Cash pipeline to Mexico squeezed
Money sent home from immigrants dips as U.S. economic woes intensify
By DUDLEY ALTHAUS
Mexico City Bureau
Oct. 1, 2008, 10:44PM
MEXICO CITY The amount of money sent home monthly by Mexicans living in the United States dropped to its lowest level on record in August, Mexico's central bank reported Wednesday.
The report fed expectations that the U.S. economic turmoil will spill south of the border, in part because the incomes of legal and illegal immigrants will be squeezed. Remittances trail only oil in providing foreign income to Mexico. The country's oil income has been dropping as prices and production decline.
“The prolonged slowdown of U.S. economic activity has adversely impacted employment opportunities in that country and consequently those of Mexican migrants,” the Banco de Mexico said in its report.
Mexicans sent home $1.9 billion in August, a more than 12 percent drop compared with the same month last year. Overall, remittances dropped a little more than 4 percent in the January-August period compared with the same eight months in 2007.
Some leaders of Mexican expatriate groups in Texas said they were not surprised.
Rodolfo Cuellar, who heads a San Antonio organization for immigrants from Mexico's Coahuila state, said the building downturn has clobbered the foundation sub-contracting company he's run for 38 years.
He has been turning away once fully employed construction workers.
“These are folks who used to be able to send as much as $300 a week back home,” Cuellar said. “Now their pockets are empty and they can't even pay rent.”
The central bank pointed out that Mexican immigrants now make up nearly 14 percent of the U.S. construction work force and 7 percent of U.S. manufacturing employees.
One in five Mexican immigrant workers labors in construction, while more than half work in service industries such as restaurants, hotels and gardening, the bank estimates.
Mexican immigrant workers send an average of about $350 a month home to family members, the Banco de Mexico said.
Other experts say the drop in remittances might have more to do with the heightened immigration enforcement along the border.
“I think that has played a fundamentally serious role in this more than the slowdown,” said Manuel Orozco of the Inter American Dialogue, a Washington think tank.
Mexico's leading businessman said the country should be able to weather the storm.
“Mexico has the macro-economic and financial basis to overcome the crisis,” said Carlos Slim, who controls a host of Mexican companies.
Hernan Rozemberg of the San Antonio Express-News contributed to this report.