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Flow of dollars home to Latin America dwindles

By David Adams, Times Latin America Correspondent
In print: Monday, July 28, 2008

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BRANDON — Friday afternoon used to be one of the busiest times of the week for Andrea Samudio.

When construction jobs were plentiful, migrant workers with fat paychecks would fill the lobby of her money transfer business in Brandon, eager to send their earnings home to family in Mexico and other Latin American countries.

"Some people sent money before every week. Now they only send money once a month," said Samudio at Dolex Dollar Express.

Friday afternoon, Samudio sat behind the counter and glass partition playing with her toddler, an empty lobby before her.

The souring American economy has hit workers hard everywhere, but now it's reaching across the border. The depth of the downturn is evident at money transfer companies like Dolex, which report a steep fall in remittances.

A few years ago, some families sent between $600 and $1,000 a week, Samudio said. Now they only send about $100 a week and a lucky few send $1,000 a month, she said. Mexican workers had made up the majority of her clientele, but now their share has dropped to about 20 to 30 percent, she said.

Spectacular growth in recent years had turned remittances from workers living in the United States into Mexico's second-biggest source of foreign currency, surging more than 15 percent in 2006 to a record $23-billion. Last year the flow of dollars shrank for the first time in years, dropping $600-million.

When work was plentiful, Oscar Martinez never had to wait long by the side of the road to get picked up as a day laborer. But today's economic hard times mean that Martinez, a 32-year-old Nicaraguan, barely makes enough to scrape by, let alone send money home to his family.

"There's no work anymore," he said, sitting on a plastic milk crate outside a lumber store in Hialeah, South Florida's most Hispanic city and home to many working-class immigrants.

Martinez used to send $340 a month to his mother and his wife back home. He still does the best he can to help them look after his 8-year-old daughter. But last month he managed only $200.

Around Tampa Bay, Mexican construction workers who used to take home between $700 and $1,000 a week are now earning half that working at fast-food stores and cutting lawns. Reduced incomes mean less money to send to relatives in Mexico, and less to spend locally.

In Clearwater, a magnet for Mexican immigrants from Hidalgo state since the mid 1980s, local businesses are feeling the impact.

"Right now it's just about trying to stay in business," said Leonardo Rodriguez, 41, president of the Mexican Council of Tampa Bay and the owner of two Los Amigos food markets in Dunedin and Largo. "In our community, business is down 35 to 40 percent."

Clearwater's Mexican-born auditor, Robin Gomez, hears numerous stories of less money being sent home. This month he visited Pachuca, Mexico, where his uncle owns a pharmacy that also handles distribution of money transfers. "He was telling me how he used to get thousands of remittances. Now it's down about 50 percent."

Immigrant workers are also feeling the effect of the weakening dollar. For Mexicans this means that the $7.3-billion sent home in the first four months of the year lost about $366-million in value for Mexican recipients.

The falling remittances are only partly due to lost wages, experts say. A hostile domestic immigration debate and tougher law enforcement activity are discouraging would-be migrant workers. More immigrants are switching to Europe to look for jobs.

"The declining economic conditions have removed incentives for migration to the U.S. and directed migration flows to other countries, Spain for example," said Kai Schmitz, a vice president at Microfinance International Corp., a money transfer processing company in Washington.

Finding work is so hard that many immigrants are giving up on the U.S. job market and going home. Buses leave south and central Florida every day for the border. "We used to sell five or six tickets a month. Now they are sold out," said Rodriguez, who is from a small village near the city of Ixmiquilpan in Hidalgo.

"Sometimes you have to wait three or four days to find a seat."

Oscar Martinez says he is saving up to go home. Back in Nicaragua he worked in the rice fields, earning about $100 a month. While the pay wasn't so good, hard times in Miami have made him homesick. "Even though I wasn't earning a lot, I felt better there," he said.

The ripple effect is beginning to be felt in Mexico, too, especially in those communities most dependent on remittances. "It's causing economic chaos back there," Rodriguez said. "Ixmiquilpan is a city in paralysis."

David Adams can be reached at dadams@sptimes.com.