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Economic Freeze Cuts Remittances, A Lifeline For Migrants Press "Enter" to skip to content

Economic Freeze Cuts Remittances, a Lifeline for Migrants’ Families

ÁPORO, Mexico — The money would arrive like clockwork: $300 every couple of weeks, sent by her husband, a day laborer and undocumented immigrant living in Indianapolis.

It was the only source of income for María Alejandre and six other family members in Áporo, a small town in the western Mexican state of Michoacán.

But more than four weeks have gone by since Ms. Alejandre’s husband last sent money, and with his work opportunities drying up amid the coronavirus pandemic, Ms. Alejandre is deeply worried.

“If the economy gets any more difficult,” she said, “well, we don’t know how we’re going to eat.”

The pandemic — and government measures to combat it — are snapping financial lifelines around the world. As millions of workers in the United States and elsewhere see their hours cut or lose their jobs entirely, many are no longer able to send money to relatives and friends back home who depend on these remittances to survive.

Migrants and others sent some $689 billion in global remittances in 2018, according to the World Bank, helping to reduce poverty in developing countries, boosting household spending on education and health care, and helping to keep social and political discontent at bay.

But analysts now predict that government lockdowns and other responses to the pandemic are going to severely reduce remittances this year — a slowdown that has already begun. The World Bank said Wednesday that global remittances are projected to plummet by about 20 percent this year, in “the sharpest decline in recent history.”

A major decrease in remittances could have potentially far-reaching impacts in some poor and developing nations, causing not just economic duress but also political and social tension, said Roy Germano, who teaches international relations at New York University.

“I don’t think governments want to see this money contract because it functions as a sort of de facto social welfare system,” said Mr. Germano, author of “Outsourcing Welfare,” a book about remittances. “In that way, they take pressure off governments to provide welfare assistance and guarantee a certain standard of living.”

A collapse of remittances, he said, could lead in some places to a heightened risk of civil unrest and political instability.

Mexico is the third-largest recipient of remittances among all countries in 2018 — after India and China, according to the World Bank — but the largest recipient of money sent from the United States.

And amid the American economic slowdown in recent weeks, millions of undocumented Mexicans in the United States, like other immigrant populations, have been left particularly vulnerable in the absence of job security provisions and unemployment benefits.

Still, President Andrés Manuel López Obrador of Mexico pleaded with Mexicans abroad earlier this month to keep the remittances coming, even while acknowledging that they were also going through a difficult time.

“Don’t stop helping your relatives in Mexico,” he said.

In Mexico, perhaps no region of the country will feel the impact of plummeting remittances more than Michoacán, the Mexican state most dependent on money sent from abroad, according to the government.

In recent decades, hundreds of thousands of people from Michoacán have made their way to the United States, found work as busboys and construction workers, landscapers and domestic workers, and sent a portion of their earnings home.

In 2018, Michoacán received nearly $3.4 billion in remittances, more than any other Mexican state, amounting to about 11.4 percent of its gross domestic product, according to an analysis by the National Population Council, BBVA Foundation and BBVA Research.

The small rural municipality of Áporo, like many other such settlements across Mexico, is linked to American towns and cities far away by the stitching of northbound migration and the return flow of money.

By the estimates of Áporo’s mayor, Juan José Mendiola, more than 1,000 of the municipality’s 4,200 residents live in the United States, with particularly significant concentrations in Lansing, Mich., and Los Angeles.

Migrating to the United States, he said, is so common, particularly for young men, that it’s “like a way of life.”

Several dozen families in town have told officials that their remittances have dried up and that they’re struggling to feed themselves. This may be just the beginning, Mr. Mendiola said.

“We’re very aware that we can’t yet measure the extent of the effects of this,” he said.

Ms. Alejandre, 49, her husband and their two eldest children left Áporo about two decades ago and headed to the United States in search of work. The family settled in Phoenix, where Ms. Alejandre worked as a cleaner at a Motel 6 while her husband worked as a day laborer in construction.

They had three more children in the United States and periodically sent money back to Áporo to support relatives and pay for the construction of a house that they hoped to live in some day.

That time came earlier than they expected. Ms. Alejandre lost her job after the global financial crisis in the late 2000s, and her husband struggled to find consistent work. So, they returned to Áporo with their children and moved into the two-story home their remittances had built.

In 2018, lured once again by the promises of a booming American economy, her husband migrated to Indianapolis.

The biweekly remittances he sent home seemed like glorious windfalls after the wages of, at most, $20 a day he had been earning on Mexican construction sites in Michoacán. But now those have come to an abrupt end.

“He said that if the crisis gets more difficult, he’ll be left without work,” Ms. Alejandre said on a recent afternoon, sitting at her kitchen table with two of her American-born daughters and her brother-in-law, Salvador Ponce, 47.

The family recently exhausted their meager savings to care for Ms. Alejandre’s ailing mother-in-law, and they were trying to make the last transfer of money stretch as far as possible.

“If there aren’t remittances, there’s nothing,” Mr. Ponce said.

The uncertainty they face echoes across Mexico.

Martha Sánchez, who lives with her two young sons in Ciudad Hidalgo, a city in northeastern Michoacán, said her husband was fired last month as a hotel cleaner in Louisville, Ky. He hasn’t found another job and has not sent money home in six weeks.

Ms. Sánchez said she may be forced to start selling possessions to cover rent and food. Their car, an 18-year-old Volkswagen Jetta, may be the first thing to go, she said.

Meanwhile, she and her boys are following stay-at-home orders and hunkering down in their small apartment, trying to stay safe.

“If it’s not the virus, it’s the economy,” she sighed.

Guilt weighs heavily on migrants who have seen their jobs vanish and now have to tell relatives back home they have nothing to send.

César, 42, a Mexican migrant living in New York City with his wife and five children, lost his job as a restaurant line cook more than a month ago.

He, along with two sisters and a brother who also live in the United States, had been supporting their mother in the state of Puebla. But his sisters also lost their jobs, and now there is a lot less money to send home.

“You feel a little bad for your families,” lamented César, who asked that he only be partially identified because of his undocumented status. “It’s affecting all of us who have moved here.”

In the face of bleak employment prospects, some migrants have decided to return home; Ms. Alejandre said her husband is considering this.

“His being here would be good for us as a family, but economically very bad,” she said, adding that they’re hoping the American economy starts to rebound soon.

“He’s going to wait a few more days and see what happens.”

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