At the end of May, the results of the measurement of labor poverty in Mexico corresponding to the first quarter of 2026 were released. The results were very positive: labor poverty continues to decline and is at its lowest levels since 2005, the year in which this indicator began to be measured regularly on a quarterly basis.
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If the indicator is measured with respect to household per capita income, labor poverty stood at 30.7% of the population, representing a decrease of around 15 percentage points from the peak of 46% reached in the third quarter of 2020 (i.e., during the pandemic). When labor poverty is measured solely with respect to the employed population, this indicator reaches a level of only 9.7%, being the first time in history that this value falls below 10%. In this case, the reduction with respect to its highest point is more significant, as labor poverty among the employed population reached 18% in the last quarter of 2014, which implies that the cumulative reduction with respect to that point is already close to 50%.
It is important to clarify two things regarding the labor poverty indicator in Mexico: first, it is an indicator that only uses labor income to measure poverty, meaning it does not include income from any other source: neither remittances, nor private transfers, nor income from government programs, etc.; second, the basket of goods used to define whether one is poor or not is solely the food basket, so it is considered an indicator of extreme poverty. Precisely because of the foregoing, the reductions described above become more important, as this implies that the number of people in extreme poverty in Mexico is decreasing as a result of the strengthening of labor income.
On the other hand, the results of labor poverty in Mexico are very useful because they allow us to have an idea of what to expect regarding the official measurement of poverty in Mexico in 2027. Let us remember that official poverty is measured only every two years, since its estimation uses data from the National Survey of Household Income and Expenditure (ENIGH), which is only conducted in Mexico every two years. The next ENIGH will not be conducted until the second half of this year, and the official poverty results will not be available until 2027. In this sense, the already available labor poverty indicators can serve as a first approximation of what has happened in this area between 2024 and 2026, that is, during the administration of President Claudia Sheinbaum. Let’s look at some of these figures. In our comparisons, we will use the figures from the first quarter of 2024, so as not to bias the result by seasonal factors.
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In the case of the total population in labor poverty, it decreased from 35.8% in the first quarter of 2024 to 30.7% in 2026, a significant reduction of more than 5 percentage points. In the case of labor poverty among the employed population, it decreased from 12% in 2024 to 9.7% in 2026, a reduction of almost 20% (2.3 percentage points) in just 2 years. In this case, by the way, the reduction was more significant for women than for men, as for the former the reduction was 3.5 percentage points (from 15.9% to 12.4%), while for the latter it was only 1.4 percentage points (from 9.2% to 7.8%).
Other relevant results are the following: the reduction of labor poverty between 2024 and 2026 was widespread, as it decreased in 29 of the country’s 32 entities, only increasing in the states of Campeche, Jalisco, and San Luis Potosí. The reduction of the employed population in labor poverty in predominantly indigenous municipalities decreased by seven percentage points between 2024 and 2026 (from 38.6% to 31.6%), representing the most significant decrease in this population group since records began. On the other hand, labor poverty among older adults who are still working continues to decrease, as it went from 27.8% to 24.3%, its lowest historical level. Finally, labor poverty in the formally employed population is practically eradicated, as it decreased from 1.1% to 0.7%, while for informal workers, labor poverty decreased from 20.3% in 2024 to 16.6% in 2026.
As can be seen, this is a very favorable performance in the labor poverty indicator, despite the fact that economic growth in the country has been extremely low in the 2024-2026 period. This highlights the importance of the continued increase in minimum wages during this period and in labor income in general. Going forward, however, this wage mechanism could begin to be exhausted, so the most effective way to continue reducing labor poverty in the country will be through an acceleration in the pace of economic growth.
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