by Martijn van Tol*

06-10-2008

The US credit crisis is also claiming victims far away from home. Latin American migrants in the US are sending far less money home than expected. The migrants and their families in their countries of origin are the victims of a faltering US economy. The double threat of job insecurity and inflation means that poverty is now a serious risk.

Reversed trend

The Inter-American Development Bank (IDB) in Washington keeps track of migrants' remittances to their families in Latin America. Around 30 million Hispanics are meeting US demand for cheap labour.

Since the 1990s, the total amount transferred to relatives ‘at home' had been increasing fast, but the current crisis has led to a reversal of this trend: in 2008, migrants are expected to send home a total amount of 67.5 billion dollars, an increase of 1.5 percent compared to the year before, but a serious drop compared to earlier years. From 2000 until last year, growth was consistently in the double digits.

Halved amounts

The decrease first became apparent in Brazil and Mexico, quickly followed by El Salvador and Guatemala. Mexico depends on migrants' remittances for eight percent of its Gross Domestic Product compared to 12 percent in Guatemala and no less than 18 percent of El Salvador's GDP. And these are the official statistics, which do not include US dollars passing the US border under car mats.

Salvadorian Regina Guttierez says "I feel bad, I want to send more money". She lives in Washington, just like 145,000 other Salvadorian immigrants.

"My husband was fired from his job as a construction worker. We used to send home 100 dollars a month, but now we send only half that amount."

Shopping

In addition to the North American recession, high inflation in a number of Latin American economies is also seriously affecting the spending power of migrant families.

Robert Meins, founder of the Foundation for International Migration and Development:

"These families are receiving less remittances while costs have been rising, which goes at the expense of daily shopping, education, health care, their ability to save, and for example investments in small businesses, and these are extremely important factors for the futures of these families".



The US recession, a weaker dollar and rising inflation have meant that both the migrants in the US and their families in their countries of origin are worse off. Migrants are at risk of losing their jobs. Of the 10 million Mexicans working in the US, 25 percent earn their living in construction. An estimated 10 percent have already lost their jobs. They, as well as their families in Mexico, are at risk of sliding into poverty.

Fear and uncertainty

Donald Terry, former manager at IDB says that jobs lost, or the threat thereof, are not the only reasons for the decrease in remittances:

"The workers who are currently in the United States, there is such a degree of fear and uncertainty about the future, and even sometimes a hostile environment, that they are rationally deciding they have to save a little bit more to deal with the contingencies and uncertainties of the future."

The crisis will definitely have an impact on the two million Filipinos in the US. The Philippines depends on remittances from migrant workers for 10 percent of its GDP.

Elena Sana of the Manila-based Center for Migrants Advocacy warns:

"If there will be less money coming here, then that will mean more poverty because the main reason for the mass migration that we are seeing in the country now is because of the poverty and the lack of job opportunities in the country."

Migrant workers are most vulnerable to downturns in the economy, but former bank official Donald Terry warns against unnecessary doom and gloom:

"Migrants are incredibly resourceful, they may lose their jobs in construction but they will make sure they find one, or even two, other jobs to replace them."

The Latin American workers will need all the resourcefulness they can muster, because the end of the US economic crisis is not yet in sight.



*RNW Translation (gsh)

http://www.radionetherlands.nl/currentaffairs/region/northamerica/081006-US-migrants