Increases in the minimum wage and social programs reduced inequality in Mexico, confirms economist

The increase in the general minimum wage and welfare programs have helped reduce inequality in the country in the last decade, considered economist Ricardo Gómez-Carrera.

The researcher, who participated in the preparation of the World inequality report 2026 (https://tinyurl.com/hr6yycmr), he indicated in an interview with The Day that Mexico continues to be one of the most unequal countries in the world, but “there has been a reduction in inequality in recent years.”

He explained that redistribution policies, such as progressive taxes and transfers, are effective around the world, but particularly in Latin America.

He specified that in Mexico these transfers include government programs such as the Benito Juárez scholarships, as well as those made through public services such as health and education, just to mention one example.

“The part that has helped the most to reduce inequality in Mexico has been the increase in minimum wages and transfers have also had to do with it.”

He noted that studies observe that increasing the minimum wage helps reduce unemployment in economies.

Last August, the National Institute of Statistics and Geography (Inegi) confirmed that 13.4 million Mexicans escaped poverty between 2018 and 2024 (https://tinyurl.com/yc5wuhne). In addition to this, between the previous six-year term and the current one, due to the minimum increase, purchasing power has recovered 154.2 percent (https://tinyurl.com/4pkpy9z4).

“There are two types of policies that we see that can help reduce inequality. One of them is the redistribution part. Another is predistribution, which alters inequality a little before earning the money. So, a predistribution policy is the increase in minimum wages, for example, or workers’ rights.”

He highlighted that despite these advances, Mexico is among the 15 countries with the greatest inequality in the world. He commented that one of the main ways to reduce inequality is investment in education and health.

He considered directing resources toward these two key areas to reduce this condition, as they increase income and opportunities for current and future generations. “It is a policy that helps the generation that benefits, but also the next one,” he indicated.

“Mexico has made good efforts to expand the tax base, to increase revenue, and I would like this to be reflected in more public investment in health and education, which are key to reducing inequality.”

Regarding tax reform, Gómez-Carrera considered that instead of increasing taxes on those who already pay, the tax base should be expanded so that the richest pay their proportional part.

He specified that it is necessary to tax the richest, because they are the ones who escape progressive taxes and the resources obtained can finance education and health programs.

“Mexico has a government with high approval, a left-wing government, and can be a champion in this effort to tax the highest part of the distribution. It can join Brazil and South Africa, which are making considerable efforts to implement a 2 percent wealth tax,” he highlighted.

‘“Mexico has done well in terms of reducing inequality in recent years. I think there is still a lot of room to do,” he emphasized, before insisting that it is necessary to invest more in education and health.