With the proclamation made about the increase in the minimum wage, ther is much talk about the opportunity to acquire more products from the basic basket.
By early 2025, the minimum wage will increase by 12%, going from $248.93 to $278.80 pesos and it is expected that this will continue to increase until in 2030 2.5 basic baskets can be purchased with it.
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What is the basic basket and what is it for?
According to the government of Mexico,the basic basket,in the economic field,refers to the set of products and services considered essential for the subsistence and well-being of the members of a family.
Its preparation is based on the estimate of the expenditure that a family group must make to satisfy its primary needs. On some occasions the basic basket is limited to food, which is known as basic food basket (CBA) and refers to a group of products that must provide the minimum for the essential nutrition of an adult individual.
How many products does a basic basket include and how much does it cost?
Currently, a basic basket consists of 40 products within the categories of food, cleaning, personal hygiene and complementary goods.
The cost of a basic basket may vary depending on the region of the country and the place (supermarket or commercial establishment) where it is purchased; However, the Federal Consumer Prosecutor’s Office determines that currently, its cost ranges from $754.00 pesos up to $979.40 pesos.
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What products are included in the basic basket?
According to Mexican Food Security (SEGALMEX), a decentralized association, sectorized to the Secretariat of Agriculture and Rural Growth (SADER) that seeks food self-sufficiency in the four basic grains (corn, wheat, rice, beans) and milk, includes the following products in the basket:
- Corn
- Bean
- Rice
- Sugar
- Enriched corn flour
- Edible vegetable oil
- Tuna
- Sardine
- Fluid milk, powder and milk derivative.
- Packaged chilies.
- Instant coffee (with and without sugar).
- Table salt.
- Avena.
- Soup paste.
- wheat flour
- Chocolate.
- Maria, animal and salty cookies.
- Lentils.
- laundry soap.
- Toilet soap.
- Toilet paper.
- Powder detergent.
- Crema dental.
- beef.
- Pork meat.
- Chicken meat.
- Toast.
- Boxed and sweet bread.
- Fresh Egg.
- Dried fish.
- Purified water.
- Amaranth candy, peanut, etc.
- Packaged tomato puree.
- Dehydrated fruits.
- Jamaica and natural tamarind.
- Sugar-free concentrates for processing.
- Jelly.
- Chickpeas, Peas and Soybeans.
The #BasicBasket Segalmex contains essential foodstuffs and also cleaning and personal hygiene products. pic.twitter.com/4lJIy8bHZI
— SEGALMEX (@Segalmex_Mex) January 8, 2020
In all states, it is indeed taken into account that the majority of products marketed as part of the basic basket are produced in the region in which they are marketed and not from distant areas to avoid the use of packaging, also favoring local economies and reducing transfer costs.
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How will the upcoming minimum wage increase in Mexico impact the standard of living for low-income families?
Interview: The Future of Minimum Wage and the Basic Basket in Mexico
Time.news editor (E): Welcome, everyone, to today’s discussion. We’re exploring the meaningful update regarding the minimum wage in Mexico, which will see a 12% increase by early 2025. Joining us is Dr. Lucia Martinez, an economist specialized in labor markets and social policy. Dr. Martinez, thank you for being with us today.
Dr. Lucia Martinez (M): Thank you for having me. I’m excited to discuss this vital topic!
E: To kick things off, can you explain what the basic basket is and why it is indeed pivotal in this conversation about minimum wage?
M: Absolutely. The basic basket refers to a collection of essential goods and services deemed necessary for a household to survive and maintain a minimal standard of living. In Mexico, this includes food staples, household necessities, and utilities. The concept ties closely to the minimum wage because the aim is to ensure that wages are sufficient for workers to afford these essentials.
E: With the upcoming wage increase from $248.93 to $278.80 pesos, how does this change effect the purchasing power of families regarding the basic basket?
M: This increase is a positive step as it’s expected that, by 2030, workers coudl purchase 2.5 basic baskets with the new minimum wage. This would undoubtedly improve the standard of living for many low-income families.Though, we have to consider inflation and other economic factors that may affect real purchasing power over time.
E: You mentioned inflation. how prevalent is this issue, and what impact might it have on the effects of this wage increase?
M: Inflation is certainly a challenge. Even though the nominal wage is increasing, if the cost of goods and services continues to rise at a rate that outpaces wage increases, the actual purchasing power may not improve significantly. For workers, this means that while they may earn more in pesos, the increase could be offset if prices rise concurrently.
E: What sectors or types of workers do you think will benefit moast from this minimum wage increase?
M: Generally, those in low-wage sectors—such as retail, agriculture, and services—stand to gain the most. Many of these jobs frequently enough pay right at or just above the current minimum wage. This increase can help lift households out of poverty and provide some financial relief.
E: What should the government consider moving forward to ensure that these changes have a lasting impact?
M: The government needs to take a extensive approach. This includes monitoring inflation closely, ensuring that any price hikes in basic goods are addressed, and possibly implementing further support mechanisms for low-income families, such as subsidized transportation or housing. Additionally, promoting job growth and vocational training can help create better-paying job opportunities.
E: That’s a holistic view. Lastly, what are your thoughts on the public perception surrounding this wage increase? Is there optimism, or are there concerns?
M: There is certainly a mix of optimism and skepticism. Many see this increase as a victory for workers’ rights and an essential step in the fight against poverty. However, there’s also concern about whether these changes will truly lead to improved living standards or if they are merely symbolic. Continuous public dialog and openness will be critical to addressing these apprehensions.
E: Thank you, Dr. Martinez, for this enlightening discussion. Your insights on the future of the minimum wage and its impact on living standards are invaluable. We look forward to seeing how these changes will unfold in the coming years.
M: Thank you for having me. Let’s hope for effective implementation and continuous improvement for all workers!
E: And that wraps up our discussion for today.Stay tuned for more updates on this and other pressing economic issues. Thank you all for watching!