Want to know the real value of the Peso?
Just ask Miguelito...

Photographs and Text by John Todd, Jr.

Introduction An interesting character in Veracruz is my barber, Miguelito.


Our Best Politicians and Economists
Someone said a long time ago, "It´s a shame our best politicians spend their lives driving taxis and cutting other people´s hair." Miguelito is one of these special people.

When I was transferred to Veracruz in March 1985, and while looking for a house, I lived at the Hotel Colonial, on the main plaza in Veracruz. And after a couple of weeks, I needed a haircut.

Behind the hotel on a back street was a sign, "Peluquería, Figaro´s". With a name like that I thought I´d give it a try.

I was no longer in sales where appearance is important, and figured a local barber couldn´t make too much of a mess. After all, in a steel mill, people don´t care too much about haircuts. It would probably be cheap, too.

I noticed he also sold Cokes and offered long distance phone calls for the convenience of his customers.

Air Conditioning A Luxury
In those days, air conditioning was considered a luxury, and Figaro´s was no different from most of the other barbershops in town. It was going to be a hot sweaty experience with only a ceiling fan recirculating the warm tropical air of the port of Veracruz.

Welcome, My Friend!
There were a few customers waiting and Miguelito warmly welcomed me into his establishment as if it were a palace, with the greeting in English, "Welcome, my friend! One moment, please, Sir", and motioned for me to sit in one of the plastic form chairs up against the narrow wall.

My turn came quickly, and Miguel began using his entire English vocabulary to make me feel at ease. My Spanish was pretty good at the time, so we continued on in Spanish. He said he had learned English cutting hair in Arizona when he was younger.

When the final razor trim around the back of the neck and ears was finished, I halfway expected some cheap lotion to be applied. But, somehow it smelled just like "aguardiente", or rubbing alcohol.


One dollar, please, Señor
I got up to pay, and Miguelito said, "One dollar, please, Señor."

The peso was at 260 per dollar, and people were hoarding dollars against the periodic devaluations. He accepted the $260 pesos.

Over the next couple of months I revisited Miguelito for periodic haircuts, and discussions of Mexican and US politics, the economy, etc.

Although the peso continued to fall, 300, 500, 1000, 1500, 1800 pesos, and local prices in Veracruz spiraled upwards in pesos, too.

In dollar terms things were still cheap. For example, the cost in dollars of the entire Sunday breakfast buffet at the swanky Hotel Mocambo was $1.50 in pesos.

And, Miguelito continued to charge "One dollar, please, Señor.".

A Sudden Change
When the peso got to 1,800, and the price changed. It was no longer, "One dollar, Señor", but "2,200 pesos, Señor".

"But, Miguelito, what happened to the "One dollar, Señor?"

He shook his head, and said he was sorry, but that was the new price. That was still OK. It was still cheaper than a haircut back home in Harrison, Arkansas which was $5 dollars, or at Super Cuts in Houston it was $8.

Prices Get Too High
Time went on and peso prices continued to rise against the dollar in Veracruz. Miguelito was also complaining as the peso continued to drop. By 1994, one dollar was worth thousands of pesos making the dollar equivalent of a haircut $5.70 which was more than it cost in Arkansas!


Even when air conditioning replaced the ceiling fans, the prices weren´t worth it. The lines of people at Miguelito´s shop dwindled, too.

The Peso is Devalued
And in December of 1994, the devaluation came, and caused a lot of problems. Now the dollar equivalent of a haircut went back to around a dollar. Since then it has inched back up in dollar terms.

In the process I discovered, that while I am not an economist, a simple common denominator for foreign currency values which has nothing to do with minimum wages, but the dollar equivalent of the cost of a haircut in most countries will give you an idea of what the real value should be in dollars.

Back to Normal
The other day when I went to get a haircut at Miguelito´s, the cost of his haircut was $36 pesos. At the foreign exchange house across the street, the dollar was at 11.45 pesos per dollar. Once again, Miguelito had people waiting in the chairs for a haircut.

Therefore, does this mean that the real value of the dollar in 1985 terms should be 33 pesos to the dollar? If the dollar were at 36 pesos, the buffet at the Hotel Mocambo would once again cost $1.50 in dollars.

I don´t know, but it´s something to think about.

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