Income Gap Narrows as Wages Rise in Mexico

Mexico’s labor income has increased across nearly all income levels between 2018 and 2024, contributing to a reduction in income inequality, according to a new analysis of the National Survey of Household Income and Expenditures (ENIGH) 2024. The data also reflects the impact of recent labor policy reforms and changing dynamics in the country’s social assistance programs.

"The main driver of income growth among households was labor income,"reports México, ¿Cómo Vamos?, based on calculations that isolate monetary income and distribute it per household member. This trend, recorded across most percentiles of the income distribution, contrasts with a decline in the highest 1% and points to broad-based income recovery since the COVID-19 pandemic.

The ENIGH, conducted every two years by the National Institute of Statistics and Geography (INEGI), provides detailed insight into income composition and expenditure patterns among Mexican households. According to INEGI, the average monthly household income in 2024 stood at MX$25,955, a 10.6% real increase compared to 2022. Labor income represented 65.6% of that amount.

This growth pattern is consistent with employment trends captured by the National Employment Survey and national accounts showing a higher share of salaries in GDP. Between 2018 and 2024, labor income grew over 20% for most income percentiles. Only the top 1% registered a decline. For the lower percentiles, especially the bottom 10%, the increase in labor income offset a surprising drop in government transfers.

The ENIGH data also shows that inequality, measured by the Gini coefficient, fell by 3.6 percentage points over the six-year period. This reduction occurred as lower-income households saw proportionally larger income gains than higher-income ones.

Despite these gains, the report notes that income from capital remains highly concentrated and underrepresented in the survey. While capital income accounts for up to 40% of GDP, it represents only 6%-7% of reported household income in the ENIGH, primarily due to survey sampling limitations. Adjustments are being explored to better reflect this segment.

Further reinforcing the centrality of labor in the income structure, the report indicates that the elasticity of the Gini index to changes in labor income increased from 3.6% in 2018 to 4% in 2024. In contrast, the redistributive effect of government transfers remained stagnant, raising questions about the structure and targeting of social programs.

In parallel to ENIGH findings, the Mexican Social Security Institute (IMSS) announced a record increase in formal employment in July 2025, driven largely by the incorporation of platform workers under new labor reforms. Over 1.26 million new positions were registered, bringing the total to over 23.5 million. The move followed the launch of a pilot program for digital platform workers, marking a significant shift toward formalizing the digital economy workforce.

According to IMSS, 83% of registered platform workers are affiliated with a single company, and 89% are men. Most are under 30 years old. Workers with income above the minimum wage will be formally recognized as subordinate employees, granting them full access to healthcare, pensions, and other social security benefits. Those with lower income levels will still retain coverage for work-related risks.

These labor market shifts, combined with rising labor income and narrowing inequality, reflect a broader transformation in Mexico’s economic and social landscape. The government, through the Ministry of Labor and Social Welfare, maintains that despite persistent challenges, policies remain focused on inclusive and equitable growth.