Against the minimum wage

How workers are paid is creating unexpected schisms in Mexican society.

A quick test to see who’s out of touch in Mexico is to ask someone what they think about president Claudia Sheinbaum’s 12% increase in the minimum wage. Many an earnest sounding analyst will hand-wring, concerned about how the doubling of the minimum wage since the arrival of Sheinbaum’s predecessor in 2018 does not reflect Mexico’s productivity, which has not made up the fall it experienced during Covid. Others will worry about the threat of spiralling inflation.

Both arguments, at best, reflect a misunderstanding of Mexico’s economic reality and, at worst, slide perilously close to the “Mexican workers are lazy” line of the sort that got The Economist in trouble last year.

A proper look at the facts reveals that the increases to Mexico’s minimum wage have not only been the right thing to do, but that keeping them down was the result of an ideological stance that hurt the Mexican economy as a whole.