December 11, 2020

MEXICO CITY (Reuters) – Mexico’s Senate on Thursday approved a proposal to keep minimum wage increases above inflation, just as the president pitched another sizeable hike next year, part of his government’s drive to reverse a decades-long slide in workers’ purchasing power.

The salary proposal, approved unanimously by senators who voted, calls for adjusting a federal labor law to keep any minimum wage increases from dipping below inflation. The reform will now pass to the lower house of Congress for consideration.

President Andres Manuel Lopez Obrador, who has vowed to prioritize the poor in a country with huge wealth disparity, said the government wants to hike the minimum wage next year by 15%.

The minimum wage is currently 123 pesos ($6.15) a day nationwide, except in a zone along the northern border with the United States, which pays up to 186 pesos ($9.30) a day.

Lopez Obrador’s administration last year increased the minimum wage 20%, and the year before that, 16%.

Still, Mexico ranks last among countries in the Organisation for Economic Co-operation and Development (OECD) for minimum wage levels.

“Look, isn’t this a shame,” Lopez Obrador said at his regular news conference, pointing to Mexico’s position compared with other nations. Globally, Mexico ranks 82 for its minimum wage, according to figures from the Mexican government.

The government’s minimum wage commission has until the end of December to establish the 2021 minimum salary.

($1 = 19.9940 Mexican pesos)

(Reporting by Ana Isabel Martinez, Diego Ore, Noe Torres and Daina Beth Solomon; Editing by Christopher Cushing)

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