Why salaries are so low in Mexico?

Question

I was researching the market and salaries are very low, and don't tell me it's cheap because it is not, rent takes a good percentage of your salary

Why salaries are so low there? Companies earn a lot of money !

The top salaries are hardly the minimun professional wages in the U.S.!

Answer 1

Rent  IS significantly cheaper than it is in the US, although in places favored by gringos its more expensive and also gringos sometimes get overcharged because they don't know prices and are assumed to be rich.

Part of it is probably the exchange rate- the dollar is just more in demand than the peso so you get a good deal when buying pesos.  Mexico is also a poorer country, there is more labor than money to go around compared to the US.  That's the basic problem- oversupply of labor. You can't get a job for $4 an hour if someone else is going to be willing to do it for $3/hr.

Answer 2

It's the same principle as supply and demand.  There are many people seeking work and few jobs.  If you opened a plant and said you had 50 jobs at three dollars an hour--a thousand people might show up.  If there were plenty of jobs and a scarcity of workers, you'd have to raise your wage to attract people.

In the past, it was common for Mexicans to have large families.  Large families equates to large numbers of job seekers.  Currently the desire for large families is declining.  So if the number of jobs available grows, but the number of job seekers stays constant, the average wage should go up over the next hundred years.

Answer 3

I think that "weechi" had some interesting insights.  As a frequent visitor to the boarder areas I was amazed at all the inequities in the economy in Mexico.  I could buy a loaf of freshly baked bread at the bakery for about 20 cents (USD) but I noticed that a Coleman ice chest which sold for about $24 in Phoenix was closer to $60 in a Mexican dry goods store in Puerto Penasco.

Mexico competes for US jobs by supplying cheap labor.  When a Motorola plant moved from Phoenix to Agua Prieta, Mexico the average pay for assembly workers went from $13  an hour to $3 an hour for Mexican workers.  I was shocked to see these lower paid workers streaming to stores in US boarder towns to buy clothing and household goods that they could not purchase in their own country.  I could not understand how they could afford US prices for those goods.  Naturally, the standard of living was much lower than what is common in the US and people had to get by on much less than American workers settle for.  

The major problem in Mexico is that there are no jobs.  It is not at all like America and the lack of economic opportunity is what forces many Mexicans to leave their own country.  If you spend any time in Mexico at all you will have the feeling that you have gone back to the days of The Great Depression.  Many people create their own jobs and are forced to work like slaves just to feed their families.  You get the impression that things may never improve because there is so little opportunity and the value of the individual is not the same South of the boarder.

One other inequity:  Mexico will encourage industries like oil refineries and chemical companies to move to Mexico and operate under far less restriction in regard to pollution.  The people are so desperate for work that they are forced to sacrifice the health of their families to get a job.

Answer 4

well, i've lived in mexico and i can tell you...yes, rent IS cheaper.  sorry, but it is. (could be if you are looking online, those people are advertising specifically to nonmexicans.  you have to go local...the paper, signs, etc.. for the "real" prices)  in addition, basic utilities are MUCH cheaper.  food and entertainment are also cheaper.  

now...are they cheap enough to offset the salary?  no, they aren't.  the bottom line is that mexico does not value labor in the same way.  for example...if i want an oil change in the US, the oil is 10 bucks, the labor is 20.  in mexico, the oil is 10 bucks, the labor is 5.  their theory is that any idiot could change the oil...so why pay?  

unfortunately, this also carries over to professional jobs.  employees are often micromanaged, watched over like hawks and treated like idiots.  people are basically trained to be non self sufficient because they are not valued in pay or trusted in their performance.  

when i lived there, i made out just fine with 17/hr, 25 hrs a week.  rent was 150, utilities were about 50 for water and gas, cable was 30.  movies were 4 bucks, dinner was 5, drinks were 1 to 3 USD.  in the beginning i made 9/hr and that was ok as well.  

the bummer is that most people can't get things on credit...but thats a blessing at the same time because interest rates are crazy.  basic model cars are also a lot cheaper.  i believe i paid 7,000 USD for a new car....but of course i brought that money from the US...there is no way i could have saved that amount on my mexican salary.

everyone employed legally receives health care.

Answer 5

The same is in Russia, China, India and Brasil. The growing economies, the famous BRIMC. They have an external developement, but not inside themselves where the development is a litle bit slow. They risk their population in favor to other economical issues, keeping low salaries with a lot of inflation.

Answer 6

I have askes this question a million of times and I can't come with a good idea yet, I'm still young and Don't know much about politics and finances.

one theory is that in Mexico the presidents and goverment personnel have stolen public money for decades consequently this brings inflation and people have to pay for it

also even though I'm sorry if i say this but plenty of mexicans are conformists they work and they spend their money in beer

It's not true that you can't make it in Mexico because I made it with no money at all, no acquaintances or anything.

it is a very hard question to respond but i will think a little harder and get a good answer.