Mexico's government and business groups have agreed to increase the daily minimum wage next year by 22%, President Andres Manuel Lopez Obrador said on Wednesday, taking another small step toward addressing Mexico's vast wealth disparity.

It's the biggest wage hike in nominal terms that Lopez Obrador has pushed through since taking office in 2018 with a vow to prioritize the poor and reverse a decadeslong decline in workers' purchasing power.

His administration raised the minimum wage by 16% in 2019, 20% in 2020, and by 15% in 2021.

The wage remains far below United States levels, however, and also follows a marked uptick in inflation this year. The federal minimum wage in the neighboring United States is $7.25 an hour, though the rate is higher in many U.S. states.

The latest increase in the yardstick will move Mexico's minimum wage to 260.34 pesos ($12.15) a day in the northern border zone, home to scores of foreign-owned factories, and 172.87 pesos ($8.07) a day in the rest of country.

Lopez Obrador announced next year's increase during a speech at Mexico City's main public plaza to mark the third anniversary of his assumption of power, praising the consensus reached among government officials, employers and workers.

Mexico's National Minimum Wage Commission (CONASAMI) said the 2022 hike is the highest in nominal terms since 1987, and will bring purchasing power in line to where it was in 1985. The increase will benefit some 6 million people, CONASAMI said.

Business associations welcomed the news.

"We welcome this agreement ... and reiterate our commitment to not leave our colleagues and their families unprotected," top Mexican business lobby CCE said in a statement. It also flagged inflation, which has risen to more than double the central bank's target, as a challenge to still address.

"Mexico's economy is beginning a recovery phase with high inflation levels that we need to contain," the CCE said.