Analysis of the evolution of wages since USMCA in the Mexican automotive industry

Abstract

Undoubtedly, the arrival of large investments in Mexico in the automotive sector has constituted important competitive advantages in the recent 26 years that NAFTA has been in force, which has increased its participation in the percentage of manufacturing GDP and the contribution in the country's total exports. One of the negative aspects of this treaty has been the low wages received by skilled workers in the industry. As of 2020, this treaty was renegotiated with the implementation of the T-MEC, which allows us to set the objective of analyzing the evolution of wages from the T-MEC in the Mexican automotive sector. Through a quantitative methodology, using secondary data, the results show that average wages have evolved from 50 to 54.8 pesos per hour between 2019 and 2021. Annualizing for 2022, the wages of the assembly plants will close the year at 58.5 pesos per hour (2.9 dollars per hour). In other words, the salaries of the terminal Mexico Automotive Industry have increased by 0.30 dollars, or seen in another way, by 0.10 cents per year. This is equal to an annual increase of 3.8% and a cumulative increase of 11.5 percent.