Overview of the Mexican Labor Market
The National Employment and Occupation Survey (ENOE) for November 2024 and the Global Indexes of Personnel and Remunerations by Economic Sectors (IGPERSE) for October, released by Mexico’s National Institute of Statistics and Geography (Inegi), reveal a smaller, more informal labor market with flatter wages.
While unemployment remains low, job quality is declining. The Employment and Occupation National Survey (ENOE) for November 2024 and the Global Indexes of Personnel and Remuneration by Economic Sectors (IGPERSE) for October, released by Mexico’s National Institute of Statistics and Geography (Inegi), reveal a smaller, more informal labor market with flatter wages.
Key Figures
- The Economically Active Population (PEA) was 61.5 million in November, a decrease of 152,000 compared to November 2024.
- The economic participation rate dropped from 60% to 59%.
- Women were more affected, with their occupation falling by 440,000 to 24.3 million and their participation rate decreasing from 46.7% to 45.1%.
- Women’s unemployment rose to 714,000 from 705,000 the previous year.
- Men’s occupation increased by 278,000 to reach 35.5 million, but their participation rate also fell from 75.1% to 74.6%.
- The Non-Economically Active Population (PNEA) rose to 42.8 million, an increase of 1.8 million from the previous year.
- 5.6 million people are available for work but not actively seeking employment.
Sector-wise Changes
The largest job losses occurred in Social Services (education and healthcare), where 303,000 jobs were lost, including teachers, school staff, doctors, nurses, and hospital employees. The Government and International Organizations sector gained 324,000 positions.
- – Restaurants and accommodation: -223,000
- – Manufacturing: -140,000
- – Primary sector: -86,000
- – Diverse services: -67,000
- – Extractive industry and electricity: -32,000
- + Transportation and storage: +190,000
- + Commerce: +66,000
- + Professional, financial, and corporate services: +41,000
- + Construction: +17,000
Wage and Employment Trends
According to the IGPERSE, real average wages increased by 3.8%, while the occupancy index decreased by 0.7%. The cost of payroll rose, and staff was reduced.
- The salary pyramid flattened: those earning up to the minimum wage increased by 744,000 to reach 25.8 million (43.2% of the employed population).
- Those earning between 1 and 2 minimum wages grew by 1.2 million.
- Those earning more than 5 minimum wages decreased by 20% (-111,000) and now represent only 0.7% of the employed population.
- The salary range of 3 to 5 minimum wages lost 101,000.
Impact on Households and Policy Recommendations
Although unemployment is low (2.7% or 1.6 million), job quality has deteriorated:
- Informality: 54.8% (32.8 million)
- Critical conditions: 37.5% (up from 34.5%)
- Underemployment: 7.2% (4.3 million)
Many households rely on transfers for income: 18% of total income (up to 50% in the poorest deciles). An average household receives $4,600 per month, while multiprogram households receive over $13,500.
Net formal job losses (-442,000) erode the ISR, with a projected fiscal deficit of 4.4% of the GDP.
Policy Suggestions
- Offer temporary incentives for formal hiring at 3 to 5 minimum wages (tax quotas or credit for each sustained position created).
- Encourage formalization with rewards: genuine simplification, lower entry costs, and preferential access to credit and public procurement for those who remain formal.
- Implement a selective industrial policy in high-value manufacturing and services, with verifiable commitments to formal employment and training.
