Aguascalientes Opina – December 31, 2024

The Labyrinth of Wages and Taxes: A 2025 Full of Contrasts

By Aníbal Salazar

The year 2025 begins with a mix of promises and tensions for Mexican workers and taxpayers. On one hand, the increase in the minimum wage appears as a partial victory in the fight to improve purchasing power. On the other hand, fiscal adjustments and tax hikes cast shadows over this gain. In this chronicle, we analyze the most relevant impacts of these measures that will shape the economic landscape of the year.

The minimum wage will see a significant jump, with increases of 12% in the Northern Border Free Zone (ZLFN), reaching 419.88 pesos daily, and 278.80 pesos in the rest of the country. At first glance, these figures seem worth celebrating, but a deeper analysis reveals worrisome nuances. This increase is lower than the previous two years, where increases were up to 20%, hinting that the room for salary improvements is beginning to narrow.

The document from the National Minimum Wage Commission (Conasami) warns of potential effects on prices and employment. Furthermore, with this new rise in the minimum wage, a general increase in the prices of goods and services is expected, which could offset the direct benefit to workers. President Claudia Sheinbaum has set a goal for the minimum wage to cover 2.5 times the cost of the basic basket by 2030. While the ZLFN already meets this goal, the rest of the country barely reaches 1.8 times. To close this gap, increases will need to exceed inflation by at least seven percentage points annually. Is this strategy sustainable? Time will tell.

The impact will not be uniform for everyone. Micro and small businesses will face labor cost increases of up to 6.4% in the ZLFN and 3.1% in the rest of the country, while for large companies, the increase will be marginal, at just 0.4%. This disparity could exacerbate structural inequalities in the labor market.

Adding to these wage tensions are fiscal adjustments, with a 4.5% increase in the Special Tax on Production and Services (IEPS). Gasoline, soda, cigarettes, and other essential products will see price hikes that will erode workers’ purchasing power. A three-liter soda bottle, for example, could cost five pesos more, while a pack of cigarettes will increase by up to 12 pesos. These increases, though justified by inflation, directly impact the daily consumption of millions of Mexicans.

The fiscal landscape also brings new challenges. Changes to Income Tax (ISR) tables and the update to the Measurement and Update Unit (UMA) adjust the calculation of taxes, fines, and fees. The promise of a fairer system seems distant, especially when ISR withholding rates could reduce workers’ net income, partially negating the benefits of the wage increase.

The year 2025 presents a clear dilemma: minimum wage policies and fiscal adjustments seem to walk opposing paths. While one seeks to dignify workers’ income, the other burdens them with price increases that threaten to unbalance any progress. Can this equation be balanced? The answer will depend on how authorities manage the impact of these measures on the most vulnerable sectors.

For now, workers begin the year with a duality of emotions: hope for a higher income, but uncertainty about the weight of taxes and rising prices. At the heart of this complex narrative, the challenge will be to prevent wage gains from becoming a mirage in the face of the inexorable rise in the cost of living.

Time will tell… and so will your opinion.

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*This is a translation of its original version published in Spanish on: Quiero Tv, Ciudad de Aguascalientes Magacín, and A Opinión Magacín.