The money had traveled a lot during the time he returned to painting paintings in June, fed his family, financed his father’s hernia operation and paid for other medical expenses.
At the beginning of the pandemic, experts predicted that migrant staff in the United States, such as Luis, 32, who did not need their last call used to worry about wasting their homework and being deported, would move less cash while the virus hit. the virus, economy, but those predictions didn’t materialize for Mexican personnel, who sent home huge sums of cash, called remittances.
In August, its bills were $3. 57 billion, according to the Bank of Mexico, the highest time ever recorded for a single month and 5. 3% as of August 2019. Payments in the first 8 months of 2020 rose to $26. 4 billion, up 9. 4% more than the same time last year.
Huge sums of cash moving south, most commonly through wire transfers, have baffled some economists, who say their initial forecasts underestimated the strength of “human networks” between Mexican migrants in the United States and their families at home. driven by a weakened Mexican peso and $600 U. S. unemployment benefits consistent with the week that expired in late July. Despite this, the outbreak continued in August.
“We are very surprised at his ability to recover,” said Jonathan Fortun, an economist at the Institute of International Finance in Washington, on payments.
Family money in the United States has long been a lifesaver in Mexico; payments are for low-income families for expenses such as food and clothing; they also cover medical needs, pay off debts, and finance investments such as housing.
In 2019, remittances reached a record $36 billion, according to the central bank’s knowledge, more than Mexico earned that year for foreign tourism or annual oil exports, and are on track to surpass it this year. United States, home to about 37 million people of Mexican descent.
Payments have become more important. Mexico does not provide federal unemployment benefits and staff and businesses received little relief from the pandemic. Between April and June, Mexico’s economy contracted 17% compared to it was last year, and in June, a government company measuring poverty found that 48% of the country did not earn enough to cover a basic food basket.
For Luis, the logic is simple: as long as his employer, a leading fruit and vegetable manufacturer in California, kept him in the fields, he would continue to send as much cash as he could to Mexico.
“More than anything, for your health, ” he said of his family. “So they leave (the house) too much. “
He has sent more than $2,000 since April to Tecoanapa, a deficient coastal district of another 47,000 people in Guerrero state where his parents, 8 siblings and 84-year-old grandmother live. Luis says the orders he sent made him more comfortable when he was about 3,700 kilometers away from a pandemic.
“With all this stress,” he said, “instead of cutting the explanation for why sending money, in my case, I tried harder. “
In August, the peso lost about 12% of its price against the dollar compared to the same month last year, which led to an additional increase in remittances, says Pia Orrenius, senior economist at the Federal Reserve Bank in Dallas. that largely explains the strong numbers.
In addition, many Mexican migrants who send cash are agricultural staff, delivery drivers and structure staff, industries that have only stopped working briefly or never closure.
Orrenius says this is a component of history. Mexican personnel in the United States have suffered from closing places for food and tourism, he said, and federal knowledge shows that the unemployment rate for Hispanics, whether of foreign or American origin, is more than double prepandemic levels.
“They were incredibly affected,” Orrenius said, “but government checks and unemployment benefits provided a buffer for those who are legally in the country, he said, and some of that cash would possibly have been sent to Mexico.
Even after those benefits expired, the cash continued south.
“He talks about recoverability and family priorities,” said IIF economist Fortun.
The pandemic has had asymmetrical economic effects on other Latin American migrants in the United States. Remittances to Guatemala, Honduras and El Salvador, much more dependent economies, fell in the spring before rebounding. Mexico’s other joy suggests that its staff in the United States. were greater from the initial impacts of the pandemic.
A very likely explanation for why more Mexican migrants have lived in the United States for more than a decade compared to the immigrant population in general, according to the nonprofit Washington Migration Policy Institute. Workers with longer histories in the United States tend to have more savings than Mexican expat economists exploited to send cash home.
Luis is one of them. He says he lived in the United States without legal prestige for thirteen years and never returned to Mexico. In May, when his employer marked him and the rest of the staff for nearly a month, he said he had taken advantage of what he had stored last year to pay the expenses and send cash home.
He fears contracting the virus when he leaves Fresno to paint with two other men and supplies the estate’s bathrooms, and thinks about what would happen to his circle of relatives in Tecoanapa if he couldn’t paint.
“There came a time when Array . . . I felt so nervous that I couldn’t sleep,” Luis said.
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