MEXICO CITY — On Wednesday, Mexico’s government revealed plans to implement a 12% increase to the current minimum wage, which remains significantly low in comparison to other nations, starting in January 2025.

However, due to an 18% decline in the value of the Mexican peso over the past year, this adjustment translates to a minor decrease in terms of real dollar value.

The announcement was made by a tripartite commission consisting of representatives from the government, labor unions, and business sectors.

The updated daily minimum wage is projected to be approximately 279 pesos, equating to roughly $13.75. In contrast, the current wage of 249 pesos was valued at $14.25 when it was established in December 2023, yet the peso’s depreciation has led to its current worth falling from 17.20 to around 20.30 against the U.S. dollar.

As Mexico faces domestic inflation rates hovering near 4.75%, the recent wage announcement may effectively result in a real-term gain of around 7%, unless there is a further spike in inflation rates.

Nonetheless, this still represents a mere $1.71 per hour, which pales in comparison to the U.S. federal minimum wage of $7.25 per hour, with many states opting for minimums between $10 and $16 per hour.

In areas along Mexico’s northern border with the United States, where living expenses are significantly higher, the mandated minimum wage is comparatively elevated. For the year 2025, this rate is set to rise to about 420 pesos, or $20.70 per day.