The secret sauce for wealth in Mexico

Income has increased significantly and there seems to be one common factor.

Its formal employment. That is what most states that saw significant increases in household income between 2022 and 2024 have in common—probably. The same goes the other way; states with poor job performance did badly on the income ranking, according to the most recent survey conducted by Mexico’s statistics agency, INEGI.

That more job equals more income might seem like an obvious statement but, for decades in Mexico, formal employment didn’t quite line up with the economic wellbeing of the population. From the 1980s until the end of the 2020s, the principal approach was to depress wages to attract foreign direct investment. It worked—in that manufacturing boomed without leaving much value for the workers in Mexico.

By 2018, the Mexican minimum wage had not grown in real terms since the turn of the century. Then, a left-wing government under the Morena party was elected. In consultation with the private sector, the minimum wage was more than doubled within four years. Suddenly getting a job that paid taxes and social security also meant getting a sizable wage increase, particularly between 2020 and 2024.