Doing Business In (Insert Country Name Here) - Department of ...

All three levels are below the average cost of living in Mexico’s cities, and most salariesare discussed in terms of multiple minimum wages: one minimum wage, two to fiveminimum wages, or more than five minimum wages. Wages have not kept up withinflation over the past several years, so Mexican workers have taken a heavy cut in realwages. The law sets a standard six-day workweek with one paid day off. For overtime,workers must be paid twice their normal rate and three times the hourly rate for overtimeexceeding nine hours per week. Employees are entitled to most holidays, paid vacation(after one year of service), vacation bonuses, and an annual bonus equivalent to at leasttwo weeks pay. Companies are also responsible for these additional costs. These costsusually add about 30 to 35 percent to an average employee salary. Employers must alsocontribute a tax-deductible two percent of each employee's salary into an individualretirement account. Most employers are required to distribute ten percent of their pre-taxprofits for profit sharing. Speaking on behalf of the current administration, the LaborSecretary has repeatedly affirmed that labor reform is and remains one of the toppriorities of President Calderon's government.There is a large surplus of labor in the formal economy, largely composed of low-skilledor unskilled workers. On the other hand, there is a shortage of technically skilled workersand engineers. Mexican manufacturing operations are experiencing stiff wagecompetition from Central America, China, India, and elsewhere in low technology work,such as textile and garment manufacture, but changing global circumstances havebrought some industries back to “near shore” operations along the border.For the past several years, with the possible exception of the mining industry, strikeshave been limited and usually settled quickly. Strikes that are more difficult will usuallydraw government mediators to help the settlement process. Labor-managementrelations are uneven and depend upon the unions holding contracts and the industriesconcerned. Information on unions registered with federal labor authorities is now partiallyavailable to the public via Internet (www.stps.gob.mx), but this database is incomplete.The government is coming under increasing pressure about its control over unionleadership, exercised through official recognition of union election results. This processis seen by independent unions as a violation of autonomy, and it has been at the core ofrecent government-union tension.Foreign Direct Investment StatisticsReturn to topForeign Direct Investment in Mexico (USD Million)2004 2005 2006 2007 2008Total FDI Inflow: 23,725 22,106 19,471 27,094 22,517New Investments 14,106 10,979 5,815 13,288 7,888EarningsReinvestment2,520 4,029 7,750 8,056 7,512Inter-companyInvestment7,099 7,098 5,906 5,750 7,117