Mexico fights inflation with trains, planes, and instant coffee

Higher minimum wages are only one side of the living standards coin.

Unaffordability has emerged as the common factor in the fall of governments across the world. Indeed, Trump’s second term in the US or the rise of Milei in Argentina can trace their roots in part to a generalised rise in the cost of living.

The Mexican government has been heralded, in contrast, for having kept living standards rising in the years after the pandemic. Much of the credit has been rightly afforded to president Andrés Manuel López Obrador’s (2018-2024) doubling of the minimum wage. At the time, critics feared that a flood of demand from newly enriched working Mexicans would raise prices and cancel out their newfound gains.

This did not come to pass. An absence of price rises was not an accident though. A multi-faceted policy of inflation reduction is the other side of the coin when it comes to Mexico’s growing living standards. It is one which president Claudia Sheinbaum has taken to the next level in her year in office.

These are the three ways in which she has produced a successful anti-inflationary strategy, rejecting both the right’s free market laissez-faire economics as well as overbearing price controls of left-wingers past.