The Mexicali Chamber of Commerce expects an impact from the minimum wage increase recently announced by Mexican officials
A 10 percent item price increase is expected next year after the announcement of a minimum wage increase by Mexican officials.
Mexicali Chamber of Commerce President Lidia Granados told a local newspaper that although the minimum wage increase is needed to equal inflation small and medium-sized businesses will be severely impacted.
Granados said benefits are expected to climb as well, which affects small companies.
Recently, Mexican authorities announced a 20 percent increase of the minimum wage. In the border areas the minimum wage will go to the equivalent of $16.44 USD from $13.70 USD per day. The raise means a minimum wage worker will get around $83.36 USD more per month.
According to the chamber president, although the minimum wage increase was expected months ago, many companies were unable to prepare for the higher operations costs due to the pandemic impact.
Granados said part of those increased costs will be paid for by customers through item price increases.
Economist Enrique Rovirosa told La Voz newspaper the minimum wage increase represents a temporary palliative to employees.
Several small and mid-sized companies are expected to become informal — or suspend their registration with the Mexican government in order to avoid paying benefits while keeping costs low.
Also, the economist told the newspaper the increase will impact inflation as the cost will pass to items and services.
Rovirosa said the impact can be mitigated through increased employee productivity.
The economist admitted that the minimum wage increase will provide some relief to families, but insisted such help will be temporary as other services like energy and water will observe a raise.
State Secretary of Labor Alejandro Arregui said about 764,000 employees in Baja California will be benefited by the minimum wage increase.
”Nobody can deny the benefit for Baja California,” Sec. Arregui said.
More traffic expected from Christmas shopping
Christmas shopping, along with additional free time and the payment of year-end bonuses has led to an increased traffic on city streets.
Assistant Police Chief Carlos Romero told La Crónica newspaper that the increased traffic has caused car accidents to double during the season.
Last month, the city recorded an average of 20 accidents daily — from minor to injury incidents, he said.
At the same time, Mexicali Police set additional checkpoints all over the city in order to deter drivers under the influence.
Romero asked residents to drive responsibly while using their seat belts.
“We still have lives lost on the streets,” Romero told the newspaper. “This is why we call drivers for precaution.”
Most of the accidents occur in highly used streets like boulevards and avenues, he said.
Production changed in thousands of acres
The state Department of Agriculture has invested funds in order to make growers harvest different types of produce that provide more income while reducing water use.
State Secretary of Agriculture and Food Security Juan Meléndrez said in a prepared statement the agency has invested about $84,210 USD in Mexican currency to move growers to produce corn, Sudan grass, citrus and figs.
In total, the agency has been able to change harvesting in over 2,200 acres.
Sec. Meléndrez said growers have also been able to break biological cycles of plagues and illnesses.
The state official said these products provide growers more income through better prices and increased yield.
Mexicali Valley has seen for years issues with wheat producers, who struggle with world low prices that has forced them to sell their products below production costs and led them into debt.
Sec. Meléndrez added that the state has been able to provide credit loans to grow oath, corn and Sudan grass for the benefit of 94 producers.
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