Mexico’s Minimum Wage Reform Boosting Annual Increases to Combat Poverty

Around four in 10 Mexicans earn the minimum wage or less. The reform is meant to cement a floor for annual wage increases, although the previous administration of President Andres Manuel Lopez Obrador backed some of the highest wage increases in decades.

His successor, President Claudia Sheinbaum, has promised annual minimum wage increases of about 12%.

The reform, which already passed in the lower house, had been proposed by Lopez Obrador before leaving office. Congress is currently working through a long list of constitutional reforms sent by Lopez Obrador, including a controversial judicial reform that passed last month.

The minimum wage in Latin America’s No. 2 economy currently stands at 248.93 pesos ($12.80) a day.

Sheinbaum has said her government will work to gradually raise the minimum wage to cover the cost of 2.5 basic food baskets, or a standardized list of common grocery items for two people to live on per day, up from the current 1.6.

“Mexicans’ wages will no longer fall victim to inflation,” ruling party Senator Oscar Canton said. “We urgently need a Mexico where the minimum wage no longer sentences someone to a life of poverty.”

The reform will now be sent to state legislatures for a vote. It is expected to pass in a majority of states.