Mexican Employment Stagnates in May as Real Wages Slip

Mexico's establishment-level employment index (IGPOSE) held flat in May 2026 and fell 1.3% year-on-year, while real remuneration indexes declined on a monthly basis despite modest annual gains. The stagnation signals softening formal hiring even as national household survey data show record overall employment, driven largely by growth in informal and self-employed work.  

Mexico's headline establishment-level employment indicator held flat in May 2026, while a separate gauge of real pay for workers weakened for a second straight month, according to data published by Mexico's National Institute of Statistics and Geography (INEGI). The findings point to a labor market that is losing momentum among the businesses INEGI surveys directly, even as national household data point to record participation across the broader workforce.

The Global Index of Occupied Personnel of Economic Sectors (IGPOSE), which tracks employment across construction, manufacturing, retail, and private non-financial services, registered no change between April and May and stood 1.3% below its level a year earlier. INEGI placed the index at 97.5 points in May, a reading that reflects stagnant hiring at the establishment level, even as the number of people with some form of work nationwide reached a record high. Within the index, salaried personnel showed no monthly movement, while non-salaried workers, those hired through staffing arrangements or paid by fee or commission, edged up only 0.1%.

The annual comparison was less favorable. Non-salaried personnel fell 3.3% and salaried personnel declined 1.1% versus May 2025, according to INEGI. That divergence mirrors a pattern since the fourth quarter of 2023, in which formal employers have shed positions even as informal and self-employment arrangements expand to fill the gap, a dynamic reflected in INEGI's Labor Informality Rate, which climbed to 55.2% in May 2026, up from 54.9% a year earlier. For companies planning headcount in Mexico, the establishment-level data suggest that any near-term hiring recovery is likely to remain concentrated in non-salaried or outsourced categories rather than direct payroll additions.

The Global Index of Remuneration of Economic Sectors (IGRESE), which measures real payments to workers, including fees and commissions, stood at 123.5 points in May and fell 0.6% from April, though it remained 0.6% higher than in May 2025. The Global Index of Average Real Remuneration of Economic Sectors (IGREMSE), which isolates average real income per worker, reached 126.7 points, down 0.5% month over month but up 1.9% from a year earlier. Together, the two remuneration indexes suggest that, while workers are still earning more in real terms than they were 12 months ago, that cushion narrowed during May.

The monthly retreat in both remuneration indexes followed a period of relative resilience in real wages. Average real salaries for registered workers rose 3.1% and the real wage bill increased 4.4% during 2025, gains attributed to sustained minimum wage increases and a tight labor market, though analysts cautioned that slower job creation could eventually limit further income growth. May's data suggest that moderation has begun, even as year-on-year wage growth persists. The pattern is consistent with a labor market in which formal labor costs have risen steadily since 2019, driven by successive minimum wage increases, expanded pension contributions, and longer statutory vacation entitlements, leaving companies with less room to absorb additional payroll growth.

The stagnation also arrives as employers recalibrate compensation strategy toward direct financial relief rather than headline pay increases. A survey conducted by Pluxee, found that average formal monthly wages declined to MX$7,489 in the first quarter of 2025 from MX$7,879 a year earlier, prompting workers to prioritize grocery vouchers, savings funds, and transportation support over long-term benefits. The same survey recorded a 43% turnover intention rate among Mexican employees, with higher salaries cited as the leading reason workers consider leaving their jobs, ahead of benefits packages and career growth opportunities.

Looking ahead, the establishment-level stagnation contrasts with INEGI's household survey, which reported a record 60.4 million employed people nationwide in May 2026. That gap, driven largely by growth in self-employment and informal arrangements rather than salaried positions at the surveyed economic units, underscores a structural shift that companies operating in Mexico should factor into workforce planning.  

With the minimum wage having risen 13% in January 2026, and further increases expected under the federal government's wage policy, employers face continued upward pressure on labor costs even as broader employment growth at the establishment level remains muted. Sector-level data for June, due from INEGI in the coming weeks, will indicate whether the flat reading in May marks a temporary pause or the start of a longer slowdown in formal hiring, and whether real remuneration resumes its earlier upward trend or continues to soften.