How Mexico's Minimum Wage Impacts Immigrant Hopefuls

Bureaucracy can be fun!

In my previous article about tipping in Mexico, I made a passing reference to the idea that a rising minimum wage in Mexico is causing headaches for people in the U.S. and Canada, and I promised to write an article in the future explaining this. And while I hadn't planned on writing such an article for a while, I got enough questions about that statement that I figured I'd better do away with the mystery.

And while I will make reference to foreigners trying to get temporary or permanent residence in Mexico, this article is not a how-to guide for accomplishing those goals. There are enough of those types of guides floating around the internet, and they do a pretty good job of explaining the process. Far be it from me to be repetitive. Anyway, onward.

So, yes - there are many foreigners who love Mexico and who would like to live here full (or mostly full) time. Tourist visas - which is what visitors to Mexico come in on - are only good for staying in Mexico for up to 180 days. After that 180 days, visitors must leave, and then they can come back again in the future for another 180 days (sometimes the immigration agent at your port of entry will give you less than 180 days - 180 days isn't guaranteed, but it is the maximum period allowed for tourists). In order for potential immigrants to live in Mexico for longer periods of time legally, they need to apply for and have granted temporary residency. And after being a temporary resident for some period of time, immigrants can apply for permanent residency.

Show Them the Money

Mexico doesn't want a bunch of immigrants coming into their country who don't have the means to live here, so there are financial solvency requirements that Mexico imposes, and that temporary and permanent resident candidates must meet in order to gain those statuses. Historically, those financial solvency requirements had been tied to Mexico's minimum wage: Mexico had defined a minimum monthly income that was some multiple of Mexico's minimum wage that foreigners had to meet in order to qualify for residency. So, as minimum wages increased in Mexico, so too did that minimum monthly income that foreigners had to meet to qualify for resident status.

The Plot Thickens

Financial requirements for residency statuses were not the only financial qualifications that were tied to minimum wage: things like traffic fines and home loan rates were also tied to the minimum wage. Back in 2016, Mexico realized that tying so many financial requirements to the minimum wage was having an adverse impact on Mexicans: minimum wage was increasing every year (yay!), but so too were home loan rates, fines, and the amount of money Mr. and Mrs. Vancouver Island had to make each month in order to qualify for residency (boo!). So Mexico defined and began using a new metric for fines, residency, etc; this new metric is called the Unidad de Medida y Actualización (Unit of Measurement and Actualization), or UMA. Now, it would appear (and appearances can be deceiving), residency hopefuls don't have to worry so much about the yearly hikes in Mexico's minimum wage, they just have to hope that the UMA doesn't rise at the same rate. And fortunately, it doesn't; here is a graph showing the minimum wage (Salario Minimo, or SM) and the UMA from 2016 to 2017:

So Now Everyone is Happy, Right?

Wrong.

There is a hiccup in the system (there always is). You see, when Mexico introduced the UMA, someone forgot to send a memo to all of the Mexican consulates in the U.S. and Canada; these consulates still use the old accounting model wherein financial solvency is defined as a function of minimum wage. Most residency hopefuls start the residency process in their home countries, and the consulates in their home countries require a much higher proof of financial solvency than immigration offices within Mexico require. And unless you are applying for residency on the basis of marriage or some other family tie to a Mexican national, you must start the residency application in a foreign consulate. Ah, well, so much for untying your financial solvency from the minimum wage. Nice try.

But Wait, There's More

In order to truly keep things interesting, there is a bit of variance in the financial solvency figures quoted by the various Mexican consulates around the world. Residency hopefuls get to play a game of find-the-consulate-with-the-smallest-solvency-requirement. Ah, but some consulates will not even let you apply there unless your home address is within a geographic area serviced by the consulate. This is starting to look like a real headache, isn't it?

So, On Paper, What Are the Solvency Requirements

The monthly income requirement is defined as the UAM (in Mexico) or the SM (everywhere else) multiplied by 300 for temporary residency and 500 for permanent residency. So for 2023, the minimum monthly income for temporary resident qualification is 31,122 pesos in Mexico, or 62,232 pesos (double!) outside of Mexico. Mexico also allows one to use their savings balance instead of monthly income (helpful for retirees); for savings, the UAM/SM multiplier is 5,000 for temporary residency and 20,000 for permanent residency. So, to see if you qualify (on paper), simply use the appropriate multiplier with the SM value of 207.44 for 2023.

Disclaimer

There are other ways to become a resident of Mexico - there is a residency "grandfather" clause that some people may qualify for. There are family tie considerations, as I mentioned above. There are qualifications based on owning real estate whose value meets some threshold. Etcetera. If your ambition is to gain resident status, google around - there is a lot of information out there, and there are entire businesses whose objective is to help foreigners navigate the residency process.