High Minimum Wage Equals Jobs Growth
Bloomberg
Since 2000, the Latin American region as a whole has increased its growth rate to about 1.9% annually per capita – not like the pre-1980 era, but a serious improvement over the prior two decades when it was just 0.3%. But Mexico hasn't joined in this long-awaited rebound: its growth has remained below 1%, less than half the regional average, since 2000. And not surprisingly, Mexico's national poverty rate was 52.3% in 2012, basically the same as it was in 1994 (52.4%).
The priority has to be jobs now, rather than any deficit reduction. On top of lowering unemployment, policy should also restore the bargaining power of low- and middle-wage workers. This means aggressively increasing the minimum wage; it means reestablishing the right to collective bargaining for higher wages; it means guestworkers should have full rights to the same labor market protections as resident workers; it means paying attention to job quality and wage growth.
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