In today’s rapidly changing global economy, companies are rethinking where and how they manufacture. Rising costs in Asia, ongoing supply chain disruptions, and the need to be closer to key markets have accelerated the search for smarter production locations. Mexico has quickly emerged as a leading choice offering the perfect balance of affordable manufacturing labor rates, skilled labor, and strategic proximity to North America.
Mexico’s Labor market
Mexico offers a combination of competitive labor costs and highly skilled talent, with an important pool of young labor force.
According to official government data (DATA MEXICO, 2025), in the first quarter of 2025, the economically active population of México was 60.5M people. The workforce reached 59M people (40.7% women and 59.3% men) with an average monthly salary of $6k MX.
Labor Costs and Productivity
Even though Mexico has had an important increase on its minimum wage, as shown in the graph below, and an increase generally in manufacturing wages overall, it still remains highly competitive:
Mexican labor costs are significantly lower than those in the U.S. and Canada. While Mexico`s unskilled labor ranges from $4.00USD to $6.00USD per hour, compared to $17.00USD to 23.00USD per hour in United States. Learn more about wages comparison with US in our past blog.
Furthermore, when looking at China manufacturing wages vs Mexico, labor rates in Mexico are nowadays lower than China. The average minimum wage in China which varies from region to region, are now higher than in Mexico. In regards to mid- and higher-skilled manufacturing labor, it is considered Mexico’s manufacturing labor costs are 20% lower than in China.
Moreover, Mexico is now known for having a highly-skilled workforce and its labor force is also relatively young, while China’s is aging and declining due to its family planning policies.
While at the same time is important to consider Mexico’workforce maintains high productivity and quality standards, particularly in industries such as automotive, aerospace, electronics, and medical devices.
Regional Variations in Labor Rates
It’s important to note that labor costs in Mexico differ by region:
- Northern border states like Nuevo León, Baja California, and Chihuahua typically see higher wages due to demand and proximity to the U.S.
- Central regions often offer lower rates while still providing access to robust infrastructure, growing industrial clusters, and a skilled workforce.
This flexibility enables companies to choose locations that align with both their budget and operational needs.
Long-Term Outlook
Looking ahead, Mexico’s competitive labor environment is expected to remain a major driver of investment. While inflation, labor reforms, and currency fluctuations may influence costs, Mexico’s young workforce, strategic location, and deep integration with North American markets ensure its continued relevance as a top manufacturing destination.
Expanding operations in Mexico can be complex without the right local expertise. At Mexcentrix, we specialize in helping international companies establish, manage, and grow their manufacturing operations in Mexico. From our shelter services to HR Services, payroll management, and ongoing administrative support, our team ensures a smooth and cost-efficient setup.
Contact us for a free consultation on general labor costs in Mexico.