With López Obrador, wages record the highest increase since the time of Fox

The speed with which wages rose in the first months of 2019 could ignite the "yellow dots" of the Bank of Mexico.

In the first five months of the government of Mexican President Andrés Manuel Lopez Obrador, wages in the country have performed well. This has had positive effects on the resumption of workers' purchasing power and consumption. However, it can also carry risks for variables such as inflation, in case of loss of sight of other factors such as productivity performance.

From December 2018 to last April, wage reviews between unions and workers, within the limits of federal jurisdiction, according to data from the Ministry of Labor and Social Security (STPS), the average monthly increase was 5.9%, the largest increase since the administration of Vicente Fox.

"We believe this increase continues to be explained by the rise in the minimum wage as well as by the search for a recovery in purchasing power after two years of strong inflation"The Banorte badysts said in a document.

These salary revisions for January 2019 were provided as a reference. the increase of the minimum wage of 16.2% in general and that corresponding to that of the northern border of Mexico with 100%.

The speed with which wages increased during the first months of Lopez Obrador's government, they could put the Bank of Mexico on the alert, a situation that could make it more cautious when badessing a possible decline in the reference rate.

According to the prospects, the negotiations between unions and companies, which will take place during the rest of the year, will result in salary increases higher than those observed in 2018..

"In this sense, eIt is likely that negotiations will continue to be pushed up due to the increase in the minimum wagewhich, although it was done a little over four months ago, continues to be incorporated gradually, "said Banorte badysts.

Last January, the federal minimum wage went from 88.36 to 102.68 pesos a day, for the northern border it rose to 176.72 pesos a day.

"It's a historic event because we started together a new stage in the wage policy of our country", said Monday the President of Mexico, Andrés Manuel López Obrador, in the case of a new minimum wage policy, in which the increase has been formalized.