The recent increase of 13% to minimum wage For the year 2026, it will generate a two-way effect in the labor and social security markets in Mexico, significantly boosting the amount of minimum pensions, but exacerbating the phenomenon of salary compression in corporate structures.
According to an analysis by the consulting firm WTWthis adjustment consolidates the recovery of purchasing power started in the previous six-year term, establishing a new floor for those who are close to retirement under the Law of ’97.
Javier Alarcón, WTW Retirement leader, explained that minimum social security pensions maintain a direct relationship with the minimum wage, which allows these increases to define a more robust platform for future retirees.
The specialist highlighted that, Historically, the minimum wage grew below inflationa trend that has been reversed: “now it is recovering purchasing power and the recovery it had in the last six-year term, added to what is going to happen in the current government, which is estimated at 12% on an annual average, is going to make these minimum pensions take off much more.”
The firm’s projections show a tangible jump in pensioners’ income from one year to the next. While a person who retires in 2025 With the right to a minimum pension you receive approximately 8,476 pesos per month, those who do so in 2026 under the same conditions will receive 9,577 pesos.
However, Alarcón clarified that once the pension is granted, the subsequent adjustment is strictly governed by the inflation published by Inegi.
On the other hand, salary dynamics within organizations face the challenge of “compression”, a process where the base of the pyramid grows at a rate that higher levels cannot replicate, reducing the distance between hierarchical ranks.
Javier Brassel, director of Compensation Surveys for WTW México, warned that this situation is forcing companies to rethink their strategies to maintain a coherent progression. According to Brassel, “our structure has been flattening in terms of compensation, we are experiencing a phenomenon of salary compression; the increase in the minimum wage is not only impacting those who receive that salary.”
This phenomenon has already transcended operational personnel, reaching technical and professional levels. WTW figures reveal that, in the last seven years, salaries in these sectors have grown on average by 7.5% and 6.3% respectively, evidencing that the benefit of the minimum increase decreases as the worker’s income level increases.
For more than half of the companies participating in their studies, the current challenge lies in how to incentivize medium and high organizational levels without compromising financial viability in the face of the constant push for base salaries.
