By Anthony Harrup

MEXICO CITY--Mexico's minimum wage will rise 20% in 2024 in a sixth consecutive year of double-digit increases in an agreement between business, government and labor groups.

The National Minimum Wage Commission said Friday the daily minimum wage will rise to 248.93 pesos ($14.50) from 207.44 pesos in 2023. Along the northern border with the U.S., the wage will increase to 374.89 pesos from 312.41 pesos.

"This means we are going to fulfill what we offered at the start of our government to double the minimum wage in real terms," President Andrés Manuel López Obrador said Friday at his daily press conference. "This hasn't happened in 50 years."

López Obrador took office in December 2018 and his nonrenewable six-year term ends Sept. 30, 2024.

The minimum wage adjusted for inflation has more than tripled along the northern border and more than doubled in the rest of the country since 2018, Mexico's leading business group said in a statement.

The increases have started to have a broader impact on overall wages, analysts at Grupo Financiero Banorte said in a report.

"Recent evidence suggests a larger 'lighthouse effect' from said increases, especially considering little slack in the labor market," they said. "Nevertheless, given that the adjustment is broadly in line with our expectations, we hold our view that inflation will close 2024 at 4.6%."

Higher wages and employment, along with record remittances from Mexicans living in the U.S., have contributed to robust household consumption and greater-than-expected economic growth this year. The Bank of Mexico this week raised its growth forecast for 2023 to 3.3% from 3%, and for next year to 3% from 2.1%.

Write to Anthony Harrup at

(END) Dow Jones Newswires

12-01-23 1728ET