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 Business News | November 2007 
Mexico Wages Must Account for Inflation, Lozano Says
 William Freebairn - Bloomberg
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 |  | The federal government has a commitment to constantly improve, in a sustainable manner, the purchasing power of workers.
- Labor Minister Javier Lozano |  | |
Mexican Labor Minister Javier Lozano said next year's minimum wage increase must take into account that inflation will exceed the central bank's target.
"The federal government has a commitment to constantly improve, in a sustainable manner, the purchasing power of workers," Lozano said today at a Mexico City news conference.
Lozano is an adviser to the commission of government officials and labor representatives who will begin wage talks next month. Workers are pressing for higher pay after consumer prices rose this year above the central bank's 3 percent target, driven by increases in basic foods like corn and limes.
Wages should make up for buying power lost in the past, Lozano said. Last year, the commission increased the top minimum wage by 3.9 percent, just under the 4.1 percent inflation rate at the time.
Productivity improvements can help raise real wages without fueling inflation, Lozano said. "We're determined not to create a race between wages and salaries," he said.
Mexico's consumer prices rose less than expected in October, increasing 0.39 percent from the previous month. The annual inflation rate fell to 3.74 percent.
Mexico may switch to a single minimum wage from three separate scales based on geographical zones now in use, Lozano said. Lozano said the minimum wage commission may have a decision on next year's increase as soon as Dec. 20.
The government will complete a package of proposed labor law changes by the end of the year, Lozano said. The proposal will be forwarded to Congress, which is expected to develop legislation next year, he said.
The Labor Ministry needs more power to fine or close down companies that violate workplace-safety rules, Lozano said. The government should also have some legal control over labor outsourcing by employers, he said.
Businesses should have improved access to labor markets under any legislation, Lozano said.
To contact the reporter on this story: William Freebairn in Mexico City at wfreebairn(at)bloomberg.net |
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