The Microeconomics of a Mexican Immigrant in Oklahoma

Originally written March 13th, 2011. 

San_Jose_May_Day_01

One afternoon after work I was hanging out with my new friends, Javier and his “cousins,” at their south side Oklahoma City apartment.  By that time I suspected that most, if not all, of the guys were unauthorized immigrants.  All sent money back home to family.

I was intensely curious about the economics of the situation. How could it be worth it for a person to risk life and limb in order to immigrate to the United States without papers?  Could the financial payoff really be so significant in order compel these young men to take these kinds of risks?

El Flaco is a skinny little guy that looks, upon first glance to be a mere 16 years old, despite being in his early 20s. He had the gentle comportment of a kid that endured his fair share of teasing due to his slight build.  He wasn’t beat down, but he was devoid of aggression. He was a laid back kid that went with the flow.

Maybe it was his gentle demeanor that caused me to choose him to alleviate my curiosity.  At an opportune moment I leaned over to him and asked him how much more he earned in the US at his construction job than he earned in Mexico before he immigrated.

An immigrant can earn ten times more money in the United States than in Mexico.

His answer: ten times.

I was incredulous. This kid was probably making nine or ten bucks per hour, at the most,  on a construction site.  I let the subject drop for the moment.

The next day at work I did a little internet research:

In the majority of Mexico the legal minimum wage is 54.47 pesos per day.  At current rates that is about $4.57 in US dollars.  That is four-and-a-half-dollars per DAY!

Minimum Wage in Mexico is less than five dollars per day.

Mexico
6 days of labor x $4.57 per day = $27.42 per week

USA
40 hours of labor x $7.25 (minimum wage in Oklahoma) per hour = $290 per week

My skinny immigrant friend was telling the truth.  He makes ten times more making minimum wage in Oklahoma than he made in Mexico. Additionally, in theory, he works one less day in order to earn that money.

Taking this exercise even further let’s look at how much he can send home to support the family.

My skinny friend lives in a modest two bedroom apartment with three other guys. Rent payment on their two bedroom apartment on the south side of Oklahoma City is about $500 with water included. The electric bill is about $100 per month. No home phone. No cable.  So his share of the apartment and utilities is $150.  Add $50 per month for cell phone service.  He eats almost all of his meals at the apartment with the other guys. Let’s generously estimate $300 for food. We can count another $50 or so for his contribution to gas and upkeep on Javier’s car to get him to work. Let’s allow $120 per month for various expenses like clothes and beer.

Monthly expenses total to $670.

Using his income numbers from above, he grosses $290 per week. Multiply that by 4.3 weeks in a month and we get to a monthly gross income of $1,247.  After deductions (despite common belief,  the majority of employed unauthorized immigrants pay taxes) he probably brings home  $1,010 per month.

After his monthly expenses of $670 he has $340 per month to send back home.

He sends home to his family three times his previous income.

Any immigration reform measure that doesn’t take into consideration this powerful economic situation is doomed to fail.

About the Author

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Jake Fisher

Jake Fisher is partner at Bridges Strategies. He specializes in inbound marketing, B2B sales and multicultural communication. He enjoys good food and bad golf. You can follow him on Twitter at @jakefisher

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