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 News Around the Republic of Mexico | May 2005 
Mayor Proposes Minimum Wage Hike
 Mark Stevenson - Associated Press
| | Workers fill Mexico City's Zocalo Plaza de la Constitucion as they pass under posters showing Engels, Lenin and Stalin. (Photo: AP) |
Mexico City — Mexico's most popular politician, leftist Mexico City Mayor Andres Manuel Lopez Obrador, said today he supports raising the country's minimum wage at about two percent above the inflation rate, in a bid to make up for lost purchasing power.
But workers say that Mexico's US$4.25 per day (euro3.30) minimum wage would have to increase by at least 300 percent to even begin to buy the basic necessities.
Lopez Obrador, who earlier proposed a welfare system "from the cradle to the grave," said in a May Day press conference that his wage proposal was needed to gradually make up for two decades of falling purchasing power.
"The wage increase have to be above the inflation rate, so that wages no longer decline and can gradually recover what they have lost in the era of free-market policies," Lopez Obrador said.
"Since 1980, the minimum wage has lost about 60 percent of its purchasing power, and the problem of unemployment hasn't been solved, so people, especially young people, are emigrating to the United States," Lopez Obrador said.
But the two-percent solution — which the mayor has implemented in Mexico City, on top of the country's 4.5-percent inflation rate — just won't be enough, said Gustavo Arteaga, an activist from Mexico's Nuclear Workers' Union participating in the May Day march in downtown Mexico City.
He said workers need at least 175 pesos per day (US$15.75, euro12.25) just to get by.
"We need a planned economy, and controls on inflation, so that our wages won't fall," Arteaga said as he watched the crowd burn and effigy of President Vicente Fox and former president Carlos Salinas.
"The way the minimum wage is now, it doesn't buy anything," Arteaga said.
Lopez Obrador has proposed more state support for Mexican industries, and more reliance on oil production.
After losing value throughout much of the 1990s, Mexico's minimum wage has slowly begun recovering a bit of its lost purchasing power. In real terms, however, it still remains well below the value it had in 1994, the year of the Mexican peso devaluation and economic crisis.
While only about one-fifth of Mexican workers earn the minimum wage — the average wage is about 2.5 times higher — it is used as a yardstick for calculating many salaries, taxes, fines and government fees. |
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