Mexico has announced it will raise minimum wage nationwide by 20% next year.

This week, President Andrés Manuel López Obrador announced he had good news: his government reached a deal with business and labor representatives to implement a 20% minimum wage hike starting on Jan. 1.

That will increase the pay for the lowest-paid formal-sector workers from about $9 a day to just under $11 — a monthly increase of nearly $55. Along the border with the U.S., where the minimum wage is higher, it will reach about $16 a day.

According to Labor Secretary Luisa Maria Alcalde, some 6.4 million workers are expected to benefit from the wage boost. López Obrador said will address inflation and the increasing cost of basic goods.

This administration has raised the minimum wage annually since the president took office at the end of 2018. The wage increased by 16% in 2019, 20% in 2020, 15% in 2021 and 22% in 2022.