Informal Work Pays More Than Formal Jobs: CEESP

Mexico's informal economy now offers higher hourly earnings than formal salaried work, with self-employed informal workers earning MX$75.7 per hour versus MX$66.3 for formal employees, per CEESP analysis of June 2026 INEGI data. Informality affects 55% of Mexico's 33 million occupied workers, reflecting weak GDP growth, high uncertainty, and elevated labor costs that continue to suppress formal job creation. The trend carries implications for compensation benchmarking, supplier compliance, and workforce planning among companies operating in Mexico.  

Working in Mexico's informal economy can now generate higher hourly earnings than working formally, according to the Center for Economic Studies of the Private Sector (CEESP). Citing June figures from Mexico's National Institute of Statistics and Geography (INEGI), the private-sector think tank reports that self-employed informal workers earned MX$75.7 (US$4.38) per hour, compared with MX$66.3 (US$3.83) for salaried formal employees. Informality now spans 55% of Mexico's occupied population, equivalent to 33 million people.

"The informal economy has been an alternative for a large number of people who need a source of income to support their households, which can, at times, even be more profitable than formality," CEESP explains in its weekly analysis. The organization, founded in 1963 to provide the business sector with independent research on the country's economic conditions, frames the wage gap as a symptom of a broader structural problem rather than an isolated statistic: with formal job creation stalled, informal work has become not just a fallback option, but in many cases the more lucrative one.

The imbalance reflects conditions CEESP has flagged repeatedly through 2026. The think tank points to weak economic growth, elevated uncertainty, and high labor costs as the main forces discouraging investment, without which formal job creation cannot accelerate. INEGI's June data reinforces that reading: the informal workforce grew by 105,347 people compared with June 2025, even as overall employment showed signs of strain. Access to healthcare through formal institutions also eroded, with 179,000 fewer occupied workers holding such coverage over the past year, while the population without access grew by 219,626.

That erosion lines up with broader labor-market trends through 2026. INEGI's own ENOE survey put the national labor informality rate at 55.0% in June, up from 54.8% a year earlier, with roughly 33.1 million people working without formal protections, according to INEGI's June 2026 bulletin. Mexico added a record 60.4 million employed people in May, driven largely by self-employed and unpaid workers rather than salaried formal positions, a pattern that has persisted for months and that leaves wage growth concentrated in lower income brackets.

The wage-quality dimension CEESP highlights compounds a separation already visible in Mexico's employer data. Formal employers registered with the Mexican Social Security Institute (IMSS) declined 10.4% since the fourth quarter of 2023, while informal employers expanded 11.6% over the same period. 

CEESP also warns of a wider pattern of labor precarity beyond earnings. The segment of occupied workers receiving up to one minimum wage represented 52.4% of the workforce in June, once categories with no reported income are excluded, up sharply from 19.8% in 2018. For companies benchmarking compensation or assessing supplier reliability, that concentration signals downward pressure on wages across large segments of the labor market, alongside persistent gaps in social security coverage among the workforce that informal suppliers and contractors typically draw from.

Looking ahead, CEESP frames the path to reducing informality around strengthening the conditions for formal investment rather than addressing wages directly. "To strengthen a quality formal labor environment, it is essential to have a business climate that stimulates productive investment, facilitates the creation of new companies, and consolidates the operation of existing ones within formality," says the organization. Absent that shift, CEESP suggests the current dynamic, in which informal work offers comparable or superior earnings alongside greater operating flexibility for millions of Mexicans, is likely to persist through the remainder of 2026.