it is argued that the transfer of the benefits of labor productivity to workers is not automatic or guaranteed, given that Mexico has some of the highest levels of labor productivity and competitiveness in the region, however, the level of the minimum wage is among the lowest. While it is important not to forget the importance of productivity and competitiveness in the discussion of the minimum wage, it is equally, if not more important to remember that the transfer of benefits to minimum wage workers is not possible without specific economic and labor policies to do so. Ultimately, this paper argues that a new minimum wage policy for Mexico goes beyond being a merely technical matter; rather, it is a matter of political economy that reflects the weight of equality in the society we want and can build.

Keywords : Usage; Employment; Regional Labor and Markets.

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