Mexico is set to boost its minimum wage next year and push to trim the country’s long work week, marking the leftist administration’s latest moves to help workers in Latin America’s second-largest economy.
Starting in January, the minimum wage will rise 13 percent to 315.04 pesos ($17.27) per day. This adjustment follows an agreement between labor, business and government leaders, Labor Minister Marath Bolanos confirmed.
The daily wage, however, will increase to about 440.87 pesos in parts of northern Mexico near the U.S. border, reflecting the region’s generally higher wage levels.
President Claudia Sheinbaum noted during her morning press conference that this forthcoming increase will bring the accumulated rise in salaries to 154 percent since 2018.
Sheinbaum, who took office just over a year ago, has supported the wage hikes championed by her predecessor and mentor, Andres Manuel Lopez Obrador, arguing they have helped reduce poverty significantly.
Concerns about the economy
Sheinbaum on Wednesday said the decision had been taken after consulting with the finance ministry and the central bank, as well as with the business community. She has pushed back against critics who argue that a new double-digit boost will harm consumers by pushing prices higher.
“For years it was said that the minimum wage couldn’t go up, that it would cause inflation, that there would no longer be investment in the country, foreign investment — and we are at a record level of foreign investment,” Sheinbaum said during the conference.
Some analysts, as well as Central Bank Deputy Governor Jonathan Heath, have warned that bringing the minimum wage too close to the median salary could fuel inflation, even though annual headline inflation is currently within a percentage point of the bank’s 3 percent target, after a series of interest-rate cuts since early 2024.
The measure comes after Mexico’s economy contracted 0.3 percent in the third quarter, as a slowdown in industrial activity drove the economy’s first year-on-year quarterly decline since 2021.
Mexico’s economy has been weighed down by the impact of U.S. President Donald Trump’s on-again, off-again tariffs and uncertainty over the upcoming review of the United States-Mexico-Canada trade agreement (USMCA) next year.
Long working hours
The government on Wednesday also said it was sending a bill to Congress to incrementally trim the working week from 48 hours a week to 40 hours per week by 2030. If passed, the official working week limit would be reduced two hours a year starting in 2027.
The 40-hour work week was a key promise during Sheinbaum’s 2024 campaign, but has been stalled amid pushback from business leaders.
The average Mexican worker worked 2,193 hours in 2024, significantly more than workers in any other OECD country, according to OECD data.
