buying power

A Spanish expression for “play money,” like the kind used in Monopoly, “dinero de mentira” translates to something like “lie-money,” which is a good way of describing what it’s like to use pesos converted from US dollars.

Even though Guanajuato is a tourist city and the capital of the state, prices here are much lower than I am used to. (And I’m from rural Wisconsin, so the cost-of-living there is lower than many places in the U.S.)

To give you a quick idea of the prices here:

  • Cappuccino = $30 pesos = $1.50 USD
  • Dinner = $50 – $100 = $2.50 – $5.25 USD
  • Taxi ride = $50 pesos = $2.50 USD
  • Cell phone with unlimited text/calling to U.S./Mexico/ Canada = $100 pesos/month = $6/month

You can see how prices like these could make spending money actually fun. But the danger of this discrepancy in buying power finally hit me the other day, when I left a 30 percent tip on my bill at the coffee shop. My $10 peso tip works out to about 50 cents, but I left feeling like a goddamn saint. How quickly [buying] power corrupts!

I’m not the first foreigner, or the last, to develop a wonky moral compass from a sudden change in currency. A student from my drawing class had a problem with one of her housemates, a young woman from France who got in a dispute with the landlady over the rent. La francesa said that she would only pay 75 percent of the rent for the first month because she moved in during the second week. That argument that would pretty bad even if the rent were steep, but the rent for the month was $2000 pesos. La francesa was so concerned about losing the equivalent of $25 USD that she sacrificed what had otherwise been a genial relationship with her landlady and her roommates. She’s moving out at the end of the month.

Even though the exchange rate is just another reason study abroad in Mexico beats Spain or basically anywhere else in the “developed” world, where the US dollar would be worth about the same or less, you have to think about what this all means. From a world perspective, I’m well-off. I have access to good healthcare, education, transportation, and food/clothing/shelter, plus some disposable income to spare – but in the U.S., I wouldn’t call myself rich. As an example, my ability here to accept my peers’ invitations to go out, to travel, to do all the tourist-y things would be pretty different if we were at home, where I would be considering whether I should save my money.

I am comparatively wealthy here because my money comes from a different economic system. I worked this summer for minimum wage and the money I earned is more than enough for me to do tons of fun stuff all semester, so I’m lucky to be studying in a country where the U.S. minimum wage is an actual living wage. (Really! Such a place exists! I found it! It’s just… not anywhere in the fifty states. ) However, had I worked this summer for the Mexican minimum wage, prices here would be a lot more real. Mexico’s minimum wage is $73.04 pesos, or about $4.00 USD – but that’s per day, not per hour. And that fact sure puts a $2.50 taxi ride into perspective.

Spending has a different meaning for me here, where my funds stretch farther. I don’t have to think as carefully about what I need/want. I can buy things for convenience or simply on a whim. I can spend without any of the usual crushing disappointment that comes with handing over my crumpled bills instead of hoarding for a rainy day.

Everything seems like a good deal here – but of course it does when you’re playing with dinero de mentira. I still have little sense of how Mexicans value the peso and how they interpret prices, but obviously the Mexican economy is no Monopoly board to them. It’s only for the foreigner that everything comes at a great price.

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