Mexico | Income from work or government transfers?

The Mexican economy has shown better performance than expected, partly explained by the labor market's strength. According to the National Survey of Household Income and Expenditure (ENIGH), job creation and wage improvements have been more relevant for household income than government transfers.

Key points

• Key points:
• Compared to February 2020, the real minimum wage has grown by 38.9%, the average real wage by 11.1%, and the real wage bill by 18.6%. This has been fundamental to improving the growth outlook for the economy.
• The National Survey of Household Income and Expenditure (ENIGH, 2022) shows that compared to 2016, the average quarterly income of households only grew by 0.2% in real terms.
• By components, household income from work grew 2.5%, and transfers for “Benefits from government programs” and “Scholarships from the government and institutions” grew 44.4%.
• Figures from 2016 show that, for every 100 pesos of income from work for households in the first decile, they received 44 pesos in government transfers. In contrast, by 2020, this ratio decreased to 36 pesos.
• It is a priority to address the structural problems of the Mexican economy; wage increases without productivity growth are unsustainable in the medium and long term.

Authors

Geographies

Topics

Tags