Tijuana is one of the most expensive cities in Mexico when it comes to the cost of living. We constantly see it in the news! Economic articles about inflation that say things like this:

In May 2024, inflation in Tijuana increased by 0.5%, ranking #5 as one of the 55 cities analyzed by INEGI with the highest inflation. The annual rate was 5.04%, which exceeds the national average of 4.69%.

Inflation in Tijuana has been one of the highest since 2016 and it is mainly due to offer clashes in the border binational relation, i.e., jobs at the border, remittances, and bottlenecks in the supply chain.

How does the cost of living in Tijuana compare with the national average?

According to numbeo.com, while in the national Mexican average, a simple restaurant meal costs $180 pesos, in Tijuana it costs $235 pesos (31% more); a national beer costs on average $45 pesos, in Tijuana it costs $60 pesos (+33% ); a regular cappuccino costs $58 pesos vs. $75 (+29%), a dozen eggs cost $43.51 vs $52.43 (+21%); a free-range cab fee (1km) costs $31 pesos vs. $50 pesos (+61%); a monthly gym payment costs $653 vs. $705 pesos (+8%); a monthly rent payment for a 1-bedroom apartment downtown costs $11,964 vs. $12,787 pesos (+7%), and a 3-bedroom apartment costs $22,737 vs. $25,366 pesos (11.6%), and this list could go on and on.

The average salary in Mexico is $13,307 pesos, while in Tijuana it is $16,808 pesos, a 26% above the national average. Despite wage increases in the border region, Tijuana natives are suffering financial stress according to the 2023 Financial Health Survey by INEGI and Hacienda.

Why is the cost of living so high in Tijuana compared to most Mexican cities?

The answer is its geographical location. Tijuana is part of the Tijuana-San Diego megalopolis and the San Diego Metropolitan Area is one of the most expensive in the United States. This means that, in between Tijuana and San Diego, the former functions as a satellite city or commuter city. It is estimated that between 140,000 and 150,000 people cross daily, though these numbers can vary depending on source and methodology used and may take into account studying, shopping, and visiting family and friends. No other Mexican city in the Mexican northern border has such an economic powerhouse like San Diego as a neighbor.

A high number of people live in Tijuana in order to reduce costs, as their salaries pretty much make it impossible for them to live in San Diego. By living in Tijuana, they demand a greater amount of goods and services, and as such, prices increase. These are some of the most important numbers to know when comparing both cities:

• The cost of living in Tijuana is 48% cheaper than in San Diego, without considering rent.

• If you consider rent, Tijuana is almost 60% cheaper than San Diego.

• Rent itself is only 75% cheaper on average in Tijuana than in San Diego .

• Eating in restaurants is 42% cheaper in Tijuana.

• Groceries are 49% cheaper in Tijuana than in San Diego.

It is estimated that one needs $3,197 dollars (approximately $58,500 pesos) of monthly income in Tijuana in order to equal living with $7,900 dollars (approximately $142,930 pesos) of monthly income in San Diego. Remember that the average salary in Tijuana is $16,805 or $920 dollars. In San Diego, an average monthly net salary is $5,933 dollars (approximately $108,538 pesos). This means that a worker earns 6.5 times more in San Diego than a worker in Tijuana.

For a portion of the economically active population of San Diego that lives below the monthly wage average, living in Tijuana is very attractive in order to make the most out of their income. By spending their income in Tijuana, prices go up, which causes losses to the purchasing power of Tijuana natives who work on this side of the border.

In conclusion, relatively lower costs in Tijuana help to alleviate the pressure off San Diego's workforce. A part of its working class, mainly Mexican American, exchanges their purchasing power for hours wasted on long waiting lines entering and leaving the United States, and Tijuana natives experience higher costs of living. Of course, not everything is bad, but I will write about this in a future article.

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