Policy Overview and Its Impact
The minimum wage recovery policy has positively reduced labor poverty, but it approaches a point where it may strain company salary structures and formal job creation. The policy aims to equate basic remuneration with 2.5 basic baskets by 2030 through continuous wage increases.
By 2026, the general minimum wage will reach 9,582.47 pesos per month. In the Zona Libre de la Frontera Norte (ZLFN), the reference will be 13,409.80 pesos per month. The Comisión Nacional de Salarios Mínimos (Conasami) estimates that this policy will benefit 8.5 million people next year.
Success in Reducing Labor Poverty
Over 13 million people escaped labor poverty in the previous six-year term. The Conasami estimates that half of this reduction is due to minimum wage increases.
Rogelio Gómez Hermosillo, executive president of Acción Ciudadana Frente a la Pobreza, dismissed the notion that minimum wage hikes negatively affect job creation.
“There is no macroeconomic impact on prices or job creation because what is being done is to cover a lag, hence the term ‘gradual recovery’,” he emphasized.
Key Factors for Wage Recovery
Among the key factors for wage recovery is the detachment of the minimum wage from obligation calculations, such as penalties. The creation of the Monto de Recuperación Independiente (MIR) – an absolute amount in pesos added to the previous minimum wage before applying a percentage increase – has also played a crucial role.
“It has fulfilled its function. The minimum wage has notably recovered, and there hasn’t been a similar increase in other salaries,” stated Rodolfo de la Torre, an independent economist and consultant.
Warning Signs in the Labor Market
Although wage increases have not yet caused distortions, the current level triggers warning signals in the labor market due to its proximity to professional salaries.
If the trend of adjustments continues, AON estimates that by 2028, the general minimum wage will match average market salaries. This is because professional remunerations will grow at a slower rate than the reference salary.
This scenario poses challenges for company salary structures, affecting their ability to attract and retain talent. “It reaches levels that were previously a natural differentiator between operational or semi-skilled positions and other hierarchy levels within a company… and it becomes more complex to recruit. Candidates reject offers because there is no real differential,” Arleth Leal, co-founder of the Colegio de Innovación en Recursos Humanos (CORH), opined.
Concerns for Formal Job Creation
There are also warning signs for formal job creation. “Without additional support, such as increased sales, income, productivity capacity, or investment margins, you won’t generate formal employment,” Sofía Ramírez, director of México, ¿Cómo vamos? (MCV), stated.
From Rodolfo de la Torre’s perspective, the minimum wage is advancing “without certainty that there won’t be adverse effects” on inflation, informality, and job creation.
Key Questions and Answers
- What is the minimum wage recovery policy? It’s a policy aiming to gradually increase the minimum wage to match 2.5 basic baskets by 2030, reducing labor poverty.
- How many people have benefited from this policy? Over 13 million people have escaped labor poverty since its implementation, with the Conasami estimating half of this reduction is due to minimum wage increases.
- What are the warning signs in the labor market? As the minimum wage approaches professional salary levels, there are concerns about its impact on company salary structures and formal job creation.
- What are the challenges for companies? The proximity of the minimum wage to professional salaries may strain company salary structures, affecting their capacity to attract and retain talent.
- What are the concerns for formal job creation? Without additional support, such as increased sales or productivity, the minimum wage policy may not effectively generate formal employment.
