Commerce Secretary Wilbur Ross thinks a minimum wage hike is important — for workers in Mexico.
In a television interview Friday, he argued that one of the problems with NAFTA is that the minimum wage in Mexico hasn’t climbed as fast as it should.
“The theory of NAFTA had been [there would be a] gradual convergence of living standards between Mexico and the United States,” he said on CNBC. “That really hasn’t happened on the Mexican side. The minimum wage…has barely gone up in peso terms.”
That means that employers can still find significantly cheaper labor in Mexico. It also means that Mexican workers don’t have the money to buy higher-priced U.S.-made goods.
He made a similar point at his confirmation hearing. “The minimum wage in Mexico has barely changed in pesos for quite a few years. And the peso has depreciated quite a lot against the dollar,” he told senators. “So on a purchasing power basis, the average Mexican worker is far worse off than he or she was five or 10 years ago. That was not the original intent of NAFTA.”
Ross is wrong when he says that the Mexican minimum wage has “barely gone up in peso terms.” The Mexican minimum wage has increased 11 times since 2009, rising by about 50%. The U.S. minimum wage has not increased since 2009.
But even with all those increases, the Mexican minimum wage is a fraction of the U.S. minimum wage. Workers there must be paid at least 80 pesos a day, which works out to only about $ 4. The U.S. minimum wage is $ 7.25 an hour, or $ 58 for an 8-hour day.
Ross wasn’t asked on either occasion what he thought about the campaign to raise the minimum wage in the U.S. But in the past the billionaire secretary has opposed the idea. He argued that a higher minimum wage would hurt workers because they will be replaced by robots and automation.
“They ought to be running ads against the minimum wage increases saying ‘Only robots want the higher minimum wage,'” he told Fox Business in November 2015.
The Commerce department did not respond to a request for comment from Ross on the U.S. or Mexican minimum wages
The U.S. minimum wage workers in the U.S. have also lost ground due to inflation. The U.S. minimum would need to be $ 8.21 an hour today to the same purchasing power that the $ 7.25 minimum wage had in 2009, the last time the U.S. minimum wage increased.
— CNNMoney’s Heather Long contributed to this report