A tale of two manufacturing hubs: Tijuana vs. Mazatlán
Introduction
When talking about manufacturing, especially offshore or nearshore, Mexico will surely come up in the discussion because this country stands out as one of the major players in the manufacturing field, attracting investors from various industries for decades already. The country’s strategic location is pivotal in this, as the country is located between two continents and two oceans which gives it a unique ability and potential to reach various different markets easily and most importantly, at a low cost.
With Mexico boasting a population of nearly 130 million people, which ranks it 10th in the world, there is an abundance of labor, which is skilled in manufacturing, but significantly cheaper than in the “Western” countries, and when you add all that to the fact that Mexico has laws and regulations that are favorable and encourage foreign investment, it’s no wonder the country is a giant of manufacturing.
Mexico is a large country, and as such, it boasts multiple developed manufacturing zones, but in this article we will focus on two that have emerged as top manufacturing hubs.
Both Tijuana and Mazatlan are attractive to investors, but these two cities differ in many ways. In this article we will try to explain these differences with a special focus on labor availability in Tijuana vs. Mazatlán.
Location
Tijuana is located in the northeast of Mexico, near the border with the United States, or more specifically the state of California, and the city of San Diego. This enables any business in Tijuana easy access to the North American market, which made it a primary location for trade with the United States. The importance of a well-developed transportation network that has been specifically developed to support the development of manufacturing and trade can’t be overstated and is a great asset for Tijuana which keeps drawing investors.
Mazatlan, on the other hand, is located further South from the border with the United States, but its location on the Pacific Ocean gives it access to the North American, as well as Central, and South American markets. The city has long been a fishing and tourism hub but has in recent years firmly established its position as one of Mexico’s major manufacturing zones that attracts investments in fields as diverse as aerospace and textiles.
Labor availability in Tijuana vs. Mazatlán
Tijuana is blessed with access to a large labor force. The city itself has a population of over one million people, but the labor force of a much larger area gravitates towards the city because of its manufacturing tradition, as Tijuana has been a major manufacturing center for decades and its reputation draws workers from various regions.
Mazatlan is a smaller city, so it faces certain challenges regarding labor availability compared to Tijuana. The city has a population of about half the size of Tijuana’s, and less of an industrial tradition, as it has only recently diversified its economy from fishing and tourism to manufacturing. Initiatives have been put in place to offer vocational training and increase the city’s appeal, and results are already showing.
One of the benefits of a smaller workforce is a lower employee turnover with employees in Mazatlan staying in their jobs for much longer on average than their peers in Tijuana, which is known to have a problem with a high employee turnover.
Wages
When it comes to investments, the bottom line is often the most important, so wage considerations play a great role in choosing the right location for investment.
In Tijuana, wages are on average higher than in the rest of the country, because of its proximity to the United States, and of course the demand for skilled labor in the area.
Wages for unskilled labor in Tijuana range from about $4.50 to about $5.30 an hour, which is significantly higher than for unskilled labor in the rest of the country.
Because of regional economic dynamics that we’ve already touched on, wages in Mazatlan are significantly lower than in Tijuana. It has a smaller workforce and fewer manufacturers, which results in less competition and a lower employee turnover. Although average wages in Mazatlan range from about $2.50 to $3.50 an hour the costs of living in the area are also significantly cheaper than in Tijuana, which still leaves workers satisfied at the end of each month.
Conclusion
Mexico is undoubtedly a big player in the manufacturing field, and this will not change any time soon. Its well-developed manufacturing zones offer plentiful advantages for investors who decide to make the leap into offshoring or nearshoring.
TIjuana and Mazatlan are two very different manufacturing zones, but both have their distinct advantages that make them unique and, most importantly, popular for investment.
It’s important to do research on both in order to choose the one that fits the best, because whatever your manufacturing needs may be; Mexico’s got you covered!
