North America has never been as economically intertwined as it is today. Over the last three decades, the U.S., Mexico, and Canada have grown closer through trade, investment, and shared supply chains. Yet from the beginning, one issue has stood out as both a promise and a challenge: the significant difference in wages and household income between Mexico and its northern partners.

Today, the contrast remains stark. Household income in Mexico hovers around $12,000 USD, compared to $65,000 in Canada and $70,000 in the United States. The disparity is mirrored in wages. Canada’s minimum hourly rate is $16.55 CAD, roughly $12 USD. In the U.S., the federal minimum wage stands at $7.25 USD, though in California it reaches $15.50 USD. Meanwhile in Mexico, the national minimum wage per hour is $34.88 MXP, or just $1.88 USD; even in the Northern Border Region, where salaries are higher, it amounts to $52.50 MXP, or $2.83 USD.

These differences help explain the income gap, but they are not the whole story. Mexico’s formal economy still accounts for less than half of total employment, and wages must consistently outpace inflation to produce real improvements in living standards. The U.S., for instance, has experienced modest real wage growth since 2015/2016, progress that Mexico must replicate, especially in its low-wage sectors.

The challenge is clear. But so is the opportunity. If North America is serious about strengthening its economic ties, then reducing the wage gap must be part of the agenda. The question is how.

First, productivity improvement across all three countries is essential. By adopting technology that boosts output per hour, workers can generate more value, attract capital investment, and justify higher wages. Second, enhanced labor standards, particularly the Labor Value Content provisions of USMCA that require $16 USD per hour in certain sectors, must be enforced and expanded to ensure real wage growth. Third, stronger rule of law, transparent institutions, and a stable macroeconomic environment will lead to investment based on transparent legal system that protects property rights, provides business confidence and has pro-business policies.  Finally, education and workforce development, from early childhood to vocational training and reskilling, are critical to ensure citizens across the region can keep pace with economic and technological shifts.

For the U.S., Canada, and Mexico to grow their economies and close the wage gap, workers need the skills and tools to do better jobs. Businesses need steady rules and supportive infrastructure such as roads, internet, and trade facilitation that allow them to expand. Fair pay and worker protections are key to keeping employees safe, motivated, and engaged. When all three countries work together and share these benefits, the economy grows, and wages rise for everyone. That’s the real opportunity.