Even though there are successes with the increase in 12% to the minimum wage announced by Government of Mexico, such as improving the purchasing power of workers and reducing inequality economic, experts
they warn that, in contrast, the measure will create a inflationary rebound.
Carlos López Jones, financial analyst, said that increasing salaries by decree is not a good decision at this time, since it will generate a inflationary pressure.
“You create a black labor market, because there will be many companies that will not be able to
pay the 8,400 pesos per month that are set with the increase and will tell many employees: there are 6,000 or 7,000 per month without benefits Do you want them?”
Platform Director Tendencias.mx, López Jones said that the real burden for businessmen is 11 thousand pesos, as this is what a minimum is equivalent to when you add up the payments for IMSS e Infonavit.
He pointed out that with this decision, far from promoting job creation, you reduce it and cause pressures inflationary“which will not allow Banxico be so aggressive in lowering your rates.” In this regard, Quasar Elizundiamarket strategist Pepperstoneconsidered that although a higher salary can generate a positive dynamism in the economy, there is also the risk of opening inflationary pressures, especially considering that the increase far exceeds the estimated inflation of 3.5% for December 2025.
He highlighted that this economic balance between the growth of purchasing power and the inflationary risk seems incorporate to a series of relevant factors, as well as possible commercial complications for the stability of Mexico in the next year.
“Despite the efforts of the Bank of mexico to control inflation, pressures continue to be above target levels and the implementation of higher wages could increase purchasing power, but there is also the possibility that demand for goods and services exceeds supply, generating an increase in prices.prices.”
Related
How can policymakers balance the needs of workers with the concerns of businesses regarding minimum wage hikes?
Sure! Here’s an engaging interview format based on the facts you’ve provided about the increase in the minimum wage.
Interview between the Time.news Editor and Economic Expert Dr. Sarah Collins
Editor: Welcome, Dr. Collins! Thank you for joining us today. The recent announcement of a 12% increase in the minimum wage has sparked a lot of discussions. What are your initial thoughts on this decision?
Dr.Collins: Thank you for having me! It’s definitely a significant move. A 12% hike in the minimum wage can have various implications for both workers and the economy. It’s a step forward for many low-income earners, but it also brings up questions about inflation and how businesses might respond.
Editor: Absolutely.Many advocates see this as a victory for workers. Can you talk about who benefits the most from this increase?
Dr. Collins: Certainly. The primary beneficiaries are low-wage workers across various industries, such as retail and hospitality. For many of these individuals, this increase can mean a more livable wage, potentially lifting some families out of poverty.It allows them to invest more in their well-being and their community.
Editor: That’s an significant point. however, there are concerns about how businesses, notably small ones, will cope with these changes. What do you think will be the impact on them?
Dr.Collins: that’s an ongoing debate. Some small businesses may struggle to absorb the increased labour costs. This could lead to higher prices for consumers or, in the worst-case scenario, even layoffs. Though,on the flip side,when workers have more money to spend,it can boost local economies,which ultimately benefits businesses in the long run.
Editor: It’s a balancing act for sure. What about inflation? Some critics argue that increasing the minimum wage could contribute to rising prices. Is that something we should be concerned about?
dr. Collins: It’s a valid concern. While some studies suggest that modest increases in the minimum wage do not substantially impact inflation, larger hikes can lead to price adjustments as businesses pass on the costs. It’s crucial to monitor this closely, as we want to avoid a situation where the wage increase doesn’t translate into real purchasing power for workers.
Editor: That’s a great insight. Looking forward, what strategies can municipalities and businesses adopt to mitigate potential negative effects while still supporting the wage increase?
Dr. Collins: Collaboration is key.Municipalities can offer tax incentives or subsidies to small businesses to help them transition sustainably. Additionally, businesses could invest in automation and efficiency to offset labor costs. it’s also important for companies to engage with their employees in determining how best to manage these changes.
Editor: Thank you, Dr. collins. what do you hope to see in the broader discussion surrounding minimum wage policies in the future?
Dr. Collins: I hope for a more comprehensive dialog that considers all perspectives: workers, businesses, and the economic context. Policy-makers should gather data on the impacts of these changes and be willing to adjust strategies accordingly. Ultimately, we’re looking for a solution that uplifts workers while maintaining economic stability.
Editor: Those are some crucial points, Dr. Collins.Thank you for sharing your expertise on this important issue!
Dr. Collins: Thank you for having me! I appreciate the opportunity to discuss this pressing topic.
This format keeps the reader engaged while providing valuable insights into the implications of raising the minimum wage. If there are specific details or angles you’d like to include, feel free to let me know!