Introduction
The Mexican Social Security Institute (IMSS) formal employment has shown a worrying trend in 2025, with minimal job creation, loss of small employers, and regulatory hurdles that have stifled productivity, growth, formalization, and national labor quality.
IMSS Formal Employment Performance in 2025
The IMSS formal employment performance in 2025 is the worst in a century:
- – The increase in formal jobs in 2025 is less than the average annual growth of the previous four six-year terms: 72,000 vs. 207,000 in 2001-2006, 397,000 in 2007-2012, and 670,000 in 2013-2018.
- – The average annual growth rate of new affiliations was also lower: 0.3% in 2025 vs. 1.6% in 2001-2006, 2.7% in 2007-2012, and 3.8% in 2013-2018.
- – In 2025, new affiliations were fewer than in the first year of the last four administrations.
Employer Side: Declining Small Employers
On the employer side, the number of registered employers at the Institute suffered significant drops in 2024 and 2025:
- – 17,911 and 25,667, respectively;
- – The loss of small employer registration in 2025 affected only companies with 50 workers or fewer.
These declines contrast sharply with the general growth throughout the century and with the size of occasional reductions: 11,000 in 2023 and 2024 combined, 7,000 in 2009, and 1,400 in 2020, the latter under severe external crises.
Historically, numerous administrative measures intended to benefit workers have discouraged formal economic activity by increasing the cost of creating new businesses, especially small ones, and hindering their growth.
As a result, the number of informal or stagnant formal businesses has been preserved and possibly increased. In both cases, the outcome is detrimental to productivity. Clearly, the informal sector is much less productive: it employs 55% of the labor force and generates only 26% of the national GDP.
Moreover, the limited size of micro and small enterprises restricts their productivity since they struggle to specialize their workforce, acquire capital inputs for increased productivity, or secure financing for growth.
Key Questions and Answers
- Q: Why is the 2025 IMSS formal employment performance so poor? A: The 2025 formal employment performance is the worst in a century, with minimal job creation, loss of small employers, and regulatory hurdles that have stifled productivity, growth, formalization, and national labor quality.
- Q: How have small employers been affected? A: The number of registered small employers (up to 50 workers) has significantly decreased in 2024 and 2025, contrasting with the general growth throughout the century.
- Q: What are the consequences of these administrative measures? A: While improving wages and labor perks should be a central policy goal, it must result in or be accompanied by increased productivity. Otherwise, measures like raising the minimum wage, reducing the workweek, more vacation days, and higher social contributions will harm the productive capacity and labor quality.
