Hourly Wages in Mexico Now Lower than China's Reuters
go to original April 5, 2013

Unemployed laborers wait for casual work on a street in Mexico City. A new study says hourly wages in Mexico are now about 20 per cent below China. (AP)

MEXICO CITY - Mexico’s hourly wages are about a fifth lower than China’s, a huge turnaround from just 10 years ago when they were nearly three times higher, according to new research by Bank of America Merrill Lynch.

Stagnant salaries in Mexico, fueled by strong population growth, will give Latin America’s second-biggest economy an edge over China in the US market, Bank of America Merrill Lynch economist Carlos Capistran said on Thursday.

Average hourly wages are now 19.6 per cent lower in Mexico than China whereas in 2003 they were 188 per cent more costly, according to the Bank of America study.

Mexico can maintain that competitive advantage for at least five years, thanks to a growing labour market that puts downward pressure on wages, Capistran said.

The demographic bonus from its young population will help boost Mexican growth to 4 per cent this year, he added, and is even more important to juicing the economy than a raft of reforms proposed by centrist President Enrique Pena Nieto, who took office in December.

Read the rest at scmp.com

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