11,548 Pesos Average Pay, 13.8% Own Revenue: Mexico's State Competitiveness Ledger Where the Jobs Line Is Falling

Introduction: The number that talks about jobs, not pay Two numbers sat side by side on the page. One was 11,548. The other was a movement from 0.4 to minus 0.9. The first is the average full-time monthly salary across Mexico's states, in pesos. The second is the growth rate of registered formal employment, which had been holding at a decimal-positive figure and has now crossed into negative ground. Two numbers in the same report, telling two entirely different stories. The pay story is easy, attractive, ready for a headline. The jobs story is quiet, technical, and for exactly that reason more urgent. I have spent nineteen years counting things before writing about them. That habit came from training grounds, where counting a session's repetitions teaches you a squad's temperament. The habit does not leave when the beat changes. Reading the 2026 edition of the Mexican State Competitiveness Index, I read it that way — not who earns how much, but who generates how much of their own revenue, and how many people that revenue seats in formal work. The answer is uncomfortable. The states at the top of the pay table are carrying the burden of being at the top, and the states at the bottom are not merely behind — they are stuck inside a broken transmission chain where education is rising and jobs are falling. What the index is, and what it is not IMCO — the Instituto Mexicano para la Competitividad — is a non-profit policy research institute. Its State Competitiveness Index ranks Mexico's 32 federal entities on economic and institutional indicators. The headline subject of this edition is pay: which states pay better. But the structure underneath stands on four pillars — labour market, human capital, infrastructure and fiscal capacity, and institutional environment. Let me be clear about what this index is not. It is not a club balance sheet. It is not a league table. It is not squad valuation. There is no dressing room here, no manager, no match. Anyone trying to read this report through a sporting lens should stop early. What is here are two things: an evidence-based labour-economics ledger, and a hard question about sub-national public finance. My notebook keeps those two in separate columns. The institution that builds the index supplies numbers; the numbers then talk to each other, and inside that conversation the real story hides. Source map: a misapplied tag and what it teaches A journalistic admission first. When this report reached me, its category label read sport. Inside, there is not one sentence of sport. Each of the 42 information points concerns pay, revenue, labour, security, schooling. Reading it in football language would mean abandoning one's own standards. A wrong tag is not a typo; it is a system failure — somewhere in the pipeline between ingestion and classification, there is a gap. The notebook does not lie, but what is absent from the notebook is often the real story. The real story here is this: for all the talk about income inequality between Mexican states, the bigger story is the near-stagnation of IMSS-registered formal employment. What is registered employment? Registration with the Mexican Social Security Institute, the standard proxy for formal work. If a job is counted there, it has a contract, leave, health protection, a pension calculation. Where it is not counted, work can exist and income can exist, but protection does not. That distinction is the spine of the whole report, and it is the thing almost every headline drops. The geography of income: three names Three names recur at the top of the pay table — Baja California Sur, Mexico City (CDMX) and Jalisco. Average incomes in all three sit clearly above the national average. All three draw the same causal picture: higher value-added production, tourism concentration, industrial clusters, long-run infrastructure investment. Baja California Sur's tourism and real-estate-based service economy has created a distinct pay tier. Mexico City's advantage is different — central administration, financial institutions, corporate headquarters, universities. Jalisco carries an older industrial-technological arsenal, particularly electronics and components. There is a contested point here that I raise deliberately. The income heights of these three lift Mexico's national average. But an average is a deceptive instrument. If three entities perform very well and nine are stagnant, the average can still look good. Where this report is honest, it does not hide the nuance — 26 states increased their higher-educated population, 30 improved schooling levels, but only five states increased formal employment. Five. Out of thirty-two. That figure weighs more in my notebook than the pay figure. 13.8 percent own revenue: the architecture of dependence Now the number usually buried at the end of a pay story. States' own revenues — what they raise themselves from taxes and fees — average just 13.8 percent of their total revenue. The rest is federal transfer. Dependence on money from the centre is roughly 86 percent. IMCO warns explicitly: this dependence on federal transfers limits the resources available to fund infrastructure, public services and skill formation. That is a policy-level statement, not a sporting one. Its consequences are no smaller for it. Imagine a club that receives 86 percent of its spending from central league distribution and only 14 percent from its own tickets, merchandise and sponsors. How much autonomy does it have over its own priorities? By the same logic, state revenue structure becomes a question of political autonomy. If you cannot raise your own money, you cannot set your own priorities; if you cannot set priorities, skill formation gets tied to someone else's tempo. One small but meaningful signal hides here. In IMCO's language, skill formation is framed as a fiscal function, not once as a market function. That phrasing matters. It means policymakers treat training and skills as a budget line rather than a private investment outcome. And the limit on that budget line is set by 13.8 percent. Education up, employment down Now the section where the report testifies against itself. On human capital, the picture is promising. Not six, but 26 states increased their higher-educated population. Thirty improved schooling levels. Attendance, completion, literacy — all trending up. But good process does not produce good outcomes. Beside those 26 and 30 sits another number: average registered employment growth fell from 0.4 percent to minus 0.9 percent. This is an input-improvement versus outcome-deterioration divergence, and it is the report's least discussed yet most cautionary data point. In football language, though there is no football here: it is like an academy producing excellent young players for five straight years while the senior team slides down the table. The academy report earns praise; the league table does not read it. Why does this divergence happen? Labour economics answers in three steps. First, raising educational attainment does not instantly create jobs at that level; you need demand-side absorption capacity. Second, if a state with rising education lacks industrial structure, educated youth leave — the skill flows out. Third, those who remain often enter informal work, without contract or health cover. In my reading, the third is the most dangerous and the least visible. 54.6 percent: the economy inside informality Mexico's informality rate stands steady at 54.6 percent. The word steady here does not mean calm; it means frozen. More than half the working population sits outside social security. The report identifies this not only as an indicator but as a problem of the laggard states. Why does this number matter so much? Because formality is not merely a statistic; it is a forecast of future revenue. Where 54.6 percent of workers sit outside the system, the tax base is narrow. A narrow base means less revenue. Less revenue means own revenues stuck at 13.8 percent. And stuck own revenue means continued dependence on federal transfers. Three numbers form a circle here: 54.6 percent informality, a narrow tax base, 13.8 percent own revenue, high dependence, limited investment capacity, no formal job creation, more informality. Unless the circle breaks, every new index edition returns the same picture in a different colour. In my experience such circles break only one way — not by lowering the cost of formality, but by raising the benefit of it. When a worker sees that registration means pension, health, creditworthiness and a school advantage for their children, registration becomes a meaningful decision. Paper mandates cannot do that. 27.4 and 92.9: the two security numbers Now the most awkward part of the report. Only 27.4 percent of people feel safe. Roughly three in four do not feel secure in their own area. In a competitiveness index, security functions as a differentiating constraint, because investment goes where risk can be calculated. Beside that 27.4 sits 92.9 percent — the so-called cifra negra, the dark figure. It means that more than 93 percent of crimes committed are either unreported or not investigated. Read together, the two numbers produce an uncomfortable truth: the official security statistics underestimate reality by a wide margin. That data-integrity gap is not only a security question but a governance question. A government that plans against seven percent of crime cannot prepare for a hundred. And investment decisions are made by the private sector, which relies more on its own risk perception than on official data. The dark figure is itself a competitiveness loss. Ranking volatility: why a state drops three places Ranking movement must be read separately. A sample: Baja California Sur down three to fifth; Chihuahua down seven to fifteenth; Sinaloa down seven to twenty-third; Tamaulipas up four to eleventh; the State of Mexico up four to nineteenth. A seven-place fall is dramatic. But the question is whether it reflects real decline or methodological reweighting. When index editions change, sub-indicator weights change, and weight changes alone can produce large jumps. Because I am looking at a single edition, that question cannot be settled from this material. A multi-year series is needed. Without it, ranking drama becomes a media story rather than economic evidence. One caution still holds: an index that moves this fast is difficult to use as a long-term policy signal. If it moves quickly, either reality is moving quickly or the index is sensitive — and in both cases you need the source before you act. The rise of economic complexity: three names The most promising part of the report. Quintana Roo, Nayarit and Campeche registered notable gains on the economic complexity index — roughly 12.7 to 26.9 points. Complexity means the diversity and sophistication of a region's productive and tradable activity. As complexity rises, the type of work changes — from simple labour to skilled labour, from raw materials to processed goods. These three names signal an emergence from the lower or middle tier. And IMCO itself states the path: promote higher value-added activity. That is the explicit policy lever, and the complexity gains are the first evidence of the prescribed medicine. A caution must be attached. The complexity gains of three states may be narrow and sector-specific, and they have not spread nationally. One edition cannot establish a trend. The possibility is medium; a sustained trend could be visible in two to five years. Still, one thing can be said with confidence: the index's greatest hope lies in these three names, and its greatest warning lies in the negative 0.9 percent. A three-tier geography Putting everything together, a three-tier competitive geography emerges inside Mexico — not a team, but a hierarchy of states. Top tier: Baja California Sur, Mexico City, Jalisco. At the bottom: Oaxaca thirty-first, Guerrero thirty-second, with Morelos twenty-ninth and Michoacán thirtieth just above. The middle tier is the most complex — where education is rising, complexity is rising, but formal jobs are not. In my reading, the middle tier is the real story. The bottom four suffer long-standing structural deprivation, where schooling, informality and security compound. But the middle tier is where a correct policy decision can genuinely make a difference. The top three will move on their own momentum; the bottom four will not rise without structural support; the middle twenty are the actual test. The direction of skill flow also matters. The top tier attracts both talent and capital; the bottom tier loses both. If trained workers are produced in Nayarit or Campeche and there is no work to keep them, that skill moves to Jalisco or Mexico City, and what remains locally is an investment deficit. That is why complexity gains must be directly paired with job creation, or the outcome stops halfway. The broken link in the transmission chain Professionally, the structural flaw in this report is visible in a transmission chain. The upstream stage is education and human capital: the direction is positive — 26 states improved higher education, 30 improved schooling. The midstream stage is the formal labour market and industry: the direction is negative — only five states grew registered employment, national average negative. The downstream stage is income, competitiveness and security: uneven and bifurcated. The chain works at the top, breaks in the middle, and delivers uneven results at the bottom. That is a structural transmission fault, and it is the fault that gets buried under the 'leaders are winning' headline. The football metaphor clarifies it, though the subject is not football: however good an academy is, if there is no door into the senior team, the academy is only producing players for rivals. Mexico's education gains are heading exactly there — skills are being produced, and a large share cannot find a place in the formal labour market. IMCO's proposal — advancing higher value-added activity — is in effect a repair proposal for the midstream stage. The question is simple: who performs the repair, and how far is it possible on 13.8 percent own revenue? Risk matrix Sorted together, the risks become clearer, and none of them is sporting. High risk: dependence on federal transfers, roughly 86 percent. Likelihood high, impact high. High risk: registered employment growth turned negative, from 0.4 to minus 0.9 percent. The single most alarming forward indicator. High risk: labour informality stuck at 54.6 percent. High risk: safety perception — only 27.4 percent feel safe, against a 92.9 percent dark figure. Medium risk: skilled-talent outflow from lower-income states. Medium risk: information insufficiency — a single snapshot with no multi-year series, weakening forward inference. Proportionally, the overall risk rating is high, because four major stressors operate simultaneously and reinforce each other. Stagnant jobs mean a narrow tax base; a narrow tax base means weak fiscal autonomy; weak fiscal autonomy means limited infrastructure and security investment; limited security means less investment still. The contrarian reading: why the 'leaders' story is not the real story Here is where conventional reading goes the wrong way. Media will naturally look at the top three — Baja California Sur, Mexico City, Jalisco. Pay statistics are easy, attractive, and true. But that reading misleads in three ways. First, the top three lift Mexico's average, and from that average one might think the whole country is doing well. In fact only five of thirty-two states increased formal employment. Second, the pay figure is a still image, not a motion. An average of 11,548 pesos describes a moment, not next year. And where employment momentum is negative, a still income picture can age quickly. Third, and most importantly, the pay table is a single-metric game. Competitiveness is not a single-metric game. States with higher pay concentrate public services; states with lower pay either have lower costs or greater instability. If income figures are not read alongside cost of living, security, schooling and infrastructure, the number becomes an object of praise rather than an instrument of understanding. And here the subtle human question arises. Between an informal worker sitting below Baja California Sur's average and a registered worker in Oaxaca, who is actually better off? The index does not answer. It only says where the average is higher. Administrative marginality: where the weakness sits Institutional capacity deserves separate reading. Two opposite signals sit side by side. On one hand, progress in human-capital inputs — broad gains in education and schooling. That signal suggests stability and low risk, because 26 to 30 entities do not advance together in one year without administrative capacity. On the other, weak fiscal self-sufficiency — 13.8 percent. That signal is high risk, because it says the cost of progress is being carried by someone else. Together the two signals produce an inference: states can spend on schools, but their capacity to convert that education into formal work is weak. This is not a lack of spending capacity but a lack of conversion capacity. And that distinction is rarely voiced in policy debate, because 'spend more' is an easy slogan and 'build conversion' is hard work. The report contains no personnel crisis, no resignation, no announcement. Leadership change cannot be derived from it. What can be derived is the structural question: where inputs rise fast and outputs stagnate or fall, the process will not change and incentives will not change. Forward signals In my writing practice I keep one habit: when a report is finished, I write four columns on the last page of the notebook — what to watch, where to watch it, what condition changes the signal, and what changes if it does. Column one: registered employment. Watch IMSS quarterly releases. Condition — if the negative trend turns positive, the current decline can be called temporary. Column two: informality rate. Watch the next IMCO edition. Condition — a clear break below 54.6 percent means structural improvement has begun. Column three: own revenue share. Watch state public-finance reports. Condition — sustained rise above 13.8 percent means movement toward fiscal autonomy. Column four: safety perception and the dark figure. Watch national victimisation surveys. Condition — rising above 27.4 percent means the policy evidence base is improving. Column five: the complexity index. Condition — if gains in Quintana Roo, Nayarit and Campeche persist, national spillover becomes possible. Final word: data is the metronome, but the eye still decides when the song begins The real value of this report is not in its headline. The headline says which states pay more; the interior says where that money comes from, how many work formally, and how many remain outside protection. A single number — 11,548 — travels easily. But 13.8, 54.6, 92.9 and minus 0.9 must be read together, or Mexico's state picture stays incomplete. In my professional life I learned that data is the metronome; it holds the time, but when the song begins is still a human decision. It is the same for Mexico's states. An index can point to where the weakness is, but which state decides to break that weakness, who finds the courage to lower the cost of formality, who writes the industrial strategy that converts education into jobs — none of that lives in an index. The biggest question, then, is not about pay. It is this: if education keeps rising and formal jobs keep failing to rise, where does that education go? The answer may be harsh — either it crosses a border, or it turns back inside the circle and disappears into the dark. That answer will be written in the next few years of IMSS releases, and to read it we need to keep a fresh notebook open.