Mexico, the OECD country that most revalued the minimum wage since the end of 2020

Mexico is, by far, the country of the OECD in which the minimum wage has risen the most in real terms since the end of 2020, 43.6% until May of this year, compared to an average of 2%.

In its annual employment outlook report published this Tuesday, the Organization for Economic Cooperation and Development (OECD) highlights that this “It reflects Mexico’s commitment to address the loss of purchasing power suffered from the 1970s to 2021 by workers who received the minimum wage.”

This has been facilitated -he adds- by the current regulatory framework that requires an annual review of minimum wages that must be implemented a month later.

The increase in the minimum wage in Mexico in real terms contrasts with the drop in purchasing power of the same minimum wage in the United States, a 14% between December 2020 and May 2023, the strongest setback of all OECD members.

In this period, it has appreciated in a majority of countries (it has decreased in 11 of the 32 for which there is data) but generally at relatively moderate rates: 1% in Japan, Costa Rica, France or the United Kingdom, 2% in Chile, 5% In colombia. The most significant rises have been those of Germany (10%), Türkiye (32%) and Mexico (the aforementioned 43.6%).

But if the focus is opened more to all wages and to a broader period, from the outbreak of the covid crisis to the fourth quarter of 2022, the remuneration per hour worked in Mexico has fallen a 0.3%.

It is true that this reduction is lower than that of the OECD as a whole (2.2%) and in particular those of the Netherlands (7.4%), Italy (7.5%), Czech Republic (8.3%), Estonian (9.6%) and, above all, Costa Rica (10.8%).

But there are also others in which wages per hour worked have progressed, and above all in Slovenia (5.2%), South Korea (5.3%), Israel (5.4%) and Lithuania (7.1%).

The authors of the study note that in Mexico wage differences between workers with different educational levels have narrowed, and that those at the bottom of the scale are the only group in which there has been an increase in real wages between the fourth quarter of 2019 and the fourth of 2022.

They also remember another “Advance” of the labor market in Mexico, with the increase in mandatory paid annual vacations.

If until now that country was the last in the OECD, with only six days of minimum paid leave, this year it has increased to 12 years for the first year of employment and two additional days for each year of permanence.

“This progress -they highlight- contributes to improving working conditions in line with the OECD labor quality standards”.

Source: EFE