Informal employment climbs in Mexico and Panama amid regulatory challenges

Mexico’s informal economy has surged from about 16 million workers in 2010 to an officially reported 33.4 million in 2026, with some estimates reaching 38‑39 million. Business leaders attribute the rise to cumbersome regulations and rising labor costs that push firms to close or operate outside the formal system. The shift erodes tax revenue and reduces contributions to social programs such as IMSS and Infonavit, while street‑vendor groups and criminal extortion networks profit from the growing informal sector.

In Panama, the unemployment rate hovers around 10 % and more than half of non‑agricultural workers are employed informally, affecting over a million people. Although the economy is projected to grow above 4 % this year, job creation lags behind GDP expansion. The Ministry of Labor reported a 25 % rise in new contracts in Q1, driven by job fairs and public‑private partnership programs aimed at youth, women and indigenous communities. Experts note that sectors such as construction and agro‑industry remain weak, while logistics, finance and trade demand more skilled labor. Both countries face the challenge of converting economic growth into quality, formal jobs to broaden tax bases and improve social protection.