Changes Coming in Mexico’s New Year

Mexico Personal Writings Travel

            Mexico City     I could swear that flying into Mexico City for the first time in five or six years that the sky was clearer, but that might have been a mirage.  The brown cloud still hovered over the mountain and volcano sites that surround this great, huge city and traps the inversion even on a New Year’s Eve went the factories and traffic have finally slowed for a minute.  There are a lot of things to ponder at the dawn of a new year, but one in the long list might be the emergence of important changes in Mexico.

There were already signs.  For all the harangue about migrants on the US southern border, it may have slipped by many that the bulk of incoming are from Central American countries, Cuba, and Haiti.  Statistical unemployment in Mexico is only about 5%, so the country is holding its own.

For workers the wages aren’t US-scale, but they are getting better. On December 1, 2022, the National Minimum Wage Commission (“CONASAMI” for its acronym in Spanish) agreed to increase Mexico’s general minimum wage to $207.44 Mexican pesos per day or about $10.65 USD, and to $312.41 Mexican pesos per day in the Free Economic Zone of the Northern Border, effective January 1, 2023 or a bit over $16 USD per day.  The increase has become an annual affair under President Andres Manuel Lopez Obrador and follows an increase from 172.87 pesos ($9.03) a day in 2022.   Part of this movement is designed to deal with inflation that is now over 8.5% in the country, but it is also undoubtedly part of the government’s policy to increase equity with the north.

The pandemic, supply chain issues, and the over reliance on goods produced in China and southeast Asia is also moving work that left Mexico and the maquilas along the northern border.  As the Wall Street Journal notes, “Basic geography is a driver for American companies moving business to Mexico. Shipping a container full of goods to the United States from China generally requires a month — a time frame that doubled and tripled during the worst disruptions of the pandemic. Yet factories in Mexico and retailers in the United States can be bridged within two weeks.”  Some are calling this “near shoring” whatever that means.  It doesn’t mean rebuilding the made-in-the-US capacity, but it’s a good thing.

Not sure this is good news, as great neighborhoods in Mexico City like Roma and Condesa, are becoming ever more gentrified, but other reports from sources like Airbnb indicate that Mexico City is becoming a remote worker hub at 20 pesos to the dollar and the flexibility wrought by the pandemic.  According to Airbnb, between April and June of this year, the number of stays booked in Mexico City on the platform for longer than a month increased by 30 percent compared with the same period in 2019, making the city one of the more popular destinations worldwide among long-term renters.

It felt good to be back in Mexico City to take the pulse of the city and keep up with our huge and critical neighbor to the south.