International Newsletter

New Elected President López Obrador Expected to Boost Rights of Low Paid Workers and Union Employees

October 11, 2018
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Mexico

As a result of the July 2018 presidential election, Andrés Manuel López Obrador was elected as the new president of the Mexican Republic and will take office on December 1, 2018, for a six-year term. It is widely anticipated that he will introduce employment law reform to boost the rights of low paid workers.

Based on speeches made both before and during the election campaign, it is clear that López Obrador considers workers of the field (i.e., farms, crop fields, etc.) to be members of a vulnerable group who have historically received almost no attention or support from government to improve their way of life. López Obrador has used social media to announce that his government will support workers of the field, will allow them to become “hired with dignity” pursuant to the Mexican Federal Labor Law, and will provide them with access to appropriate wages, healthcare benefits, and decent living standards. We await further details on these plans as well as detail on any corresponding incentives that might apply to their employers.

In support of another proposed reform, López Obrador’s financial advisors have analyzed the cost of the typical food “lunchbox” required for workers to maintain a healthy and decent life. They have concluded that the current cost is approximately $1,422 Mexican pesos (MXP) (USD $75 : GBP 55 : Euro 65) per month, per worker. In order to enable all Mexican workers to purchase this “lunchbox” without impacting their ability to buy other essential consumer goods and food, López Obrador proposes increasing gradually (by year 2024) the General Minimum Wage (GMW), to $5,130 MXP (USD $270 : GBP 205: Euro 230) per month or $171 MXP (USD $9 : GBP 6.80 : Euro 7.50) daily and doubling these amounts for workers performing activities near the border lines of Mexico. López Obrador plans to achieve this by making a direct formal proposal to the Mexican National Commission on Minimum Wages (Comisión Nacional de los Salarios Mínimos or CONASAMI), who has responsibility for setting the minimum wage.

Finally, López Obrador has stated his desire to increase the transparency and representation of unionized workers in Mexico and will initially focus on the automotive, maquila (manufacturing of products at the border), and mining industries. These are industries in which López Obrador considers union representation to have lacked strength and the required bargaining powers to improve unionized workers’ way of life.

Comment

López Obrador’s government is likely to set out its program of proposed reform in the first few months of his administration following his inauguration in December. We should then know further details on these proposed changes, including any employer incentives. It will also be interesting to see what other measures may be announced. It is likely that any new measures will be aimed at improving the way of life of the most disadvantaged workers.

Written by Stefano Sandoval Malori of Ogletree Deakins