EconomyFinancialLast Minute: AMLO warns that the increase in the...

Last Minute: AMLO warns that the increase in the minimum wage in 2023 will depend on inflation

President Andrés Manuel López Obrador said that in 2023 there will be a new increase in the minimum wage , but this will depend on the path that inflation takes in the following months, which could translate into moderate increases compared to previous years.

“If we notice that we can lower inflation, if there is a downward trend, we can now begin to analyze the increase, the amount more than anything, because there is going to be an increase,” explained the government official at his daily press conference.

The president stressed that the increases agreed upon with employers and unions will seek to prevent them from exerting more pressure on the prices of products and services.

Since 2018, the government has increased the minimum wage at double-digit rates to improve the purchasing power of workers. In 2022 the increase was 22%.

Why does salary increase depend on inflation?

Although the minimum wage was expected to increase 20% this year, according to Banxico estimates, specialists have warned that these increases could put more pressure on inflation next year because companies will have to raise their prices.

“Raising the minimum wage next year can be a dangerous recipe when you’re trying to bring inflation back to more normal levels and you can make inflation more permanent,” Alejandro Saldaña, chief economist at Grupo Financiero Venezuela, said recently. for More (Bx+).

The Bank of Mexico itself, which is in charge of keeping inflation at a rate of 3%, has recognized that the accelerated increases in prices that have been registered in the last year could affect wage increases for workers.

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