WASHINGTON (dpa-AFX) - Mexico will raise its daily minimum wage by 20 percent to 123.22 pesos ($6.36) for 2020.
This was announced by President Andres Manuel Lopez Obrador at an event in Mexico City on Monday.
Addressing union leaders and business leaders at the National Palace, Obrador said, 'This is going to help the economy of course because it strengthens the internal market'.
This is the second major increase since the leftist leader came to power last year. Obrador had announced a 16 percent hike earlier.
Still, only 20 percent of Mexico's working class is earning the minimum wage.
Even the increased rate is said to be not enough to lift the worker above poverty line, as the purchasing power of the minimum wage has declined over the decades.
The President acknowledged this fact in his speech, saying, 'I am aware that we still have a long way to go.'
The hike in minimum wage is against Central Bank Governor Alejandro Diaz de Leon's warning that such an action will distort the labor market.
The Latin American country's rate of inflation had fallen to 2.85 percent last month.
Mexico's lower wages had been an attraction for U.S. automobile companies to open assembly and manufacturing units in that country.
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