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…