Mexico’s labor poverty rate just hit a new low, but the national number hides sharp regional contrasts. New figures show that paychecks cover a larger share of the basic food basket than a year ago. Some industrial states posted outsized drops, while a few places moved in the opposite direction. The data also point to a structural factor that keeps many families exposed: informal work. What changed in late 2025, and what should residents watch as 2026 wage and job trends take shape?
A record low that still leaves many exposed
INEGI’s latest update puts labor poverty at 32.3% in late 2025. That is the lowest reading in the series. The indicator tracks people whose labor income per person cannot buy the basic food basket. INEGI builds it from ENOE labor income and the basket’s current value. Households are considered affected when work pay cannot support all members. It is not the full poverty measure. It is a quick check on whether wages keep up with food prices. Nationally, the rate also fell within the year. It moved from 34.3% in the prior quarter to 32.3%. The drop was larger in rural areas. The rural rate fell from 50.7% to 46.6% over the year. In cities, it fell from 30.8% to 28.1%. Other income can fill gaps, but this measure isolates labor earnings. Even after the improvement, food affordability remains tight for many homes. Population-based estimates put the affected group at roughly 42 million people.
Where the shift was most visible
The improvement was broad, but uneven. INEGI reports labor poverty fell in 25 states from late 2024 to late 2025. The sharpest annual drops were in Querétaro (down 13.4 points), Morelos (down 10.3), and Aguascalientes (down 7.2). In Querétaro, the rate fell from 33.2% to 19.8%. Aguascalientes also improved, moving from 35.9% to 28.7%. A smaller group moved the other way. Michoacán, Durango, and Mexico City posted the largest annual increases. By year-end, Baja California Sur had the lowest rate at 14.2%. Colima and Baja California followed at 17.3% and 18.2%. At the other end, Chiapas led with 59.8%. Oaxaca and Guerrero followed at 56.6% and 51.3%. Places with large manufacturing bases often show faster wage pass-through. Tourism-heavy states can post low rates, but results depend on job stability and pay. Querétaro also led the quarterly decline.
Income gains did most of the work
Behind the headline is a rise in real labor income. INEGI estimates real labor income per person reached 3,468.71 pesos a month in late 2025. That was 5.3% higher than a year earlier, after inflation. The gains were broad. INEGI reports real income rose in the top fifth of income earners. The lowest fifth saw the largest jump. Wage inequality also eased. The Gini coefficient fell from 0.5007 to 0.4885 over the year. Real labor income per person rose in 24 states. The largest gains were in Querétaro (22.1%), Morelos (20.2%), and Sonora (18.1%). The biggest declines were in Michoacán (-7.6%), San Luis Potosí (-5.0%), and Mexico City (-4.2%). Income still depends on job quality. Average monthly labor income in formal employment was 10,609.74 pesos. In informal work, it was 5,455.61. The overall real wage bill rose 8.3%. These shifts reduce the share of households below the food-basket line.
Why formality and local economies keep showing up
The state pattern in Mexico points to a familiar divide between formal jobs and informal work. Where more workers are on payrolls with benefits, average pay is higher and more stable. That tends to reduce labor poverty more quickly when wages rise. Areas with high informality also tend to show higher labor poverty. Informality remains near 55% nationally. In tourism economies, the rate can look low, but many jobs remain seasonal. In manufacturing hubs, wages often move with export demand and investment. Policy also matters. The national minimum wage rose again on January 1, 2026, continuing the multi-year run of increases. IMSS data show the average registered base salary reached 662.8 pesos per day in January. It was the highest for any month on record. For expats, these shifts can show up in the everyday economy. They can affect hiring costs, service wages, and price pressures in local markets.
What to watch next
This record-low does not eliminate the structural risks. Mexico’s labor market remains heavily informal, limiting benefits and wage stability. Labor poverty can also swing with food prices. A jump in the cost of the basic food basket can offset wage gains, especially in rural areas. It can also rise if job growth shifts toward lower-paid services. The indicator is now published by INEGI after a transfer of duties from CONEVAL. INEGI says it is keeping the existing technical methodology to preserve comparability. The next test is whether wage growth continues to outpace inflation without slowing hiring. INEGI’s calendar sets the next update for May 27, 2026, covering the first quarter of 2026. If the decline continues, it would point to stronger food affordability. If it stalls, it will highlight where wage gains are not reaching enough workers. Sustained progress usually requires higher pay and more workers moving into formal employment over time.
With information from El Universal, INEGI, IMSS, El País
