Informal Employment Rises to 54.8% in Q2; Unemployment Remains Low and Regional Gaps Persist
Informal employment regained ground in the second quarter of the year. According to data from INEGI’s National Employment and Occupation Survey (ENOE), the Informal Employment Rate stood at 54.8% of the employed population—a half percentage point increase from the same period last year. In the so-called “informal sector”—people working in unregistered economic units—there are now 17.2 million people, 549,000 more than a year ago. This underscores the structural weight of microbusinesses and activities without tax registration or access to social security.
Informality isn’t limited to unregistered businesses. INEGI also considers as informal those who work in formal businesses without benefits, domestic workers without contracts, and agricultural laborers without social security. Considering all these modalities, 32.6 million people worked without benefits or social security coverage—398,000 more than a year earlier. By gender, 13.5 million women (55.3%) and 19.1 million men (54.5%) were working informally, meaning that more than half of the workforce remains outside fully recognized employment schemes.
Territorial differences remain pronounced. The southern and southeastern states have the highest rates of informality: Oaxaca (78.5%), Chiapas (78.0%), and Guerrero (76.0%). In contrast, states with more diversified industrial bases and strong integration into export supply chains show lower rates: Nuevo León (33.7%), Coahuila (34.2%), and Chihuahua (34.3%). This regional gap reflects not only differences in productive structure but also the average size of economic units, business density, and the local institutional capacity to facilitate formalization processes.
At the same time, labor slack indicators changed little. The national unemployment rate held steady at 2.7%, or 1.6 million jobless people—virtually unchanged from a year ago. There were, however, gender differences: unemployment among women rose to 688,000 (up 31,000), while male unemployment dropped to 936,000 (down 33,000). Underemployment fell slightly from 7.4% to 7.2%, and the share of workers in critical conditions—such as low hours or low income—decreased from 36.7% to 32.5%. This suggests improvements in hours worked and incomes, although informal jobs continue to make up a significant part of employment growth.
The rise in informality comes in a mixed context: the labor market has held onto low unemployment and strong demand for workers in export-linked and service sectors, but barriers to formalization persist. Key factors include the prevalence of low-productivity microbusinesses, the costs and complexity of compliance for small operations, limited social security coverage for the self-employed, and fragmented support programs that don’t always incentivize transitions to formal employment.
From a macroeconomic perspective, Mexico has shown resilience in domestic consumption and steady manufacturing activity, driven by the relocation of supply chains to North America. This trend has boosted formal job creation in the north and “Bajío” industrial regions, but its spillover to the rest of the country has been gradual. Meanwhile, inflation remains above the central bank’s target and monetary policy is still restrictive—restraining demand, but also keeping the cost of financing relatively moderate for small businesses. The purchasing power of the minimum wage has improved in recent years, a positive development that exists alongside the pressure microbusinesses may face to absorb higher labor costs without productive or financial support.
Looking ahead to the coming quarters, reducing informality will require combining growth with productivity and targeted public policy: simplifying and promoting tax regimes for small taxpayers, expanding access to credit and digital payments (such as QR-based transfers), providing affordable social security options for independent workers, and offering care services that facilitate women’s participation in formal employment. Investments in infrastructure in the south and southeast and the development of logistics hubs may open up new opportunities, but their impact will depend on the ability to attract businesses that create strong local supply chains and to help microbusinesses transition to formality.
In summary, Mexico’s economy is combining low unemployment with higher informality and sharp regional contrasts. The key challenge is to turn investment and supply chain relocation into formal jobs beyond export clusters—while cutting compliance costs and enhancing incentives for formalization. The direction of inflation, SME financing, and the implementation of productive support policies will help set the tone for the labor market in the second half of the year.
