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Why Mexico instead of USA?

A sample US company pays its direct labor operators $9.00 per hour in wage plus another $2.70 in benefits, totaling $11.70 for the fully fringed cost. This amounts to $24,336 for non overtime wages per year.

Juarez, Mexico seen from El Paso, TX

By comparison, fully fringed wages for Mexican direct labor employees can range from abut $2.50 to $6.50 per hour, depending upon skill level, performance bonuses, and the peso / dollar exchange rate. The high end of this scale is for highly-skilled operators such as certified machinists and can outweight wages for many indirect functions. The low end of the scale is most typical of operations which require on-the-job skills. At $2.50 per hour and 48 hours per week (the normal Mexican work week), a direct labor employee's fully fringed cost is $6,240, about 1/4th the US cost with a 20% increase in non overtime hours.

To arrive at the fully-loaded direct labor rate, add the proportional cost of indirect labor, supervision, the facility, utilities, supplies, Mexican administration (see mission and capabilities), insurance, profit, etc...everything ranges from about $4.50 to $10.00+ per hour, depending upon the amount of the above-stated costs. Feel free to contact us to receive a tailor-made appraisal of your operation's fully-loaded rate.

Source: Quality Manufacturing Services (QMS)- Mexican Contract Manufactruing & Subcontracting

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