Money Sent Home by Mexican Workers in U.S. Falls Sharply

The New York Times

By ELISABETH MALKIN Published: June 1, 2009

MEXICO CITY — The amount of money sent home in April by Mexicans working in the United States fell by almost one-fifth compared with a year earlier, the central bank said Monday, marking the largest decline since the authorities began keeping track of such transfers.
Remittances, as the transfers are known, have been sliding since the end of 2007, when the construction industry in the United States began its sharp decline. Many Mexicans who had found work in building and landscaping during the boom years quickly lost their jobs. Then, as the overall United States economy fell into a recession, Mexicans in other industries, including restaurants and manufacturing, also lost their jobs.
But the pace of decline in the money transfers gathered speed this year, falling 8.7 percent over the first four months compared with the same period last year, the central bank, the Bank of Mexico, reported. Migrants sent $1.8 billion in April, 18.7 percent less than in April 2008. There is no single explanation for the sharper drop in April, said Eliseo Díaz González, an economist who studies remittances at the College of the Northern Border outside Tijuana.
Migrants have either lost their jobs or taken jobs with lower pay. At the same time, without good prospects of finding work in the United States, many Mexicans have decided not to risk crossing the border illegally. “We are seeing the aggravation of all these trends,” Mr. Díaz said. “With opportunities for employment in the United States shutting off, we cannot continue to export labor to the United States anymore. The prize for migrating no longer exists.”
Philip Martin, an expert on migration at the University of California, Davis, said it was too early to say if the sharp drop would be repeated in the statistics for May. “It’s going to be down in 2009,” he said, “but the question is how much.”
Along with the big jump in unemployment in construction and the decline in new arrivals — who tend to send more money — Mr. Martin said a possible factor in the newly released figures was that some illegal immigrants might have paid taxes in April in the hope of an eventual amnesty.
Last year, remittances fell 3.6 percent compared with the previous year, to $25 billion. In a recent report, the Bank of Mexico said Mexicans in the United States were disproportionately employed in sectors of the economy, like construction, that had declined the fastest. In addition, a crackdown on illegal immigration, both along the border and in the workplace, has made it harder for Mexicans to find jobs.
Although remittances are one of Mexico’s largest single sources of foreign exchange, their effect is concentrated in particular states and regions. Remittances have helped to reduce poverty in those areas, but that could be reversed if the steep decline continues, Mr. Díaz said. April was a particularly difficult month for the Mexican economy. Another source of foreign exchange, the tourism industry, was devastated in April by the outbreak of swine flu.

A version of this article appeared in print on June 2, 2009, on page A5 of the New York edition.