Mexico | Progress in reducing wage inequality in formal employment

Summary

The average real wages of formal workers in Mexico have shown notable growth, accompanied by a significant improvement in workers' purchasing power, especially in the lowest income deciles, which indicates progress towards lower wage inequality.

Key points

• Key points:
• The average real wage of formal workers in Mexico grew by 25.3% between December 2018 and March 2024, outpacing the increase recorded in the previous 18 years.
• An improvement in wage distribution is observed, with more significant growth in lower-income deciles.
• The share in the real wage bill for deciles one to five increased from 19.4% to 25.6%, indicating a decrease in wage inequality.
• The progress in reducing inequality stands out, given the real wage stagnation experienced over decades.
• Wage improvements will be limited if actions to boost the country's competitiveness are not implemented.

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