According to ILO (2014), Mexico has higher levels of informality than the average rate of other countries in Latin America. The real paradox is that in this country informality has been useful as a mean to scape unemployment and poverty, but it also the cause of several economic and social problems.

Some of these problems are the following:

• Low productivity is promoted: informal companies are not subject to credit, which disables them from increasing their capital per worker.
• Noncompliance of labour rights: these companies are not obliged to pay the minimum wage nor do they have to provide the working conditions established by the law for their employees.
• Reduction of tax income and unbalance of public finances: the tax burden is focused on the reduced number of companies and employees who work within formality.
• Difficulties to benefit from the new Trans-Pacific Partnership (TPP): informal companies cannot export or import goods, register patents, hire high level human capital or invest in training their employees.

Even though the Mexican State has been working to reduce informality, the efforts made are isolated. In other words, this is not a key issue in the country’s public agenda. Federal and local programs are not standardised and this produces poor results.

A national formalization policy focused on efficiency would be able to consolidate the scattered programs there are nowadays. It would include goals and strategies aimed at promoting formality in the long term and measuring the performance of the policy in the short, medium and long term to make adjustments when necessary. Moreover, this transition strategy towards formality could also add original programs that fit new realities and problems, such as informality and migration or informality and NEETs.

If we analyse the situation of other countries within the region, we can see that interventions have been made to attend the needs of SME, to promote the compliance of tax and labour laws, and to extend social protection over a larger number of citizens.

Latin America has several cases in which the reduction of informality has been a success. An emblematic case has been Chile, where a program to replace fines for training for employers became an innovative program that has been able to reduce the odds of reoccurrence of illegal practices.

In other regions of the world, the articulation of public and private employment services have led to major advances.

It is crystal clear that tackling informality must be a key issue in the public agenda to enable an increase of opportunities and to generate higher levels of social and economic progress.