Salary dispersion, as the differences between what workers earn in different regions of the country are known, has decreased due to the increase in salaries in the last nine years, but it remains uneven between the four areas into which it is divided. the nation, according to data from the Bank of Mexico (BdeM).
The Report on regional economies for the third quarter of 2024 indicates that throughout the Mexican territory there are variations in the salaries of those who work formally, which is mainly attributed to three factors.
The characteristics of the people, in this case education or skills; the characteristics of the companies, which includes productivity; and the selection process in the labor market.
According to the central bank’s analysis, it was found that in all regions the three components contribute substantially to the variation in salaries, although the component of differences between people is the most relevant, followed by that of companies.
The BdeM identified that between 2014 and 2024, a reduction in salary dispersion has been observed in all regions, accompanied by a lower relevance of salary differences between companies.
This behavior is explained by an increase in the lowest wages of the distribution, and not by a decrease in the highest wages
says the study.
Regarding this evolution, he explained that in 2014 the central region had the highest salary dispersion, followed by the south, the north center and the north, which showed a level of salary dispersion similar to each other.
He noted that in all areas, wage variance decreased between 2014 and 2023, starting in the south from 2015, in the center in 2016, just when increases in the general minimum wage began to improve.
However, in all regions it improved from 2018, which coincides with the same factor. The increases in the minimum wage starting in 2018 may have contributed to reducing wage differences between companies
he pointed out.
Despite this, the study shows that by 2023, the central zone still had a higher salary variance, while the others showed similar levels of dispersion between them.
The Bank of Mexico indicated that although wage differences have decreased over time, gaps remain between regions, because while in the north and center the business component is lower due to possible higher productivity, in the south the opposite is true. That is, this factor weighs more.
Public policies that are aimed at improving the skills of low-wage workers and the performance of less productive companies could contribute to reducing wage dispersion at the national and regional level.
concludes the study.