Mexico’s minimum wage commission set the increase for 2012 at 4.2% for all three of the country’s geographic zones, slightly above the rate of inflation expected for this year and next. This is slightly higher than the 2011 minimum wage with an increase of 4.1%. This is higher than the expected rate of inflation in which the bank of Mexico projects it to be between 3-4%.
The increase brings the minimum wage in Mexico to 62.33 pesos ($4.60) a day for zone A, which includes Mexico City. The minimum wage is slightly lower in other geographic zones.
Area A: The states of: Baja California, Baja California Sur, Mexico City; some municipalities of the states of: Mexico, Sonora, Tamaulipas Veracruz and Chihuahua.
Area B: The states of: Jalisco, Nuevo León and some municipalities of the States of: Sonora, Tamaulipas y Veracruz (not covered by A, above).
Area C: The states of: Aguascalientes, Guerrero, Quintana Roo, Nayarit, Oaxaca, Puebla, Querétaro, San Luis Potosí, Sinaloa, Tabasco, Tlaxcala, Yucatán, Zacatecas, Morelos, Michoacán, Hidalgo, Guanajuato, Durango, Chiapas, Coahuila, Campeche, and some munipalities of Veracruz, Nuevo León, Sonora, Tamaulipas, Jalisco, and Chihuahua (not covered by A and B, above).
Comparing Mexico and China
Although minimum wages in Mexico might be higher than in China, companies are concerned with the rising wages and transportation costs associated with China. Mexico has focused its resources on developing special training and linkage programs that tie in directly with a specific industry in order to strengthen its supply chain market. However, companies have recognized that for some labor-intensive processes, Chinese workers do not meet the skill sets required for specific jobs. When looking at production costs in its entirety, Mexico is a viable option for companies wanting to cut transportation costs. This is primarily due to its close proximity to the U.S.