MEXICO CITY • Critics are blasting a move this week by Mexico to raise its minimum wage by 10 percent, saying the increase falls short of meeting the basic needs of workers and is unlikely to satisfy U.S. and Canadian NAFTA negotiators who see low Mexican salaries as unfair competition.
Mexico will raise its minimum wage on Dec. 1 from 80.04 pesos per day to 88.36 pesos, President Enrique Pena Nieto said on Tuesday. That's equivalent to 45-cent increase to $4.71 per day. The U.S. federal minimum wage is $7.25 per hour, or $58 in a eight-hour day.
During the renegotiation of the North American Free Trade Agreement, Mexico has come under criticism for poor worker conditions, which the United States and Canada say allow it to benefit disproportionately from the pact.
Along the border, U.S. average wages are about five times higher than Mexican wages, one of the largest per capita wage differentials of any land border on the planet.
"Let me tell you something, this is not a minor adjustment, considering that since this administration began almost five years ago the minimum salary was barely 60 pesos," Pena Nieto said, adding there had been a 20 percent increase in the minimum wage in real terms since he took office in 2012.
But the pay increase did not impress Canadian union leader Jerry Dias.
"The bottom line is 10 percent of nothing is nothing," he said in an interview. "Ten percent isn't going to do a darn thing for the workers in Mexico. It's almost insulting to Canada and the United States."
Last month, Pena Nieto said he saw the renegotiation of NAFTA as an opportunity to improve conditions for workers, adding he does not want the country to compete on low salaries.
In a statement, business chamber Coparmex, a member of Mexico's salary commission, called the increase a halfway measure and recommended raising wages further to 95.24 pesos.
On Wednesday, Mexico's National Human Rights Commission said the increase in the daily minimum wage is worrisome because it still isn't enough to meet the basic needs of a single worker or a family.
The commission said the minimum wage now falls about $15 a month short of what is needed to meet a worker's basic food, shelter and clothing costs.
The government has said the increase represents a purchasing power increase for employees. But with inflation running around 7 percent a year, the real-term benefit is minor.