Mexico Looking To Increase Wages as Car Manufacturers Flood Country
Mexico on Thursday got yet another billion-dollar investment pledge from an automotive company to build a car plant in the country. Kia's announcement follows luxury giants Mercedes and Audi, whose parent companies made similar commitments earlier this year.
That Mexico is attracting billions in foreign investment isn't all that shocking. With its stable economy and established middle class, Mexico seems to be one of the more prosperous countries in the Western Hemisphere.
But for all Mexico's economic plaudits, its minimum wage, which is currently set at $5.12 per day, is in front on only Haiti for the lowest in the region. Many in Mexico are trying to change that, according to The Wall Street Journal.
Mexico City's Mayor Miguel Angel Mancera has proposed a 2015 increase in the federal minimum wage from 67 pesos a day to 82.86 pesos per day, about $6.33. Mexico is the only Latin American country with a minimum wage below the poverty line.
According to reports, upping the minimum wage is supported by both the liberal Party of the Democratic Revolution and the conservative National Action Party.
Mexican minimum wage hasn't increased in real terms since 1976. In that time, has lost 77 percent of its purchasing power, The Christian Science Monitor reported. Mancera said that the wage isn't enough to buy a basic basket of food.
But the Mexican government is more focused on education reform and economic competition.
"There are no shortcuts: to increase wages, we have to grow more, generate more jobs and have better trained workers," said Carlos Elizondo, a former ambassador to the Organization for Economic Cooperation and Development.
Supporters of the wage hike say that it would increase the number of people working within the economy and increase domestic demand. The low minimum wage has pushed many Mexicans to jobs with under-the-table pay.
"This debate has to do with the kind of country you want to be," said Salomón Chertorivski, the man responsible for the mayor's wage proposal. "We firmly believe the minimum wage is not just a price but a citizens' right."
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