Informality Drives 98% of Mexico's 2Q26 Job Growth

Informal employment absorbed 98% of the 487,434 jobs Mexico added in the second quarter of 2026, pushing the national informality rate to 55.1% and ending two consecutive quarters of decline, according to INEGI's National Survey of Occupation and Employment. More than 33 million workers now operate outside social security coverage and legal protections, a shift relevant to companies benchmarking labor costs, sourcing local suppliers, and assessing compliance risk. 

Mexico's second-quarter labor market added 487,434 people to the occupied population between April and June, and 98% of that growth landed in informal work, according to the National Survey of Occupation and Employment (ENOE) published by the National Institute of Statistics and Geography (INEGI). The result pushed the Labor Informality Rate to 55.1%, reversing two consecutive quarters of decline and reaffirming that job creation in Mexico continues to skew toward positions without social security coverage or legal protections.

INEGI reported that informal employment grew by 457,803 people in the April-to-June period, compared with just 29,631 additional formal positions. More than 33 million people now work informally, a share that rose 0.3 percentage points on a quarterly basis. The Occupation Rate in the Informal Sector, which measures only employment inside informal economic units such as unregistered micro-businesses, reached 33.7% of the employed population, its highest quarterly reading on record.

The shift reflects a labor market absorbing more participants without generating proportional formal opportunities. Mexico's unemployment rate ticked up to 2.7% of the Economically Active Population (EAP), extending a two-quarter increase, while the Not Economically Active Population fell by 332,684 people compared with the previous quarter. Read together, the two indicators point to more people entering the job search while facing difficulty securing salaried, formal positions, through the first half of 2026, when self-employment and unpaid work outpaced formal hiring nationally.

Within informal employment categories, only work inside informal economic units expanded during the quarter, adding 560,147 people. Informal employment located inside otherwise formal businesses declined by 102,344 positions, indicating that formal companies are not the main channel absorbing the quarter's informal job growth, but rather that the expansion is concentrated among unregistered micro-businesses and self-employment arrangements outside any corporate structure. Underemployment, meanwhile, rose 0.3 percentage points to 6.9% of the occupied population, capturing workers who need more hours than the market currently offers them, a signal that underlying labor demand remains weaker than the headline occupation figures suggest.

The quarterly reversal follows a first half of 2026 in which Mexico's occupied population grew by 412,000 people even as monthly Mexican Social Security Institute (IMSS) registrations showed uneven formal hiring across states, according to prior Mexico Business News reporting. The overlap between record headline employment and expanding informality creates a data environment in which companies benchmarking wages, sourcing local suppliers, or assessing labor-cost scenarios must look beyond top-line occupation figures to assess workforce quality in the segments where they operate.

The federal government's National Development Plan (PND) set a target of reducing the informality rate to 48.9% of the occupied population by 2030, under Objective 3.3 of its Moral Economy and Labor axis on promoting decent work. With the latest ENOE reading, that target remains distant: Mexico would need to cut 6.2 percentage points from the informality rate over the next four years to meet it. A report by the organization México, ¿cómo vamos? (MCV), found that informal work declined only 4.5 percentage points over the past two decades, underscoring the scale of the policy challenge.

"Labor informality is a very broad issue, with different implications in terms of regulation and public policy because it varies significantly by sector, region, education level, and gender, and addressing the problem requires coordinating all these policies to achieve the reduction outlined in the National Development Plan," says Axel Gonzalez, Data Coordinator, MCV.

For companies operating in Mexico, the data reinforces a structural reality: employment growth alone is not a reliable proxy for formal, protected job creation, and workforce strategies premised on labor-market expansion should account for the informality overhang shaping compensation, compliance, and productivity across the supply chain. As Mexico's economy adds hundreds of thousands of workers each quarter, the composition of that growth, not just its size, will determine whether the country narrows or widens the gap between record employment headlines and the formal opportunities its 2030 policy targets assume.