The Mexican government, labor and business sectors agreed Monday to raise the minimum wage by 16.2% in 2019, a third consecutive year of double-digit increases aimed at restoring the purchasing power of the country’s lowest earners.

The minimum wage will rise to 102.68 pesos ($5.10) a day from 88.36 pesos on Jan. 1, while along the northern border with the U.S. the minimum daily wage will double to 176.72 pesos ($8.80), said Labor Minister Luisa María Alcalde.

Mexicans work longer hours than anyone in an Organization for Economic Cooperation and Development country, but wages are among the lowest, she said.

Mexico’s minimum wage has for years been insufficient to pay for the most basic needs. Few workers in formal jobs earn that little, although millions are paid somewhere between one and two times the minimum wage, according to government data.

Moves to raise the wage substantially in recent years prompted some concerns that it could push up wages across the board, generating high inflation. But a 10% increase in the wage in January 2017, and another 10% increase in December 2017, didn’t extend to other contract wage settlements, which averaged 4.2% in 2017 and 5.2% in 2018.

At 102.68 pesos a day, the minimum wage probably won’t have reached the point where it will have a direct impact on all wages, said David Kaplan, a senior labor specialist at the Inter-American Development Bank.

Mexico’s low wages were also an issue in this year’s negotiations to redraw the North American Free Trade Agreement. President Trump saw the wages as unfair competition that was drawing manufacturers out of the U.S. to Mexico. Under the trade agreement reached this year, at least 40% of cars imported duty-free in the region will have to be made by workers earning at least $16 an hour, which means either in the U.S. or Canada.

The decision to double the minimum wage along the border with the U.S. should help to address high turnover rates at businesses there and be an incentive for migrants seeking to enter the U.S. to stay in Mexico, officials said. The impact on inflation and production costs would be offset by the planned reduction in value-added-tax and income-tax rates along the border, said Economy Minister Graciela Márquez.

President Andrés Manuel López Obrador, who took office Dec. 1, is cutting the salaries of top bureaucrats while promising to raise the wages of lower-paid public servants by one to 3 percentage points above inflation next year.

On Monday, he welcomed private-sector support for the minimum-wage increase and said his administration is taking into account the views of the central bank, “to be careful that it doesn’t set off inflation.”

“This is going to help the economy a lot because when people have more income the domestic market is strengthened,” he added.

The Bank of Mexico, in raising interest rates in November, warned that wage increases that are above gains in productivity are a risk for inflation, which is currently above the bank’s 3% target at 4.7%.