The Minimum Wage in Mexico

Abstract

For some years the minimum wage has been the subject of considerable debatein financial newspapers, academic journals, legislative chambers, employers’ associationsand trade unions, both in developed and in developing countries, includingrecently in Mexico. It has come to be considered as a legitimate and important instrumentof economic policy to promote equality and raise incomes, especially for thepoorest workers. While the debate continues about its effects on employment, informalityand inflation, the document highlights the various points of agreement on theissue in Mexico. In real terms, Mexico’s minimum wage, the lowest in Latin America,has experienced a sharp decline over the last decades, to the point that its currentlevel does not meet the provisions of the Constitution, and does not provide workerswith a viable route out of poverty, especially when purchasing power parity is takeninto account.