Mexico: 4.85% minimum wage increase sacrificing buying power to save jobs

Once again, Mexican unions lost the battle after the meetings of the National Minimum Wage Committee (CONASAMI), which answers to the Labor Ministry and heads negotiations between the social partners on basic remuneration. Government representatives and businesses’ representatives agreed on a moderate 4.85% increase and to give priority to jobs rather than wages. “Better low incomes than layoffs” said a representative for the Mexican Employers’ Organization, COPARMEX. This agreement placed union representatives as a minority and relegated their claims to get a 10% increase to compensate the loss in purchasing power in 2009. The minimum wage increase enforced on January 1, 2010 coincided with a downpour of tax increases, notably VAT, fuel and a bunch of services like public transportation. Besides, inflation should reach 6% if we are to believe the forecasts given by the government and by independent experts. Unions said that the minimum wage increase was a “tease” to workers. Center and left-wing parties, i.e. opposition parties, a majority of MPs, protested with the trade unions. Over the past six years, workers receiving minimum wage saw their purchasing power drop by 22%.
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e to believe the forecasts given by the government and by independent experts. Unions said that the minimum wage increase was a “tease” to workers. Center and left-wing parties, i.e. opposition parties, a majority of MPs, protested with the trade unions. Over the past six years, workers receiving minimum wage saw their purchasing power drop by 22%.

Different increase in different regions and trades. 4.85% is the average increase applied for different categories of minimum wage. Indeed, the incre

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