Mexico’s 2025 Minimum Wage Debate: MIR, Economic Growth

The 2025 minimum wage negotiations in Mexico have highlighted the role of the Independent Recovery Amount (MIR). The National Commission for Minimum Wages (CONASAMI) approved a 12% increase, raising daily wages to US$15.14 (MX$278.80) nationwide. However, unions are calling for the elimination of the MIR, arguing that it limits wage growth and hinders broader economic progress. In contrast, government officials warn that removing the MIR could trigger inflationary pressures and destabilize the economy. This debate highlights the ongoing challenges within Mexico’s labor market.

Introduced in 2016 and supported by employers and the government, the MIR was designed to offset inflation by adjusting the minimum wage to preserve workers' purchasing power. However, unions are pushing for its elimination, arguing that doing so would allow for larger wage increases across sectors, boosting worker spending and driving economic growth. In contrast, employers and government officials caution that removing the MIR could trigger inflationary pressures and destabilize the economy, favoring the gradual wage increases it currently provides, reports El Economista.

CONASAMI approved a 12% increase in the minimum wage for 2025. Daily wages will rise to US$15.14 (MX$278.80) nationally and US$24.70 (MXN$419.88) in the Northern Border Free Zone (ZLFN), as reported by MBN. The adjustment includes US$0.714 (MX$12.85) attributed to the MIR, which helps restore workers' purchasing power without impacting inflation or contractual salaries by directly adjusting the minimum wage.

Nevertheless, Rosa Albina Garabito, Professor, UAM Economics Department, argues for the elimination of the MIR. “It is time to eliminate the MIR, which is nothing more than eliminating salary caps. The benefits would be the recovery of the domestic market ... this will mean an incentive for investment and GDP growth.” Garabito emphasized that a general wage increase could improve productivity and international competitiveness, fostering a "virtuous circle" of economic growth.

Similarly, Andrés Peñaloza, President, Bialii Consulting, believes that MIR’s purpose has been fulfilled. “After almost eight years of existence, [the MIR] has generated some union tensions ... it is pertinent to eliminate it because that mechanism has already been exhausted,” he said, adding that wages should be increased directly without relying on the MIR.

In line with this view, union leaders and experts contend that removing the MIR would eliminate wage caps and ensure fairer wage increases across all salary levels. However, achieving this requires political consensus. “The government has not yet shown any will to actually push to eliminate this difference. This is a win-win game ... everyone wins,” states Garabito.