See Snapshots archive.
Snapshot for July 9, 2008.
As U.S. construction slows, remittances to families in Mexico decline
by Emily Garr
New data on remittance flows—the earnings migrant workers send home to their families—confirm that the rest of the world is far from immune to the weakening U.S. economy. From 2000 to 2006, the amount of remittances grew significantly year after year, helping to support workers’ families abroad. That growth leveled off in 2007, and now it has actually begun to decline: January through May of 2008 has seen a decline of $668.28 million compared to the same period in 2007. In May alone Mexican families received $171.3 million less than the previous year (see chart below). This is a troubling indicator for Mexico—the largest recipient of U.S. remittances in Latin America, with a total inflow equivalent to 2.8% of its gross domestic product.
More remittances are sent to Mexico in May than any other month of the year, driven in part by the number of immigrants (a majority of them Mexican) working in construction. With the deflating housing bubble and the decline of construction jobs in the first quarter of 2008, the unemployment rate of Hispanic immigrants rose to 7.5%, and Hispanic construction workers now earn less than they did in the first quarter of 2006.1 The continuing economic slowdown in the United States will undoubtedly affect Mexicans on both sides of the border.
1. Estimates derived by the Pew Hispanic Center, based on BLS data. See Kochhar (2008), “Latino Labor Report 2008: Construction Reverses Job Growth for Latinos.”