As People Lose Their Jobs, They’re Not Sending Money To Their Families Back Home And It’s Having A Major Impact On Local Communities
As the coronavirus continues its march around the world, economies from Brazil and Mexico to the United States and Colombia have been hit hard. The measures taken by governments to save lives have stalled economies, and are in the process of delivering a global recession. Economic contagion is now spreading as fast as the disease itself.
You don’t have to look any further than the unemployment numbers recorded each week in the United States. They’re at staggering, record-breaking levels. This huge impact on the U.S. economy, and its workers, is having an outsized impact on economies across Latin America as migrants aren’t able to send remittances back home to their families.
As the economic repercussions of the pandemic continue to grow, global remittances from migrants are being hit hard.
The pandemic is hitting jobs and wages in a variety of sectors of the global economy – including economies (like the U.S.) that depend on migrants. A global economic turndown will mean a slowdown in the amount of money these workers send back home to their families and will be crucial in spreading the economic contagion from richer countries to poorer ones.
For 2020, the International Monetary Fund is now predicting that the global economy will shrink by 3% – that’s a difference of trillions of dollars – and it will have trickle down effects on the world’s most vulnerable people.
Undocumented communities are especially vulnerable during economic downturns.
Many of those who send remittances often work in the service industry and have been let go or furloughed from their jobs in hotels, restaurants or cleaning companies, without pay. Meanwhile, those who are undocumented cannot apply for unemployment, even though they likely contributed to state unemployment funds and paid taxes.
Even the recent federal stimulus bill – a $2 trillion dollar bill meant to dampen the impact of the Coronavirus pandemic – specifically left out undocumented migrants. It prevents even tax-paying migrants from receiving any federal aid. However, California has partnered with non-profits to become the first state to offer $500 in assistance to undocumented residents.
Remittances are crucial to the economies of poorer countries and help support millions of families.
Remittances shelter a large number of poor and vulnerable households, underpinning the survival strategies of over 1 billion people. In 2019, an estimated 200 million people in the global migrant workforce sent home US$715 billion. Of this, it’s estimated US$551 billion supported up to 800 million households living in low- and middle-income countries.
And these families aren’t spending this money on cars and new computers. They’re spending it on everyday subsistence needs including food, medicines, and education. The World Bank projects that within five years, remittances will outstrip overseas aid and foreign direct investment combined, reflecting the extent to which global financial flows have been reshaped by migration.
In fact, global remittances hit record highs in 2018.
According to the World Bank, global remittances reached a record high in 2018, the last year for which figures are available. The flow of money to Latin America and the Caribbean grew by 10 percent to $88 billion in 2018, mostly due to the strong U.S. economy, where most of the money originates.
In many countries, remittances account for a significant portion of their gross domestic product. In Nicaragua and Guatemala they account for around 12 percent, and in El Salvador and Honduras, around 20 percent.
Mexico’s president, Andrés Manuel López Obrador, asked Mexicans in the United States not to stop supporting their relatives back home. He said February set a record in remittances to Mexico.
“Tell your countrymen to not stop sending help to their families in Mexico, who are also going through a difficult situation,” he said at a recent news conference.
Many migrants to the U.S. feel a strong responsibility to send back as much as they can to help their families back home.
Many immigrants to the U.S. are worried about not being able to send money to their parents, children, or abuelos back home. Many relatives depend on those who have emigrated to the U.S. to pay for electricity, food, medicine, and doctor’s visits. But with many losing their own jobs – money is just too tight for many.
In an interview with NBC News, Lesbia Granados – from Honduras – said what many can relate to, “I am everything to my parents, and it’s my responsibility to take care of them, after they did so much for me.”
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