The bank’s report noted that there is evidence that increasing the minimum wage helps improve poverty metrics without generating adverse effects on inflation.
However, if increases continue at this rate, negative effects are expected for the labor market, especially for small and medium-sized companies.
“(The increase in the minimum wage) increases the cost burden for companies, discouraging job creation and putting pressure on final prices,” the bank said.
The increases in the minimum wage have occurred since the six-year term of Andrés López Obrador and have been at rates of 20%. In 2018, the minimum wage was 88.36 pesos.
In addition, the bank warned that raising the minimum wage could create pressure to adjust the salaries of other workers nearby on the pay scale, known as the lighthouse effect.
“Initially, this effect was limited because the minimum wage was very low, in addition to the fact that part of the observed increases could have been associated with the tightening of labor market conditions,” the report detailed.
Experts warn that now the context is different, given the strong increases in the minimum wage already accumulated.
One of the examples of wage pressures was what has been recorded in inflation, especially in services, which only this year has begun to decline very slowly.
