A recent report by International Living magazine named Mexico as the 2007 top global retirement destination. (click here to read more) One of the factors used in analyzing 29 countries for top honors is the cost of living in that country. If you consider the value of the peso compared to the U.S. dollar, what would it really cost you to shop for similar items in both countries? Another related question is how do wages compare between the U.S. and Mexico?
The United Electrical, Radio & Machine Workers of America (UE) created an interactive web site to explore wages and cost of living comparisons between the U.S. and Mexico. The site compares wages for similar jobs in the U.S. and Mexico like bank teller, teacher, store clerk and others.
The cost of living prices used in the UE International Solidarity site comparisons are 2004/2005 currencies, but it is an interesting activity to complete if you are considering migrating to Mexico for retirement or employment. You can compare how long it would take to work for certain items in both countries. Here are some samples of what the UE found:
Comparing Cost of Living for Food in U.S. and Mexico (all prices are U.S. dollars)
Half gallon of milk: U.S. = $1.61, Mexico = $1.35
One pound of butter: U.S. = $3.39, Mexico = $1.79
Package of Tortillas: U.S. = $1.79, Mexico = $.59
6-pack of Corona: U.S. = $12.00, Mexico = $4.30
One pound of cheddar cheese: U.S. = $4.99, Mexico = $2.24
One pound of baking potatoes: U.S. = $.99, Mexico = $.47
One bottle of cooking oil: U.S. = $3.49, Mexico = $1.48
One head of lettuce: U.S. = $1.49, Mexico = $.44
One pound of apples: U.S. = $1.05, Mexico = $.81
One pound of bananas: U.S. = $.50, Mexico = $.28
Whole chicken per pound: U.S. = $.99, Mexico = $.81
Can of tuna: U.S. = $1.69, Mexico = $.56
Dozen eggs: U.S. = $1.06, Mexico = $1.08
Nescafe coffee, 7 ounces: U.S. = $6.95, Mexico = $3.41
How Long Would You Have to Work to Buy These Food Items?
On average a teacher in the U.S. makes $27.01 per hour, in Mexico $6.75 an hour.
A teacher in the U.S. would work 1 hour 33 minutes to buy these food items.
A teacher in Mexico would work 2 hours 55 minutes to buy these food items.
Comparing Cost of Living for Necessities in U.S. and Mexico
Quart of 20w50 Quaker State Oil: U.S. = $1.48, Mexico = $2.49
Bottle of shampoo: U.S. = $5.49, Mexico = $1.93
1 roll of Charmin Toilet Paper, 133′: U.S. = $.89, Mexico = $2.31
Bottle of 100 aspirin: U.S. = $6.00, Mexico = $1.44
Bar of soap: U.S. = $1.00, Mexico = $.54
A U.S. teacher would work 33 minutes to buy these necessities.
A teacher in Mexico would work 1 hour 21 minutes to buy these necessities.
Comparing Cost of Living for Home Furnishings and Electronics in U.S. and Mexico
Dell computer, no frills: U.S. = $875.00, Mexico = $1019.00
Month’s rent for 3/1 in working class neighborhood: U.S. = $654.00, Mexico = $125.00
Washing machine: U.S. = $360.00, Mexico = $557.00
Refrigerator: U.S. = $399.00, Mexico = $501.00
Stove w/4 burners and oven: U.S. = $449.00, Mexico = $603.00
Panasonic 20 inch television: U.S. = $160.00, Mexico = $222.00
Sony CD player with AM/FM radio: U.S. = $60.00, Mexico = $89.00
A U.S. teacher would work just over 2 weeks to pay for these home items and rent.
A teacher in Mexico would work more than 11 weeks to pay for these home items and rent.
Comparing Cost of Living for Clothes and Entertainment in U.S. and Mexico
Pair of Sandals: U.S. = $10.00, Mexico = $9.00
3 pair socks: U.S. = $3.99, Mexico = $2.69
Pair of Old Navy jeans: U.S. = $25.00, Mexico = $20.00
Short sleeved man’s shirt: U.S. = $12.99, Mexico = $14.35
Kid’s Air Nike shoes: U.S. = $39.99, Mexico = $17.85
Ticket to a movie: U.S. = $8.50, Mexico = $3.40
Lunch at fast food place: U.S. = $4.48, Mexico = $4.57
A U.S. teacher would work 3 hours 53 minutes to buy these clothes and entertainment.
A teacher in Mexico would work 10 hours 40 minutes to buy these same items.
Fringe Benefits for Working in Mexico
According to Don D. Nelson, Attorney at Law, Certified Public Accountant, and licensed to practice in California, there are some fringe benefits that employers in Mexico are required to give all employees:
Profit sharing equal to 10% of the employer’s pre-tax earnings
A Christmas bonus equal to 15 days of pay
A vacation bonus equal to 25% of normal pay during the vacation period
A contribution of 7% to employees retirement fund
The yearly income tax rate in Mexico is from 3% to 32% with adjustments for inflation.
