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Reforma Laboral

Lighthouse Effect 

The lighthouse effect consists of the transfer of the increases in the minimum wage to the rest of the wage distribution, particularly to the income of workers who earn more than the minimum wage; thus, the minimum wage is used as a “lighthouse” or reference for other salary increases.

According to studies conducted by the Bank of Mexico, the so-called “lighthouse effect” causes a correlation in which an actual increase of 1% to the minimum wage causes an increase of 0.85 percent in the salary reviews of the workers in the formal sector of the economy; thus, upon an increase of 10.39% to the minimum wage, the lighthouse effect should produce, according to the Bank of Mexico, an increase of 8.5% in salary reviews. This percentage of 8.5% should become an important reference point in the salary reviews, as it is situated between the increase to the minimum wage and inflation.