Wilting Wages: Money Sent Home to Mexico Declines as U.S. Economy Deteriorates

Jennifer Janisch Dec 12, 2008

Gabriel, a middle-aged undocumented Mexican immigrant, sits shivering, hunched over on a plastic crate, his hands shoved into the pockets of his green hooded sweatshirt. He could easily be mistaken for a homeless man, waiting outside an East Harlem pizza parlor on a freezing November afternoon, hoping to score the spare change of a kindhearted stranger.

Suddenly, he jumps up from his makeshift chair and approaches a grocery cart full of flower bouquets, their hues shockingly bright in the gray rain. He has a customer, his fourth and last sale of the day. With strong brown hands, dry but clean, he trims the red rose stems, carefully wraps the flowers in green tissue paper and hands them over in exchange for eight dollars.

After ten hours of selling flowers, Gabriel will retire to the room he rents by the week with $40 in his pocket.

“The economy is really down. I’m making less than when I came to this country. It’s not enough,” Gabriel says. “I thought things were going to go well for me in this country, but I’m doing pretty badly.”

The National Bureau of Economic Research recently announced the U.S. economy entered a recession in December 2007. But Mexican immigrants have felt the ever tightening grip of financial hardship for far longer. As construction and service industry jobs dry up, they are sending less money home.

“Before, I used to send $300 or $400 every two weeks,” Gabriel says. “Now I’m sending $200 or $300 a month.”

Joanna Villacres, a teller at a money transfer office in East Harlem, says immigrants are still sending money home with the same frequency, but that the amount of each money transfer, or remittance, has gone down in recent months.

“If they sent $400 before, they’re sending $300 or $150 now,” Villacres says.

Until recently, the amount of money Mexicans in the United States sent home was soaring. But according to a report released last month by the Inter-American Development Bank, remittances are expected to fall from $24 billion in 2007 to $23 billion in 2008. Meanwhile, the U.S. Department of Homeland Security has reported declines in border crossings. And this summer, the Center for Immigration Studies estimated that the number of illegal immigrants currently in the United States had declined since August 2007 from 12.5 million to 11.2  million.

“That means trouble for Mexico,” says Fred Rosen, a senior analyst with the North American Congress on Latin America and a former economics professor. “I think there is a general recognition in Mexico … that if this becomes a really, really deep recession, or even a global depression, that Mexico is going to suffer very, very badly,”

Rosen says although remittances make up 3 percent of Mexico’s gross domestic product, a vast number of Mexican families benefit from and are heavily reliant on the cash they receive from their relatives abroad. He says the economic crisis in the United States will have tremendous ramifications for Mexican families.

“When Uncle Sam sneezes, Mexico catches a cold.”

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