Remittances to Mexico are slowing down

According to the news.

This year a smaller percentage of Mexican immigrants in the United States sent money back to their homeland than in 2006, according to a report released yesterday by the Inter-American Development Bank. The bank said the reduction had left at least two million people in Mexico without the same financial help they had once received.

Bank officials, pointing to a survey of Mexican immigrants in the report, said the decline reflected a rising sense of insecurity and uncertainty about whether they would stay in the United States. Anticipating a possible move back to Mexico, these immigrants appear to be saving more.

Over all, the percentage of Mexicans who regularly sent money home fell to 64 percent in the first half of this year, compared with 71 percent for all of last year, according to the report. The sharpest decline in such transactions — known as remittances — came among Mexicans living in states where they have settled in large numbers only recently, like Georgia, North Carolina and Pennsylvania. In those states, the percentage of Mexicans sending money home fell to 56 percent from January to June, from 80 percent in 2006.

You can find primary results from the survey here.

So – good news for the GOP-types (I heard Tancredo say the other day there were some 12 to 20 million illegal immigrants here. Where those extra 1 to 9 million or so came from I don’t know):

In the survey, only 49 percent of the Mexicans living in states with relatively recent immigration said they expected to be living in the United States five years from now. Sergio Bendixen, a Miami pollster who conducted the survey, said the percentage of Mexicans considering a return to their country was the highest in the more than two decades he has interviewed Hispanic immigrants.

The immigrants in the survey included American citizens and legal and illegal residents. They identified discrimination as the biggest problem they faced, with 83 percent saying that discrimination against Latin American immigrants in general was growing in the United States.

“Mexican immigrants don’t feel welcome in the U.S. anymore,” Mr. Bendixen said. “They feel they are not wanted here, and their contributions are not appreciated.”

Imagine, feeling unwanted. When they are given so much, and held in such high esteem. First things first, then – the implications for Mexico of the declining remittances. This was a form of international capital flows that was not only booming but – allowing for some unnecessary nay-saying – rather a wonderful phenomenon for the pro-globalisation crowd. International remittances made up a pretty good counter-point to arguments about exploitation, brain-drains, etc. (we’re talking USD23bn to Mexico, last year).

So, bad for Mexico – and not uniformly: remittances are non-uniformly distributed, by type (social or family) or municipality. From the study just linked:


I confess to knowing bugger-all about Mexico, except that an incredibly attractive former colleague lives there (hi, Sandra!). I imagine, though, that some of these municipalities will fare worse than others for a slowdown on this form of income, whether social (aimed at development) or family (food and medicine for the wife and kids you left behind, I guess).

Second, bad for the US! I use this image

NY Times pic

from this New York Times story (Pickers Are Few, and Growers Blame Congress), to discuss globalisation, etc. in my Eco 1 class. Funnily enough, back then it was about immigrants stabilising, and moving away from seasonal work (i.e. picking). Now they may be moving away from the US.

And to think we called them the Do-Nothing Congress. Shame on us.

Yes, for all the garbage about immigrants doing jobs ‘we’ don’t want to do, or however the argument is spun, I can see all over this fine city what it means to have an army* of immigrants on hand (and why Bloomberg consistently pours scorn on all these mass deportation plans – yeah up yours, Bill O’Reilly. You tantrum-throwing dickhead).

*army? Yes, army. It won’t matter what internationality of restaurant you enter (Chinatown a possible, notable exception), wander out to the kitchen or order something to be delivered. See who you get. I’ll get to the difference between Mexican and Central American immigrants in a sec.

Fortunately, in this regard, it is states with new/recent immigrants that have shown the declining/halting remittances, the saving behaviour and likely re-migration homeward, rather than states with very established immigrant communities, such as Los Angeles or New York. From the report:

States that have long had large Hispanic communities, such as California, Texas, Florida and New York, have not seen similar falls. In “traditional destination” states the percentage of Mexicans who regularly send money home slipped to 66% from 68% over the same period.

A fight at the bottom?

Also from the original report:

The flattening of remittances flows to Mexico contrasts with the continued growth of money transfers to Central American countries. Remittances to El Salvador, Guatemala and Honduras rose by an average 11% during the first half of 2007, compared with the same period last year.

Mexican and Central American migrants have similar demographics in terms of ages, incomes and length of residence in the United States. Most of them work in industries such as construction, hotels, restaurants, food processing and agriculture. A major difference is that almost all Central Americans (97%) live in traditional destination states, while more Mexicans (18%) have spread to new destination states.

Most migrants said it is harder to find jobs for good pay now than last year. Among the main obstacles mentioned were the lack of legal immigration documents, formal education and proficiency in English. A vast majority also felt discrimination against Latin Americans has grown.

So culture-specific clustering is having interesting results, now. For the establishment destinations, it would appear there isn’t such a problem (possibly related to people like Bloomberg and Villaraigosa being in charge? I don’t know). If the clustering is as strong as it would seem, only Mexico is likely to face significant drops in remittances (another chance for Carlos Slim to shine). It also reinforces, more than a little bit, standard stereotypes about the United States and multiculturalism, if this expansion of immigration into the heart of the country is slowing-to-failing.

I’d comment more about that, but I just don’t know the phenomenon, or this country, nearly well enough. The survey showed responses supporting the hypothesis, but living standards, and the costs thereof, could be sufficiently different. It could be pure economics (New York may be expensive, but New York also as slums for a reason – you think the kitchen work is exploitation? Try Queens or the Bronx. Housing here is expensive for idiots like me – just my wife and me in this apartmen, not two entire families splitting the rent).

It could also be that there is cultural heterogeneity to those fruit-pickers/seasonal workers who had left those farms in California, for stable construction jobs – hello, housing recession. The survey identified, as above, more difficulty finding decent jobs, but it doesn’t explain whether the language, documentation, etc. barriers had fallen on the same jobs, or applied to new types of jobs, now that the old type (construction) of jobs were no longer there. Even then, the barriers themselves could be the result of discrimination (lord knows, the legislation that generates it usually is). Of the respondents, 45% said documentation was the primary reason for their troubles, vs. 21% for availability of jobs. Discrimination and The Political Situation rated only 7% and 2%, respectively.

Either way, it is worth watching – if only because, in an era of neo-McCarthyist attention being paid to illegal residents, international remittances are probably a good proxy to measure things like welfare and job security (around half the respondents to this survey were illegal immigrants). It could also just be a blip – fortunately the IADB’s Multilateral Investment Fund is planning a follow-up survey early next year. Should be very interesting indeed.


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