Abstract

FUENTES, Noé Arón; BRUGUES RODRIGUEZ, Alejandro; GONZALEZ KONIG, Gabriel  and  CARRILLO VIVEROS, Jorge. The Economic Impact on the In-Bond Industry and on the Northern Border Region of Mexico due to the 100% Increase of Minimum Wage. Región y sociedad [online]. 2020, vol.32, e1230.  Epub Aug 07, 2020. ISSN 2448-4849.  https://doi.org/10.22198/rys2020/32/1230.

The aim of this investigation is to measure the effect on the border region economy due to the minimum wage increase. The increase was draw from the border free zone announcement at early 2019. Measurement has its basis on the input-output Park’s model (2006) and on the input-output matrix own estimation for the region. For the evaluation it was considered the 100% minimum wage increase, which favored around 635 thousand workers -146 thousand from the in-bond industry and 485 thousand in the rest of the economic sectors. The results coming from the model show a 2.9% inflation increase. It is expected a downward adjustment: 1% in production, 1.7 in employed personnel; and 1.1% in the added value, all related to that increase. In-bond industry, particularly, is less sensitive to those key variables, due to the average salary paid in that industry is nearer to established minimum wage. In addition to that, there is a positive impact in the income of those in-bond industry workers earning minimum wage because now they receive 6.8% more money and the other working sectors receive 9.7% more money. Considering the last said, regional labor policy is a low inflationary effects and steady reduction measure for the economic activity, but it enhances purchasing power of those who earn less.

Keywords : minimum wage; in-bond industry; input-output.

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