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Despite historical increases in minimum salarythe salary distribution in Mexico it has deteriorated with respect to its pre-pandemic levels, indicates a BBVA Research report. As the labor market has recovered its jobs lost due to the effects of the health emergency, low-paid jobs have also grown.

“Compared to February 2020, they have incorporated 2.2 million people to the Employed Population (PO). Jobs of up to 1 minimum wage grew 6.6 million workers, in contrast, 2.8 million jobs have been lost from 2 to 3 minimum wages, 1.4 million in the category of 3 to 5 minimum wages and 688,000 workers who earn more than 5 wages minimal,” the report highlights.

Luis Felipe Munguía, president of the National Minimum Wage Commission (Conasami), explained that as the minimum wage has increased, the National Occupation and Employment Survey (ENOE) has been reporting an increase in people in the highest wage profiles. low. For example, a person who earned 10,500 a month in 2021 was in the range of between 2 and 3 minimum wages, raising the reference in 2022 is now in the range of one to two minimum wages.

However, the BBVA Research analysis shows that while the employed population that receives up to minimum wage has grown by 6.6 million people, the accumulated decrease in the rest of the salary ranges is 5.3 million jobs.

“The increases in the minimum wage have been relevant to recover its purchasing power, but we see it unlikely that they will have negative effects on inflation, due to the deterioration of the wage distribution,” the analysis highlights.

In that sense, the wage mass in Mexico it is 3% above its pre-pandemic level, but this growth is linked to a stronger creation of job opportunities with incomes of up to the minimum wage. “The recovery of the labor market has been characterized by the generation of low paying jobs and the loss of jobs with more than 2 minimum wages”, point out analysts David Cervantes and Christian Admin De la Huerta, authors of the report.

Since 2019, the minimum wage has had historical increases as part of the new salary recovery policy. With the last three adjustments, the benchmark has gone from 88.36 to 172.87 pesos daily throughout the country, with the exception of the Free Zone of the Northern Border (ZLFN) where the minimum remuneration floor is 260.34 pesos.

Recognize increases in the minimum wage

According to the Economic Commission for Latin America and the Caribbean (ECLAC), Mexico leads the region in real increases in minimum wages and despite the negative effects of inflation on these, it is one of the five economies in the region where real increases in the minimum wage were observed despite historical increases in prices. However, in the rest of the region the reality was different.

At the regional level, the international organization highlights, the inflation observed last year affected to a greater extent minimum wages of the area, since since 2018 they had a positive evolution due to a context of controlled price increases, but in 2021 that trend was broken.

“In particular, the fall of the purchasing power of minimum wages is associated with the rising path of inflation, since the adjustments are usually based on past inflation. The average change in real minimum wages at the regional level tended to slow down in the second half of 2020 and to be increasingly negative in 2021, as half-year inflation increased”, ECLAC points out in its new report Labor Situation in Latin America and the Caribbean, prepared in conjunction with the International Labor Organization (ILO).

For this year, the international organizations foresee that the accelerated inflation could have negative consequences for the labor markets in two ways. The first impact could be reflected in a slow job creation due to the increase in global costs for companies; the second, in a greater deterioration of the real income of workers“which could discourage the recovery process of participation, not to mention its effect on purchasing power and well-being”.


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