Last updated on September 24th, 2023 at 06:45 pm
The last update to the minimum wage in Mexico was in January 2023. If you want to start operations in Mexico, it is essential to know this. Mexico has two minimum wages: the General and the Northern Border Area. The Northern Border Area is higher than the general one.
Minimum Wage in Mexico 2023
| General Daily Minimum Wage in Mexico | Northern Border Minimum Wage |
|---|---|
| MXN $207.44 | MXN $312.41 |
| US $11.96 | US $18.01 |
*This is today’s Google Finance exchange rate
An Overview
The minimum wage in Mexico was established in 1917 with the publishing of the Mexican Political Constitution. Our Constitution was written after a period of social injustice, and labor conditions were a big problem back then. This led to the Mexican Revolution, which finalized with the winners writing an entirely new Constitution. Naturally, this new regulation included mandatory profit sharing, the establishment of a minimum wage in Mexico, social security for Mexican workers, and better Mexican labor laws in general. Article 123 of the Mexican Constitution summarizes the entire labor and social welfare framework.
Who decides the minimum wage in Mexico?
Article 94 of the Mexican Federal Labor Law states that a National Commission shall be in charge of this. Articles 90 to 97 of this law discuss this commission and the Mexican minimum wage. Articles 570 to 574 discuss how it must be set. Accordingly, the minimum wage in Mexico is set every year. The commission uses technical reports that include inflation, GDP, employment rate, and other economic indicators that may help the decision.
The Northern Border Minimum Wage In Mexico
The border between Mexico and the US is 3,145 kilometers (1,954 miles), which happens with many plants. Therefore, Mexico has had a commercial synergy with the United States since long ago. Imagine having a manufacturing company based on the US side of the border and suddenly finding out that 10 miles away, laborers charge a fraction of what you are currently paying. Naturally, you would move your manufacturing plant 20 km to save money.
On the Mexican side, workers were crossing the border to work in these manufacturing plants. So, trying to prevent Mexican workers from crossing the border for higher wages, the government created the Northern Border minimum wage in Mexico.
This situation led the Mexican government to create the IMMEX program, creating the “Mexican Maquiladoras.” Essentially this program lets Mexican companies import raw materials without paying duties or VAT so as long they export the final product. This incentivizes American companies to move to Mexico.
The minimum wage in Mexico has always been a reference for calculating official prices like fines, penalties, and other obligations. Even INFONAVIT mortgages were quoted in “Times Minimum Wage.” This led to difficulties in increasing it; a drastic increase would mean a drastic increase in the mortgage of millions of Mexican workers, making them impossible to pay and causing a collapse of the economy.
Therefore, to detach the minimum wage from the official prices, the Mexican government created the Measurement and Updating Unit or UMA because of its name in Spanish (Unidad de Medida y Actualización) in 2016.
Conclusion
Mexico has two minimum wages; a general one and one for the northern border area. Although manufacturing companies may pay this salary, it is usually used as a reference more than a salary. Nearshore software development companies in Mexico should not even consider this figure, since the salaries in that industry fall far from it.
