Economy

Brazil, Mexico, and Colombia increase the minimum wage for 2021

The amount serves as the basis for formal employment contracts in these countries, as well as for the payment of pensions

brazilian currency
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  • The increase in Brazil was just above the previously predicted value, but still within the estimated inflation for 2020;
  • In Mexico and Colombia, the readjustment is above inflation.

The federal governments of Brazil, Mexico, and Colombia published the new values ​​of their respective minimum wages for 2021. The value serves as the basis for formal employment contracts in these countries.

In Brazil, the minimum wage went from BRL 1,045 to BRL 1,100 ($ 212) – slightly above what was provided for in the Budget Guidelines Law of 2021(BRL 1,088), but still within the estimates for INPC, the index of inflation used by the federal government for the readjustment.

READ ALSO: Exchange rate imbalance between the Brazilian real and the dollar will persist in 2021, say analysts

According to the Brazillian government estimates, each BRL 1 increase in the minimum wage represents an annual increase of BRL 330 million in federal expenses. The correction of the minimum wage also serves as the basis for calculating the readjustment of the benefit of retirees and pensioners in the country.

In Colombia, the increase was 3.5% (COP 30,723), more than double the official inflation estimated for 2020 in the country of 1.5%. As a result, the value of the minimum wage in the country went from COP 877,803 in 2020 to COP 908,526 ($ 264) in 2021. With the transportation voucher, which in the country is also part of the calculation, the Colombian minimum wage goes to more than COP 1,014,980 ($ 295).

READ ALSO: Market sees higher benchmarking interest rate in Brazil in 2021

In Mexico, the Council of Representatives of the National Minimum Wage Commission (Conasami) defined an increase of 15% for the minimum wage in the country. The new value was not well received by the productive sector, which said that the adjustment came well above expectations, and the estimated inflation of 3.3%. With this increase, the Mexican minimum wage went from MXN 123.22 per day to MXN 141.7 per day ($ 7).

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