There were 4,170 households out of which 41.1% had children under the age of 18 living with them, 54.7% were married couples living together, 21.4% had a female householder with no husband present, and 19.7% were non-families. 18.0% of all households were made up of individuals and 11.4% had someone living alone who was 65 years of age or older. The average household size was 3.27 and the average family size was 3.75.
In the city the population was spread out with 32.9% under the age of 18, 11.5% from 18 to 24, 22.8% from 25 to 44, 18.4% from 45 to 64, and 14.4% who were 65 years of age or older. The median age was 29 years. For every 100 females there were 88.6 males. For every 100 females age 18 and over, there were 82.3 males.
The median income for a household in the city was $23,064, and the median income for a family was $25,339. Males had a median income of $19,945 versus $18,387 for females. The per capita income for the city was $8,658. About 30.4% of families and 36.4% of the population were below the poverty line, including 49.4% of those under age 18 and 30.3% of those age 65 or over. The Rio Grande Valley Premium Outlets owned by Chelsea Property Group which is a brand of Simon Property Group opened in November 2006. Though Mercedes is a small and poor town, with more than a third of its population beneath the poverty line, the location was attractive for two main reasons. (1) The city is roughly the geographical center of the Rio Grande Valley urban agglomeration and is located on U.S. Highway 83, which connects the major urban centers of Brownsville, McAllen and Harlingen. (2) The city is located near a major U.S.–Mexican border crossing making it accessible to the growing middle class population of Nuevo León and Tamaulipas. Mercedes is divided between two school districts.
Eastern Mercedes is in the Mercedes Independent School District. Western Mercedes is in the Weslaco Independent School District.
In addition, South Texas Independent School District serves magnet students in many Rio Grande Valley communities, including Mercedes.
The Science Academy of South Texas and South Texas High School for Health Professions, schools of STISD, are in Mercedes.