Mexico's Labor Secretary Marath Bolanos speaks after the announcement that he will continue as Labor Secretary in Mexico's President-elect Claudia Sheinbaum's cabinet, in Mexico City, Mexico July 18, 2024. REUTERS/Henry Romero

The minimum wage will rise to 315.04 pesos ($17.27) per day, part of an agreement between labor, business and the government leaders, Labor Minister Marath Bolanos said.

The 2026 minimum wage increase will bring the accumulated rise in salaries to about 150% since 2018 in Latin America's second-largest economy.

Mexican President Claudia Sheinbaum said the decision had been taken after consulting with the finance ministry and the central bank. "It doesn't have an inflationary impact," she said about the wage hike.

Sheinbaum has said that over the last seven years wage hikes have reduced poverty significantly.

The government is also sending a bill to Congress to incrementally trim the working week to 40 hours per week from 48 hours by 2030, Bolanos said during the president's morning press conference, adding that this would generate more jobs.

The reduction of weekly working hours will start in 2027 and be implemented gradually, cutting two hours each year until 2030.

($1 = 18.2453 Mexican pesos)

(Reporting by Aida Pelaez-Fernandez; Writting by Raul Cortes Fernandez; Editing by Daina Beth Solomon, Brendan O'Boyle and Sharon Singleton)