Against expectations, the feared plunge in remittances, as during the US Housing Bust, did not occur. For interesting reasons. Weirdest Economy Ever.
By Nick Corbishley, for WOLF STREET:
The total amount Mexico received in “remittances” — transfers of money by workers of Mexican descent mostly in the US but also other countries to individuals in Mexico — surged by 11.4% in 2020 to $40.6 billion, the highest ever, and the eighth year in a row of increases, according to data released by the Bank of Mexico.
This occurred in the midst of a terrible economy in the US, as GDP fell by 3.5% in 2020, the worst annual decline since 1946, triggering a wave of business closures and tens of millions of job losses in the U.S., where 98% of the remittances to Mexico originate. In the wake of the Global Financial Crisis, which was sparked by the US mortgage crisis and housing bust and resulted in a protracted downturn in US housing construction, there was a six-year downtrend in remittances to Mexico, totaling 21%. The opposite has happened during this downturn:
Mexico is the third largest recipient of remittances worldwide, behind India ($83 billion of inflows in 2019) and China ($70 billion), both with populations more than ten times larger than Mexico’s.
Now more than ever, the remittances are a lifeline for the country’s economy, which shrank by 8.5% last year. As GDP has shrunk, the public debt-to-GDP ratio has surged from 45% to 52%, its highest level on record. Much of this debt is in foreign currency that Mexico cannot inflate away. With the economy in its deepest recession since 1932, many people are now even more dependent on the funds sent by relatives working in the U.S. or other overseas countries. In some Mexican states, those funds represent as much as 10% of total revenues.
In 2020, remittances accounted for 3.8% of Mexico’s GDP, up from 2.9% in 2009. That is the equivalent of almost three times the amount of funds that state-owned oil company, Pemex, obtained from its exports of crude oil and other hydrocarbon products in 2020 ($14.8 billion, down 34% on 2019) and almost twice as much as the foreign direct investment that flowed into Mexico (approx $23 billion).
The last year saw a surge in both the number of transactions made as well as the average amount sent in each transaction, according to the Bank of Mexico. Here are some standouts for 2020:
- A total of 119 million transactions were executed, almost 8 million more than in 2019.
- Around 98% came from workers in the US — American citizens of Mexican extraction or Mexican citizens in the US legally or illegally. A further 1.6% came from workers in Canada, 0.3% from workers in the UK, and 0.2% from workers in Ecuador.
- The main U.S. states of origin of the remittances were California, Texas, Minnesota, and Arizona.
- The Mexican state of Jalisco displaced Michoacán as the main recipient of remittances in Mexico, which had held the first place for more than 15 years.
- The average size of remittance in 2020 was $339, compared to $326 in 2019.
- Nearly all (99%) of the remittances were sent by electronic fund transfer: of them, 77% were sent via non-bank institutions such as Western Union and PayPal’s Xoom.
- The remaining 1% were money orders ($162 million) or cash and cash-like instruments ($276 million).
- Another record was set: the $4-billion monthly threshold was crossed for the first time ever in March, at the very onset of the virus crisis.
Why Are Remittances Still Rising?
With the global economy in the grip of its deepest recession since the 1940s, the theory early on was that remittances would decline significantly in 2020. On April 22, the World Bank forecast that they would fall by around 20%:
“The projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country.”
But the opposite has happened in Mexico. And it’s not the only place. In Guatemala total remittances rose by 8% in 2020, to reach a record high of $11.5 billion. El Salvador saw a 4.8% increase.
A similar trend has been observed in other Latin American and Caribbean economies that depend heavily on cash remittances, as well as in countries further afield such as Pakistan and Bangladesh. In many of these countries, the flow of remittances initially slowed in the first month or two of the crisis (between March and May) before picking up again shortly thereafter.
One reason for this is that US workers with roots in Mexico and other countries began receiving government support, such as unemployment benefits and stimulus money, which enabled them to continue sending money back to their families.
Another is that workers in the U.S. and elsewhere who weren’t overly affected by the crisis — such as staff at hospitals treating Covid patients or construction workers — decided to send more money to their families to help them weather the storm. This could also have spurred a rise in total remittance payments.
And there’s another possible reason: The money sent back has taken formal channels, as travel restrictions have made it harder for people to take their money back to their families in the form of cash, thus diverting remittances from informal channels that are hard to track to formal channel that show up in the official data, according to a report by the World Bank. That could mean that last year’s surge in the flow of remittances to Mexico and other parts of Latin America may not be quite as impressive as the figures suggest. Be that as it may, the situation for the recipient countries is still a lot better than many had feared. By Nick Corbishley, for WOLF STREET.
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Just starting a major remodel job on my house. The cabinet maker is Cuban, the plumber is Cuban, the electrician is American, the floor guy is Guatemalan or Mexican, as well as the Demo guy and painter. The house behind me is getting a new tile roof. 12 man crew showed up at 8. They appear to be Mexican or Guatemalan. The landscape guy who is putting in my hedge is Mexican or Guatemalan. These men work harder than any mid American ever did. And in the heat. The never complain about anything. They take care of their families and don’t drink or drugs.
These are the people that are making America Great!
Just out of curiosity…why the Mexican or Guatemalan dilemma?
Could you really tell they weren’t from Honduras, El Salvador, Belize, Costa Rico, Panama, etc.?
Our rich coastal community has a lot of hispanic mostly Guatemalan workers. They started working for landscape companies but others have come with trade skills. Their families have been here for decades. Our church has a mass in Spanish. They give back to the community. I don’t know who is documented or not. These subs have worked for my subcontractor for eight years. Everyone is fair. My contractor is a women. More practical. Her children are grown. She doesn’t drive a 60k pickup or need a 150k fishing boat. Everyone is winning here. Her subs make more working for her, I got a more affordable quote and she lives a life style that suits her needs. She also lives in my community. The quality of her work speaks for itself.
Years ago we opened a resource center to aid our immigrant community. Safer for them than being scammed on street corners by contractors looking for cheap labor. Trump chose not to go after our safe harbor town. El Sol is next to the police station and only 3 miles or so from Trump National. They are a blessing to our town.
https://friendsofelsol.org/
She doesn’t drive a 60k pickup
really
got my roof done year ago in Tucson
CONTRACTOR(yep they got license) drove up in nice $60k truck
he’s mexican/had LOW PRICE(2 brothers own it)
had 1 white guy working for them
btw – my landscaper is 45 year old WHITE WOMAN(married to mexican)
grateful for the work – and keeps 5 properties pristine
don’t have to hound her either – I just point and she’s off
There’s more to culture and assimilation that “working hard.”
Hmm…
Not sure that you are on the right side of that argument.
“Cheap”
Hard working and cheap.
Near slave labor is cheap. Until your family can’t find work at a livable wage.
If you think quality work is expensive, you should see how much cheap work costs.
And no skills. Job stealers who reduce your wages by being here.
“These men work harder than any mid American ever did. And in the heat. The never complain about anything. They take care of their families and don’t drink or drugs.”
Sounds like you are giddy to have your Proud Amigos.
I would be curious about how hourly wage your workers are actually paid (and if they are paid in cash under the table away from the eye of IRS), and whether they have any benefits like vacation time and sick leave, and health insurance. You know, little things that American workers have come to expect to earn a decent living.
LOL. American workers in construction are not mostly receiving benefits and most are paid in cash. If Congress had the coconuts to make a firm stand on illegal immigration at least the rules would be clear or maybe enforced. Most of the Spanish living in the U.S. should be given a way to complete legalization without fear of deportation unless they have a criminal record. That’s just the way it is and only way to fix it.
The U.S. has failed Mexico and central America miserably. Mexico should be a neighbor like Canada. Mexicans love their country more than we do and would rather live there. If I felt comfortable about living in Mexico or Cent America I would move there in a cold New York minute.
I had a girlfriend from Mexico with teaching skills. The schools she worked for there were corrupt as hell, cheating her out of her salary. Talk about women’s rights? Mexicans are not afraid to work hard and you have to respect them for that. (No, I’m not Spanish.)
Sorry to be pedantic, but “Spanish” should not be used as a synonym for “Hispanic” any more than you would call someone from Cameroon “French” or from the United States “English.”
Legalizing and rewarding several broken laws is Not the only way,how luicrous!When raising kids or maintaining peace in a classroom,rulebreakers or out of control kids should not be rewarded for misdeeds or dangerous disruptive behavior.Here is a thought..Enforce the law from crooked politicians and hedgefunders down to co.s which knowingly hire illegal workers to the people who Illegal trespassed here,fraudulently got various benefits and services.Why do other countries have 0 problem with saying certain things are legal while others are not.Why do foreigners think they have a Right to be here?I do not think I have a right to sneak into Canada,Mexico,Germany,wherever.
Brant,
“Most of the Spanish living in the U.S.”
Since the vast majority of the remittances are going to Mexico, why the goofy, tortured efforts to call the remitters anything but Mexicans (Spanish?, etc…what next, LatinX? At least Hispanic would sound like it wasn’t coming from a reflexive bot).
Not only does this smack of PC, it smacks of some sort of lobotomized version of PC, as though Mexican were some sort of dirty word.
“The U.S. has failed Mexico and central America miserably”
Are other countries supposed to be wards of the US? Do you picture yourself as Batman, cruising for a Robin?
“If I felt comfortable about living in Mexico or Cent America I would move there”
Unsafe conditions *there*, are the fault of the US? And, by assuming vast criminality/safety issues, aren’t you making racist assumptions?
(Strange love/hate attitude)
“had a girlfriend from Mexico with teaching skills. The schools she worked for there were corrupt as hell, cheating her out of her salary.”
Again, how in the hell is this the fault/responsibility of the US rather, than, say, *Mexico*?
“rules would be clear or maybe enforced. Most of the Spanish living in the U.S. should be given a way to complete legalization”
Some don’t want to be citizens, they want to make money & go home where it is cheap & they speak the language.
If they were citizens and lived here….they wouldn’t want to work for cheap, without healthcare & in unsafe conditions because they would have the same cost of living as we do. They would start thinking long term & fight for higher pay & benefits.
I’m sick of the cash only, semi-legal status. Let the ones who have been here for a long time & plan to stay apply for citizenship. Kick the others out & enforce it.
The ones that are here temporarily/illegally just for the money undermine the local workforce.
For those critical of the use of the term “Spanish” here, this seems to be an East Coast regionalism and common parlance used there to refer to Hispanics or Spanish speakers generally. I’m from the West Coast and was taken aback when I first started hearing this, but it seems to be the norm from New Englanders.
Your full of crap. I was a mason all my life and can work a Mexican into the ground. They work hard but have no skills. You don’t know what working hard is. I live in Florida and have been working in this heat my whole life. There’s not a Mexican in this country that could keep up with me on a mason job.
They don’t drink? Do they take their wings off before they start working? Hahahahahha! We had three central american bothers or 2 bros and a cousins (its fluid) build a large carport and do other work. They drank like fish at night but showed up every day and humped it! BTW, we were one of their last jobs… they had built houses and a market back home and were going home to run the mercado.
Good dudes, hard working, but they were not tea tottlers :)
Yep,illegal,hungry,desperate people with ten mouths to feed tend to be hardworkers if they work.Its great to get dirtcheap labor,isnt it while neighbors who are here Legally and speak the language scramble for 12$ an hour jobs that Might last three months.
Any other stereotypes you want to throw in?
“hungry,desperate people with ten mouths to feed…”
Don’t fall reflexive prey to media conditioning about “facts” nobody actually knows, for individuals or in aggregate.
I might add that illegal immigrants’ children who are born within US borders are automatic citizens and can receive any and all government welfare and subsidies as any other citizen.
Since they are raised and schooled in US they likely don’t have the so-called ‘Mexican work ethic’ (I think that is mostly a virtue-signaling myth) of first-generation illegal immigrants. And these second-generation children are a large cohort and growing larger.
I have seen some Mexican labor work results on roofing, painting, etc. Their skills and workmanship are some of the shoddiest I’m aware of.
I can’t speak to locations other than suburban Denver and the suburban Bay area, but in my experience in the places I have lived, the people doing landscaping and construction are from Mexico or Central America, I have no way of knowing their immigration status, and this is true for the shady side business people as well as the mainstream contractors.
In these two areas, both of which are affluent, there are simply not enough local people interested in the hard working construction and landscaping industries. I can’t speak to other parts of the country. It has been this way for at least 20 years. I’m not sure who would do this work, not to mention picking fruit and vegetables, if not for immigrants, both legal and illegal.
Mexican work ethic isn’t virtue signaling. Talk with people who farm. US born people who work the harvest typically don’t last a day. Farm work is back breaking labor. people from Mexico and Central America are willing to do this in a way that we are no longer capable of. You can call it what you want but it isn’t the myth, it’s the truth.
Totaly true.ALL mexicans ihired as help,pretend that they work and do a BS job.Also constanly lie and steal ,if they have a chance.I paid the mf 30$ hour cash.Do not hire them for 5 years already,they wanted 50$ cash an hour.
Many of the Cubans that fled are white.
Yes the FUD is thick, Massbytes
A Honduran illegal was just sentenced to 50 years in prison for killing a 19 year old American young man, and nearly killing his girlfriend while driving drunk. They had broken down on the freeway and were standing to the rear of their Jeep when the illegal alien plowed into them, killing the teen instantly and sending the girlfriend into oncoming traffic. She spent nearly 6 months in the hospital.
The Honduran had a BAC of over 3, no insurance license or registration, and had no business being in the US. He will be deported after serving his sentence. Thanks, Denise!!
Yes. Importing third worlders for votes and cheap labor has huge negatives that the elites like to gloss over.
Cool story. Been to Chicago south side ever? You don’t have to be an immigrant to be a killer.
How myopic to bring up a individualistic anecdote on a website specifically devoted to macroeconomics. There are a hundred decent Hondurans for every malicious one such as the one you described. Are you going to kill 100 chickens because 1 chicken was rabid?
The topic was Mexico receiving more money from it’s citizens working abroad than ever before. It would be good if you could possibly stick to that instead of broadcasting your prejudices.
I go around fixing these peoples’ shoddy workmanship. It has nothing to do with their country of origin or immigration status, it has to do with the fact that they are performing jobs that they are not qualified for, and that the homeowner doesn’t know enough about to spot the error of their ways.
“Plumb, level and square” is not in their vernacular. I am a craftsman, these people are, by and large, hacks.
Although your anecdotal information fits the current understanding and situation well d, you have some facts wrong.
As a young person born of mostly northern European stock and raised in SWFL, I went to work digging ditches and especially the special ditches called variously ”footers” or footings, depending on the locale.
I was working in full sun in summer in Naples, FL, and although it was very hot, my mentor at that time, a 75 year old man of African American stock managed to keep me safe and also teach me what to do to work hard manual labor in those conditions. He had been working for the contractors grand father and father in Chicago as a Union laborer since age 15, and was able to do more work than I could even though I really tried, work easily measured for quantity and quality, and he would come over and ”clean up” my ditches if they were anything less than perfect. as in perfectly flat bottoms at the correct depth , square corners and plumb sides.
Next year I worked with a similar guy, semi-retired from the Plumbers Union in Chi town, and similarly competent, knowledgeable, and willing to mentor,,, and I will never forget either.
Point is, back in the early 1960s era, there were no folks of Hispanic stock at all doing that kind of work, and no back hoes or similar machines either, it was just Americans whose families had been here for eva, Black and White, and we damn sure got along on the job.
Many years later, I watched as the Hispanic workers took over the construction industry in FL because of their willingness, and worked with hundreds of them, from almost every country of Central and South America, and found them to be industrious, etc., as is common knowledge.
What is not so common knowledge is that many of them would not work in crews containing folks from other Central and Southern American countries UNLESS the crew leader was American.
This was very clear when I was at a company with approximately 200 folks in the field and, speaking fair Spanish, was able to discuss the why of that with these folks, many of whom had, or had family members who had, suffered from neighboring country folks, and thus help upper management work out ways to help folks stay employed.
And BTW, that company made sure everyone understood every safety protocol by employing a guy who could speak English and Spanish as well as anyone I have ever know as their Corp. Safety Manager.
The work included very dangerous repair of compromised Post Tensioned cables, (look it up) as well as repair of failing balconies, etc., up to 40 stories above the dirt.
I could not agree more. In suburban Denver all landscaping and construction workers are from Mexico or Central America. They work amazingly hard and do excellent work. Speaking of someone who’s married to an immigrant from Asia, the continual flow of people from elsewhere who are not afraid to work hard is what makes this country great.
And that part is you will get a lousy job because this is cheap immigrant help, they have no skills and are not craftsman. This country imports workers and exports jobs. Not a house built in the last 20 years has any craftsmanship in it. I could show you so many mistakes it would make your head spin. Window openings 6 inches out of plumb, furred in with 3/4″ of wood at the bottom 6″ of wood at the top. All hidden by drywall and stucco. Rooms out of square, whole houses out of square. And fools paying ridiculous prices for a junk house built like crap. And as for the money getting sent back to mexico, that’s what they do. 20 Mexicans live in a house with mattresses on the floor. They come here to work and send all there money back to mexico, then go back to Mexico and build a house for 1/10 the price a house goes for here. Welcome to America where it’s all about profit. Mexicans have a choice stay in Mexico and take a outsourced job there or come here and steal a tradesmen jobs.
And you’re paying them off the books instead of giving the business to an American you are a disgraceful piece of crap and you should be arrested for fraud.
And….housing construction is still booming with zero interest rates, cheap/easy money and the taxpayers backing the significant majority of mortgages.
Most Mexican people I know are very loyal to their families in Mexico. I noticed my Mexican neighbors are not buying expensive cars as they have in years past. They seem to be making do with a little less. Most of them send money to relatives in Mexico.
A person would be either a fool or have to have solid connections to the cartels in order to personally transport cash across the border right now.
Unrelated interesting facts.. it costs around $10K to move a relative *safely* to the US from Mexico. This is what is paid for moving their nieces and elderly mothers etc.
The exchange rate is why Mexican people can afford to work for less. If someone is camping out or couch surfing then expenses are minimal and money sent back is of greater value. The younger generation who are citizens do not work as hard or for as little money. It doesn’t pay to do so- health and rent expenses are too great. In Mexico health expenses are cheap. IDK about rent as a percentage of income.
Giving illegal immigrants who have been here a while full citizenship would go a long way towards preventing the undercutting of American’s wages. It would be a lot cheaper than giving benefits without citizenship. Limits to immigration will happen no matter what the official rhetoric is.
Regarding Denise’s post,
I worked as a construction manager in the DC area and yes there was high percentage of Latinos on the jobsites. Most appeared to work hard and do a good job. However most weren’t payed a decent wage compared to what an American would be paid and a lot of them needed to be micro managed and we had a lot of quality control issues.
When I relocated to the Rust Belt where the trades are dominated by American union workers I noticed substantially less quality control issues and had to baby sit a lot less. Personally I enjoyed seeing Americans working well paid jobs without having to get a college degree. When it comes to taking care of families/drugs/drinking etc I think the Latinos were worse off considering all workers I got to know on a personal basis. Most immigrant workers were young men who partied hard hard in there limited time off, slept 10 to a house, saved as much as they could and most desired to move back to there home countries in a couple of years. I knew several of them that had two families too, one in their home country and a child or two with a side chick in the states.
I agree with what you say. They are usually very loyal in a financial way to their families though, if not in other ways..
Have been in my neighbor’s homes and have seen some “interesting” interpretations of structural integrity and how wiring and electricity works. Talked one close neighbor into not doing his electrical or gas work himself..
As long as everyone has a “me” first mentality this will be the way it will stay. Paying a status questionable ” individual to do your yard work feels great when you can pocket the extra. When they become your neighbors it will be too late to complain. Why no your neighbor you ask? Because the guy who as your neighbor that owned a small business could not compete and went bankrupt and had to sell.
Am I my neighbors keeper?
So true.
Americans who hire out construction building, repair or improvement work to a company that uses illegal immigrant labor are complicit in this whole mess of declining American blue collar labor clout for wages and benefits.
But just think of the money these American collaborators save accordingly that they can then spend to help out US GDP by buying Amazon and WalMart junk.
People are sitting around at home and spending their “stimy” on home renovations. There is a lot of cash in hand in the construction industry. The “stimy” money is flowing to South America and even more so to CHINA, and the CCP is using US money to build up their military to become the next world leader, ruling with an iron fist, communist-style.
“US Hausing Bust”
Wolf, love it when you speak German!?
Darn, he changed it. I got a kick out of the footnote about the statistical source being Bank Of Mexico. Began to wonder if they had a Hauptbahnhof in the Capitol.
NC,
There has been massive, widely cited fraud in the CA “Covid Bonus” unemployment program (large amounts going to numerous convicted criminals in prison, etc).
Why no reference to this as a potential, partial factor in the very strange US GDP down/Mexican remittances up dynamic?
If the CA Gvt can’t police its distribution of large sums of money so that convicted, databased, and physically incarcerated criminals can’t get it…why not consider the possibility that some significant number of aliens who entered the country illegally…extended their illegalities to unemployment fraud?
No one is saying “all” (so everyone can save their avalanche of personal anecdotes of the “hard working”) but considering the marked decline of economic activity in CA (likely somewhat worse than ntl 3.5%), it takes yeoman PC work/woke to not even contemplate this possibility in light of proven, significant rise in remittances to Mexico.
Plus Bulgaria, Russia, China, Hmong in Vietnam, and Nigeria.
Of course.
There is nothing unique about Mexico.
The only common element is CA gvt’s grotesque inability to properly police the distribution of many billions of dollars.
But hey, even crime is stimulus the Keynesian Kops say…of course it is taking US wealth to stimulate the criminal sector of foreign nations.
Reality check. 95% of the fraud was committed under the federal PUA program for gig workers. And the federal government wanted this money to be paid out, essentially without ID checks. Just pay it. That’s where the fraud occurred.
The PUA program “was thrown into the chaos with little guidance and no preparation and no instant way of verifying even the identity of the claimants – and fraud was also huge, and getting huger with each report.”
“…international and national criminal rings were at work behind the scenes working relentlessly to steal unemployment benefits using sophisticated methods of identity theft…”
The regular state unemployment claims are verified fairly thoroughly, and there was no more than the normal amount of fraud, and much of that gets detected.
https://wolfstreet.com/2021/01/26/california-discloses-ballooning-unemployment-fraud-under-federal-pua-program-pua-fraud-is-a-national-problem/
I will tell you the bulk of the fraud is coming directly from the unemployment office, at least here in California, according to a few workers I know who quit their jobs. They went to the unemployment office and the clerk checked “laid off due to covid 19” no questions asked. They swore up and down they stated nothing of the kind.
Seems strange, because you can’t get benefits if you quit, but these were young 20-something workers who said they didn’t know the rules.
In addition, in California they are back-dating the letters, giving negative days to respond or they will rule in the employee’s favor. You can tell because of the postmark. Furthermore, they will not deny benefits to the employee who quit even after you’ve responded multiple times showing a signed letter of resignation!
Back in April 2020 through October 2020, everyone, I mean everyone was claiming unemployment, getting more than double their pay while working side jobs, mostly construction. These were not just construction workers, lot’s were laid-off restaurant workers, for example. They would make around $2K a week from unemployment and then around $1-2K a week working in home renovation. Well over $10K per month. Imagine a father and two sons: ~$36K per month. That’s $432K per year–tax free!
I’m not exaggerating. I can give specific details. These experiences are first and secondhand.
Absolutely sickeningly disgusting. And here comes more of it.
What a bunch of BS!!!They can not get more than 500$unemployment a week plus 600$ extra in NYC. And hardly anybody can make more than 200$ a day,if they lucky to have that construction job.
Up here in Canada….. I just booked a carpenter I know. He is 40, I’m 65. He works like a fiend and I am no where near as strong as I used to be. I pay him $500 per day, his helper $250. Being a tradesman myself, I believe very strongly that you get what you pay for and that a good days work deserves a decent days pay. That is $62.50 per hour if you do the math. If I hired a middleman contractor it would cost me more than that and the hired carpenter would make $35 per hour. I function as the contractor in this case.
He is also dual ticketed as an electrician. My son is the contractor that pulls the permits but I hire him directly…not often but occasionally.
Local farms in Canada hire approved workers from Mexico, but they have to pay properly and their accommodations are inspected and must be passed by health inspectors. There are no illegals working in visible occupations in Canada, and God help the employer who does hire illegal workers.
I think it is absolutely terrible how migrant workers are exploited. I remember flying (ex pilot) into Stuart Island almost daily, a luxury location mostly owned and run by Americans. One lodge owner, who we used to call Mr. Potato because he owned about a zillion potato farms in WA and Idaho decided to bring in, “some of my Mexicans”. He was promptly turned in/reported and heavily fined. He was a multi millionaire. I guess for some folks it is just never enough. They have to exploit other humans to feel good.
Paulo,
That’s another key difference (among many) between Canadian culture and American culture.
In the US, we have become so accustomed to cheap and relatively good quality workers from South of the Border, mostly illegal, that NOBODY gets turned in for hiring an illegal anymore.
Even the highly publicized crackdowns and the many dramatic ICE (the other one, not engines) raids on illegal immigrant workers during the last administration were targeted AT THE ILLEGALS, not the EMPLOYERS.
The only way to ever solve the illegal immigrant problem would be to severely crack down on the EMPLOYERS. But most of them are rich Republicans who profit from paying less money to employ them, and so the political reality in the USA is that when the Republicans are in control, they leave the employers alone, and when the Democrats are in control, they leave the illegal immigrant workers alone.
Such is the divide in this country.
I was once a registered Republican living in looney nanny state Democrat controlled California. We tried hard to hire American citizen nannies for our young children, two in a row. Both were not good. The first one quit because the work was too hard and then sued us for having allegedly broken her foot while working for us in our house. The second was nice but a total flake, once taking my younger infant daughter out of the house with her so she could go to lunch with a friend, without bothering to tell us (we found out later only because she was so talkative, she let slip that this happened).
The third nanny we had, we hired out of desperation, having few other viable options. She was a 100% illegal immigrant Mexican, only 21 years old, a sweet and pleasant, chubby girl who barely spoke English. The only reason we hired her was at the insistence of my then wife, who said this girl had gotten the strongest recommendation ever from a good friend of hers who was the local food service manager for a string of Wendy’s restaurants (ALL the workers at the Wendy’s in that area were illegal immigrant Mexicans). I was against the hiring, telling her – you’ve got to be kidding, this girl is illegal, she’s only 21!
Well, we hired her. I insisted that she get full car insurance, which we paid for. She turned out to be the BEST NANNY ever! (including the several we churned through when we were in Boston). She cooked, she cleaned house, and played with the kids, took the oldest to school, and they loved her. My younger daughter even once referred to her as “Mommy”, which did not endear her to my ex-wife.
This girl had come from a large family in Mexico, was one of the older children, and was used to taking care of her younger siblings, working hard, and helping around the house.
We offered to help her become a fully legal US citizen, which at the time was common among guilt stricken US employers who wanted to do the right thing for their favored illegal employees, and was also entirely possible, with the hiring of a good immigration lawyer.
She refused, saying her plan was to go back to Mexico one day.
It was clear that she was sent to the US by her family only to provide money for the rest of the family. She would go back every so often to Mexico to bring the money she saved, in cash to her family. On one trip, she got robbed of $3000, an extra large amount she had saved and brought to help pay for a house for her parents. In tears, she explained this to us, and asked us for a loan, which she would work off. We gave her the loan.
Eventually, when the kids got older and were mostly at school all day, my ex-wife did not feel it worth while to keep her fully employed and cut her hours and her pay. So, regretfully she informed us that she could not work for us anymore and went back to working at Wendy’s.
Later, she got married at the local Catholic church to another illegal from Mexico, who was a short order cook. She got pregnant soon after (maybe even before, can’t remember). I went to her wedding. (My ex was at a tenns tournament that day with my oldest daughter).
I still remember her fondly and sometimes wonder what happened to her.
P.S.
Forgot to mention that when we gave her the $3000 loan, my ex showed her how to send the money to Mexico by wire transfer so she wouldn’t have to risk getting robbed again.
That part is germane to the original topic at the top of the page.
It’s set up to create a slave class. It’s really disgusting and helps no one but employers.
employers like Mr. Potato
I’ve never been on one, but sounds like a cruise ship. Lots of non-national workers, working long hours, little pay, and even less say.
Canada doesn’t share a southern border with a third world country. Pretty easy to maintain a country not dependent on illegal immigration when your southern border country with 10 times the population absorbs all of the third world immigration…
And Canada is not “kind” to those who do sneak across.
Tell me about it. In ’06 I was quite rudely tortured for an hour before being turned around at the border after making around 15 trips to BC over prior 43 years. My mistake? Being in a truck with rack, tool box and tools plus my dog, and saying I was going to help a friend near Black Creek build a garage/shop, and then going on up the island for a few weeks to visit other friends. Mostly all from HS.
“poor worker sneaking in”. (I told whole story, elsewhere here.)
Side note: When I went to Toronto ’81 for 2 1/2 weeks to consult on operating/maintaining CO2 lasers and use of them, I found out my ENTIRE TAB (including bar) was completely paid for by Canadian Government for bringing a new technology into Canada. $30/hr US…had I known beforehand, I would have made them double it, and rent me a Corvette like bar buddy had.
Those guys were heat treating jet fan blades, etc, last time one (my bar tab buddy) came down to visit.
If for no other reason than that chart, Mexico should pay political contributions to support Gavin against the recall fight.
At least some of that bump in remittance is due to Gavin and CA giving out stimulus to illegal… errr… undocumented… errr. I mean immigrants. Yeah, strike those last two things, wouldn’t want to be cancelled because of incorrect language use.
We need to make CA great again by making it part of Mexico. ?
Now you have me laughing, proud, pissed off, and scared, just like Mr Hannity always does. Need more beer, and please make it a two hr show.
Somewhere around 6 to 8 trillion dollars was or will be injected into the economy by the central planners in dc. To think that this much money could be allocated without a lot of unintended consequences is foolish. It probably wasn’t that long ago that that was the size of the whole US economy. It’s a lot of money.
And DC wants to jam trillions more through, before they have even spent anywhere near all of the previous two authorizations.
Anyone who isn’t suspicious of that (and the utter inability of DC “brown zone” dwellers to conceive of phase based, feedback informed, staged invt) is on the G’s payroll.
You said it best in the other thread. They’re sociopaths who are doing it because they can. It’s that simple.
Another thing might have added to this phenomenon is that one of the largest banks of Mexico (Banco Azteca if i’m right) was sitting on a pile of dollars which it couldn’t shift, because there was no way to prove it was acquired legally.
Now a new law is coming, or already in place (lovingly called the Banxico Dollar Law), that allows the this bank (and others) to exchange the dollars for pesos at the Mexican Central bank without having to prove the origin of the dollars was legal. Essentially white washing dollars of ‘unknown’ origin.
Some had predicted this would increase the inflow of ‘illegal’ dollars to Mexico. Maybe it materialised already.
That would have a huge effect if some informal interim process is happening on it right now, out of sight. Wouldn’t be surprised.
CRV,
The proposed Banxico Dollar Law has not been passed yet. Mexico’s Central Bank, Treasury Department and even the U.S. Federal Reserve are doing everything they can to ensure it doesn’t become a reality, including issuing stark warnings that any attempt to force the central bank to accept U.S. cash dollars would seriously harm Mexico’s credit rating.
So far, it seems to be working. AMLO recently stated that Banxico’s independence is sacrosanct. But the law has not yet been completely nullified.
Are these remittances taxed at the federal or state level? Money remitted out of the US doesn’t help the US economy.
If the workers are paid in cash, a tax on the remittance money would keep some of it in the US and can pay for some of the government programs
Wolf,
Could the increase in remittances be due to savings from less travel expenses to get the $s in Mexico etc?
Interesting article Nick. Well done.
What about Europe? Guest workers are common in the EU — I’d be curious to see if the same outcome was apparent there too.
A building contractor with a bunch of foreign latinos who couldn’t speak a word on English just finished a monster home 3 houses down from mine. During the 5 month period to tear down the old house and build the new one there were 15 trucks parked on my block to service the construction project. It got so bad you couldn’t even get out of your own driveway. I put up cones and trash cans to block anyone parking in front of my house in the street. They got drunk every Friday night when they finished work. They routinely sped down the block at 30 to 40MPH endangering the lives of pedestrians and children. For some reason , either too cheap or from neighbor complaints they did not have a porta potty on the lot so they went in water bottles and left them all in the trash cans or on their lot. On the last day when the house was completed they threw two urine bottles right on my lot as a payback for blocking the street access of their construction vehicles.
When you bring this trash into your neighborhood, that’s what you can expect to get. Enjoy
Who could believe their hostility when in your own version of events you seem like such a swell and lovely person.
If only human beings developed dispute mechanisms where these things could be hashed out in a dispassionate manner, with outside mediation if accommodations could not be made.
/s
Sounds like your town has a zoning issue. There are two homes being extensively remodeled in my neighborhood by mostly Latino crews, employed by reputable contractors, both sites have porta potties in place. Yes there are trucks parked here but the workers are respectful. You should be talking with your local government, not complaining that the people don’t speak English. Like that matters? People have always immigrated here and within a generation they are essentially like the rest of us.
Not speaking English does matter. Couldn’t communicate with these contractors about their reckless driving habits, parking so as to block neighbors driveways and vision. If you can’t communicate you can’t resolve issues.
Wolf, the legalization and growing of marijuana in the US could be reducing the cash going to Mexico. That may be a factor in the increase in remittances.
Drug trafficking doesn’t count as “remittances.” And the sums are vastly different. Drug traffickers don’t transfer $300 via PayPal to their family in Mexico.
In 5-10 years, Mexican workers will be sending back $100,000 bills with Jeremy Powell’s face on them. That should buy a weeks worth of groceries…as just this week alone we have a budget resolution for $1.9 Trillion in free money, and another $1 Trillion of free money for student loan forgiveness.
$3 Trillion a week might cause some inflation at some point…
Today the house is passing $30 billion for “gym relief”. Hard to keep up with all this free money, looks like we are at $3.2 trillion for the week. Both team red and team blue are seeing who can come up with the most free money schemes this week…and who can blame them when the polls show almost 80% approve of more free money???
Sure you can push a 4 cylinder engine to 1,000 hp, but ultimately something breaks in a “fast and furious” manner. Not sure how or when exactly we break our economy, yet I’m guessing we are already in the tac red zone…
Some sort of black swan event will occur. Nobody knows what it is or when.
Black Swan event
China invades Tiawan
good analogy for this old car racing buff, no matter if SCCA, IMSA, F1, Indy, or Nascar,,, each works with your good stuff,,,
and, in spite of or perhaps because of the clear advances in auto safety initiated and proven on all those tracks,,, WE the Peedons keep killing ourselves on our highways at a far more egregious rate than any other way, so far…
it’s the only reason we went right back to a full sized RAM instead of the lovely small hatchback that got over 45 mpg on the two round trips across USA a few years ago…
and that level of highway challenges really should be at the top of any and every guv mint agenda IMO,,, and God Bless any and all of us willing to drive in USA until then
If it were ACTUAL CASH that was being taken to Mexico in prior years… wouldn’t there be a way to track that in the Central Bank numbers? Granted it would be co-mingled with the drug money and other legitimate users of American currency… but that would be fairly stable… no?
All this discussion leaves me wondering how much of these remittances is really ‘laundered’ narco money?
Remittances come in many millions of small transactions by millions of people. Look at the numbers of transactions and the average amounts remitted as per article: in 2020, there were 119 million transactions (people send money monthly), and the average transaction was $339. That’s not narco stuff. That is millions of workers working hard and sending what little they have left over in small payments to their families.
Generally agree with your opinion. But it appears some illicit drug money, though relatively small, is sent back with remittances. I think we can infer that from below quote:
“The vast majority of illicit funds we see flowing from the United States to Latin America via remittances tend to be laundered proceeds,” US Treasury Department spokesperson Molly Millerwise told ISN Security Watch, adding that “while remittances can be used by bad actors to move money, they are generally not an efficient method for laundering.”
“$40.6 billion”
And other countries:
“it is estimated that more than $148 billion was sent to individuals in other countries in 2017”
https://www.forbes.com/sites/niallmccarthy/2019/04/08/immigrants-in-the-u-s-sent-over-148-billion-to-their-home-countries-in-2017-infographic/
That’s money removed from our local economies, money not increasing revenue, income opportunities for other local businesses or paying local taxes. Money in the local economy stops circulating at the point an outside purchase is made, or the money is sent abroad.
Every dollar spent in a local business multiplies itself throughout the community and strengthens the economic base. This re-circulation of money is a little-known, yet extremely valuable feature of our local economy called the local multiplier effect.
Shows why mostly Hispanic communities are so poor. The money leaves town and never recirculates.
I live in Mexico, got out of the US Tyranny several years back (NDAA 2012 the last straw). It’s been devastating for small businesses and the little people down here. Remittances and government employment have been the only saving grace.
Also, in the towns outside of the cities the people have basically cowed the gun and badge thugs. The thugs do not want to get on the bad side of the locals over masks, etc. if they value a long life. So small businesses are making a come back, but there is much less money coming from the hampered factories.
Mexico and the Mexicans will be just fine–they’re used to economic struggles, and the powers that are are refocusing the economy away from the bankrupt US Tyranny and towards Europe. Americans still in the US Tyranny, soon to be stuck in the US Tyranny, though, have no idea what is really happening to them and what ill wind the future bears. Americans are little experienced or prepared for what is coming.
By the way: Even a thousand fiat-dollars goes far down here. I see more and more fixed income Americans coming that can’t afford to live up there, but live like princes here.