Politics, Business & Culture in the Americas

Can anyone live on minimum wage in Mexico?

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In a quaint coffee shop in the heart of La Condesa  (one of Mexico City’s trendiest neighborhoods), Ana and Ricardo sit down and take a break from their jobs. One of them orders a shot of espresso, the other a soft drink and a muffin. Their bill exceeds 120 pesos ($9.10), excluding tip. After a while, they get up, pay and happily go on their way. 

One block from the café another Mexican, Silvia, mops the floor of a local supermarket and earns minimum wage. A single mother of two she has to make ends meet with 345 pesos ($26.20) a week working six days.

Her story is not an exception.  It is a reality shared by 12 percent of this country’s economically active population.  Another nine percent of our workers earn the sum of two minimum wages, 115 pesos ($8.74) daily.  This creates problems and challenges far greater than what these figures reflect.

In the U.S., the minimum wage is set at $7.25 per hour. At 13 pesos to the dollar and an 8-hour workday, this means that a minimum wage employee in the US earns 13 times as much as one in Mexico. Does this tell you a little bit about the risks migrants are willing to face in order to illegally cross the border?

Politicians in Mexico love to relate purchasing power to the price of the tortilla. At current rates, one minimum wage is the equivalent of 6 kilos of tortilla per day. This sounds like a lot (this is why they love to use this figure). I guess politicians expect us to live off of tortillas (and people wonder why our country has one of the worst obesity problems in the world). Unfortunately, though tortillas are cheap, nothing else on the shelf is. If Silvia pays a really low rent, she will blow the rest of her income when she goes to the  supermarket once a week and buys a box of cereal, a carton of milk, a couple of cans of food and a 2 liter bottle of her soft drink of choice. Not nearly enough to feed a family, let alone provide a balanced diet… Wait, don’t forget your tortillas!

The problem does not stop with migration or obesity.   On average, a corner drug pusher in Mexico earns 8,000 pesos ($608) a month. That’s almost six times as much as Silvia. Oh yeah, he doesn’t pay taxes either and works about half of the hours.  He also gets to carry a gun and earn the respect (or fear) of his peers. Schoolchildren in his neighborhood look up to him in ways that will never compare to a person whose work tools are a mop and a bucket.

Now, we tend to think that what will break the poverty cycle is access to higher quality education. Well, let’s look at the costs and aim for the highest quality we can find in the country. In Mexico that would be Tecnológico de Monterrey. At a university level, this institution currently hosts almost 50,000 students nationwide (on more than 30 campuses).  Tuition costs average 72,000 pesos ($5,470) per semester.  If Silvia wanted to put one her kids through this university, she would have to find a way to fully evade taxes and for her and her children to survive without food or shelter. She would also have to work 70 hours a day. 

Following a correct path, if he’s lucky Silvia’s son will have access to a low quality public high school. If he’s really lucky, he will graduate from a public university and maybe start earning  5,000 pesos ($380) per month. Selling marijuana to rich kids is a likelier (and more profitable) career path for him.  Maybe he will turn to stealing, kidnapping or extortion. And can you really blame him for resenting Ana, who nearly spent his mom’s daily income on a muffin?

Without a doubt, high quality education is the key to open many doors. The good news is that Tecnológico de Monterrey and other private institutions are exploring ways to make education more accessible. The bad news is they are not doing it nearly fast or creatively enough.

In the meantime, a revision of this critical figure and the way it is calculated is long overdue. We can no longer determine minimum wage levels based solely on the price of basic goods without taking into account the context we live in and the society we are trying to build. There is a lot more at stake stemming from this than a package of hot tortillas.




Arjan Shahani is a contributing blogger to AQ Online. He lives in Monterrey, Mexico, and is an MBA graduate from Thunderbird University and Tecnológico de Monterrey and a member of the International Advisory Board of Global Majority—an international non-profit organization dedicated to the promotion of non-violent conflict resolution.

Tags: Mexico, Tecnológico de Monterrey
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