Mexico’s 2022 federal minimum wage increase is expected to benefit more than 6 million workers

On December 1, Mexico's National Minimum Wage Commission (CONASAMI) came to an agreement with the country's labor unions and private sector to increase the federal minimum wage by 22% by 2022.

OVERVIEW

On December 1, Mexico's National Minimum Wage Commission (CONASAMI) came to an agreement with the country's labor unions and private sector to increase the federal minimum wage by 22% by 2022. As a result, the Free Zone of the North Border will go from 213.39 to 260.34 pesos per day, while the rest of the country will see an increase from 141.70 to 172.87 pesos per day.


The Ministry of Labor and Social Welfare (STPS) expects the minimum wage’s increase to have a positive impact for more than 6 million workers.


In December 2020, the federal government was able to reach an agreement to raise its federal minimum wage by 15%, despite the fact that it was during the peak of the COVID-19 pandemic in which many companies were suffering from a weakened economy.


The CONSAMI highlighted that this is the highest nominal increase since 1987, reaching the level of purchasing power that was had in 1985. To reach the final minimum wage amount, the CONSAMI took into account three main factors: the current minimum wage, the Independent Recovery Amount (MIR), and the increase by fixation.


The MIR is a measure that began to be applied in 2017, after the de-indexation of the minimum wage from aspects such as fines from previous years. This amount is absolute in pesos and is used so that minimum wages gradually recover their purchasing power. It is only a reference for the federal minimum wage, not other salaries.


The increase by fixation is the increase due to inflation. In March of this year, Mexico’s federal Congress amended the Federal Labor Law (LFT) to establish that increases in the minimum wage must always be above the annual increase in consumer prices, therefore, this percentage will always be variable.