In Mexico, there is a need for the administration to raise the minimum wage for workers, as stated by Eduardo Osuna, vice president and general director of BBVA Mexico. Despite the increases that have been implemented over the past six years, Mexican families still have a low purchasing power compared to what was reported in the 1980s.
BBVA Mexico has reported profits of 25,499 million pesos in the first three months of this year, representing a slight decrease compared to the previous year. The bank highlighted that recent increases in the minimum wage have not had an inflationary effect or impacted job creation and there is still room for further increases.
The National Minimum Wage Commission data shows an 110 percent nominal increase in the minimum wage between 2018 and 2023. However, Mexico’s minimum wage remains one of the lowest in Latin America and OECD, about 30 percent below its peak in the 1970s.
The bank’s credit portfolio increased by 9.1 percent, with a significant rise in household loans due to higher reserves created to reduce credit risks. Despite this profit dip, BBVA Mexico remains the largest contributor to global profits of Spanish consortium.
Osuna mentioned that comparative effects affecting profits are expected to decrease in coming months leading to positive numbers once again. The bank is optimistic about future profitability and economic outlook given improving credit portfolio and potential further wage increases to boost Mexican families’ purchasing power.
In conclusion, raising wages for workers can improve Mexican families’ purchasing power without negatively impacting inflation levels or job creation. BBVA Mexico has reported slightly lower profits than last year but remains optimistic about future profitability given improvements in their credit portfolio and potential future wage increases.
