Is it really cheaper to live in San Miguel?
Part V: The Endgame
By Jim Karger

In this five-part series, Karger looks at the commonly shared belief that it is less expensive to live in Mexico, specifically in San Miguel de Allende, than in most communities in the United States. It is an important inquiry because many expatriates leave the United States in part because they believe the cost of living in Mexico is materially less. In this fifth and final installment in the series, Karger summarizes his findings from earlier articles and makes some interesting and surprising conclusions.

What does reality look like shot through the tequila prism? To some it looks like a million Americans living in an idyllic land with perfect weather, served by loving and submissive locals who want nothing more than to pander the new owners who are living cheap while making millions flipping real estate during the time they are not using to reinvent their histories for various cocktail circuits or looking down on their fellow countrymen for being so stupid as to not join them in nirvana.

Perhaps this fantasy of Mexico and San Miguel de Allende lives on because it beats the facts hands down and avoiding reality is a lot easier if one is not bothered with those pesky statistics. Therein lies the weakness of proving anything in Mexico—there are almost no statistics and most of the ones bantered about were made up by someone with a grudge or an agenda, leaving only repetition of unnamed sources as poor substitutes for facts. Or perhaps it is not that complicated at all. Perhaps the mythology of San Miguel lives on because we hear what we want to hear, and see what we want to see, the facts be damned.

Like some of those north of the border who will never see Mexico because of the “drugs and terrible crime problems” about which they have heard relentlessly, but who have no facts to support their fears, those who idolize Mexico are no different, if only because they are willing to turn their heads. The fearful and the reverent alike substitute their beliefs for reality, victims of their own prejudgments, which reminds of Voltaire who once observed that “prejudices are what fools use for reason.”

Because there are no statistics upon which one can rely to compare cross-border costs of living, I have tackled the problem anecdotally in the last four columns and here is what I concluded from each:

Eating

If you’re looking to put on a few pounds, Mexico is the place to do it. Groceries in San Miguel at one of the large grocery chains were a full 25 percent less expensive than a comparable grocery store in the US and restaurants were even a better bargain, about 28 percent less expensive than comparable US eateries.

Housing

Unlike food, housing is no bargain in San Miguel. Indeed, I found little difference in the cost per square foot of construction, especially in high quality homes. And unless you live on Mission Bay or in Manhattan it is hard to find land more expensive than what you find in San Miguel, especially if you want to be a 10-minute flat walk or less to the Jardín. Until the real estate bust north of the border infected San Miguel about a year ago, it was a virtual orgy of paying whatever was asked for prime real estate with some trading at US$1,000 per square meter, or more.

Utilities

Electricity, measured by cost per kilowatt-hour is 100 to 200 percent more costly in San Miguel than the city I used for comparison. However, to be fair, because air conditioning is rare in San Miguel, for at least the summer months the average user in San Miguel will use less of this more expensive resource.

Water, including sewage treatment and sanitation, is also less expensive in San Miguel than in the US city used for comparison. However, if one considers the cost of water purification and/or bottled water alternatives and the fact that not all wastewater in San Miguel is treated before being released into the environment, the cost of water in San Miguel is more expensive than it may appear.

Gas

Few people in metropolitan areas of the US use liquid propane as almost everyone does in Mexico, but rather they use natural gas. And it is difficult to compare liquid propane to natural gas if only because the former is sold as a liquid by the liter and the latter as a gas by the cubic foot with each having a different BTU rating. If one compares “apples to apples,” however, propane is approximately 17 percent less expensive in San Miguel than in our comparison US city.

Telephone

If you make less than 100 local telephone calls per month and do not call cell phones, the cost of basic landline telephone service is slightly less expensive in San Miguel than in the comparison US city. If, however, you want features, or call cell phones, or make more than 100 calls a month, or make long distance calls from your Tel-Mex landline, Mexican telephone service is some of the most expensive in the world and will prove far more costly than in most US cities.

Internet

Internet service in San Miguel averages 100–400 percent more than the cost of comparable service in the comparative US city, using cost of megabytes down per second.

Services

The services compared in the fourth in this series of articles included various medical, transportation, and housekeeping services. What we found without exception is that services, whether it is a visit to the doctor, hospitalization, medical insurance, a maid, gardener, or a taxi ride, are all substantially less expensive in Mexico, including San Miguel. In short, no one is going to work for US$3 per hour north of the border. In Mexico, they will still line up for those jobs, good for those using the services but a sad statement on the state of education and technology that, along with many other reasons of history, relegates Mexico to third world status.

Technology/Electronics

As much less expensive as one finds services in Mexico, the opposite is true when buying anything that runs on electricity or batteries. We compared everything from washers and dryers to DVD players, cameras, flat screen TV’s and personal computers. Most items were 50–100 percent more expensive in Mexico than purchasing the identical item at Best Buy in any city in the US.

The Endgame

Like most mythology, the commonly heard refrain that “you can live in Mexico for a third less than you can live in the United States” has just enough truth in it to give it credence. The fact is it can be a third less expensive to live in Mexico, but it can also be a third less to live in the United States from one day to the next depending on the lifestyle to which one aspires. Anecdotal evidence leads me to believe that Mexico is less expensive if one measures their cost of living in consumables—food, services (of all types), and utilities, excepting telephone and Internet service, which is more costly in San Miguel. To the contrary, Mexico, and San Miguel in particular, are oftentimes more expensive than comparative US cities if one measures cost of living by capital purchases —land, housing, furniture, and electronics. Most people measure their cost of the living as a combination of both recurring expenses and capital purchases, which has a tendency to level the playing field. The cost of living in Mexico 
compares favorably with mid-west cities in the United States if one lives like the locals here. But, the more closely one wants to mirror the lifestyles of the wealthy worldwide, the less favorably Mexico compares. Painted with the broadest brush, Mexico is a comparatively cheap place to be poor and an expensive place to be rich.