Mexico’s remittances pass $50 billion, surge during pandemic

Jan 25, 2022, 10:06 PM | Updated: 10:23 pm
Residents gather on a street corner next to a home built with money earned in the United States, in...

Residents gather on a street corner next to a home built with money earned in the United States, in the Puerpecha Indigenous community of Comachuen, Michoacan state, Mexico, Wednesday, Jan. 19, 2022. Mexico’s remittances, the money migrants send home to their relatives, have soared in the past two years, and are now expected to top $50 billion for the first time in 2021, surpassing almost all other sources of foreign income. (AP Photo/Fernando Llano)

(AP Photo/Fernando Llano)

COMACHUEN, Mexico (AP) — Mexico’s remittances — the money migrants send home to their relatives — have soared in the past two years, and are now expected to top $50 billion for the first time once 2021’s figures are added up. That would surpass almost all other sources of Mexico’s foreign income.

But as happy as the Mexican government is about the news — it calls the migrants “heroes” — the boom raises questions: Will Mexicans always have to emigrate? And is it sustainable, or just blip fueled in part by U.S. government pandemic support payments?

In many rural places such as Comachuen, Michoacan, every store, business and family depends on remittances.

“Without these remittances that migrants send back to their families here in Comachuen, the town would have no life,” said Porfirio Gabriel, who has spent nearly 13 years working on farms in the United States and now recruits and supervises people to go north.

Remittances as a percentage of Mexico’s GDP have almost doubled over the past decade, growing from 2% of GDP in 2010 to 3.8% in 2020, according to the government. Between 2010 and 2020, the percentage of households in Mexico receiving remittances grew from 3.6% to 5.1%.

For the first 11 months of 2021, remittances grew by almost 27%. Mexico is now the third largest receiver of remittances in the world, behind only India and China, and Mexico now accounts for about 6.1% of world remittances, according to a government report.

On one hand, the spike was simply a matter of need, caused in part by the coronavirus pandemic. Mexico’s GDP shrank 8.5% in 2020, and while the economy recouped about 4.7% of that loss in the first three quarters of 2021, growth appears to have slowed and inflation spiked in the last quarter.

“When a Mexican family suffers illness or their household suffers damage, they receive more. … Why? Because, basically, they ask for help, and that is what I think happened here last year,” said Agustín Escobar, a professor at Mexico’s Center for Research and Higher Education in Social Anthropology.

Ironically, part of that growth may have been fueled by a temporary decrease several years ago in the number of new Mexican migrants heading to the United States and a decline in the relative percentage of migrants without proper documents.

Escobar said that means established migrants face less wage competition from new, young, undocumented arrivals.

“But how much it can continue to improve in the future is an open question,” he added.

And the fact that a smaller percentage of Mexican migrants don’t have proper documents than before means more qualified for U.S. pandemic support payments in 2020.

A report by the Liberty Street Economics blog from the Federal Reserve Bank of New York said, “We find that about $24 billion went to U.S. residents born in Mexico, Central America, and the Dominican Republic in April through September” of 2020 when pandemic support payments began to flow under the CARES Act.

While people in Comachuen report using their money to educate their children and build up businesses, research shows the vast majority of remittances are used for subsistence needs — buying more food or medicine, or much-needed household appliances like refrigerators that will save families on food costs in the long run.

There is also a strange dichotomy: The largest flows of remittances go to Mexico’s most violence-plagued states, like Guanajuato, Zacatecas, Jalisco and Michoacan.

Escobar said migration and crime sometimes go hand in hand. Those who receive funds from abroad become targets for criminals, creating fear that drives more to emigrate.

“Families in Michoacan are trying to hide that they are receiving remittances. They try to go to a bank branch that isn’t near their house, and not show it off, because these families become a target for kidnappings, to get the money,” Escobar said.

Raul Delgado, who heads the development studies unit at the University of Zacatecas, sees a “vicious, perverse cycle” in tougher U.S. border restrictions. They make immigrant smugglers more necessary, which in turn empowers criminal gangs, who in turn prey on local people, who have to leave their home communities because of the violence.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


FILE - In this July 22, 2015, file photo, Corrine Brown, D-Fla., speaks at a hearing on Capitol Hil...
Associated Press

Former US Rep. Corrine Brown pleads guilty in fraud case

A criminal case against former U.S. Rep. Corrine Brown, one of the first Black representatives elected to Congress from Florida after Reconstruction, ended Wednesday with her guilty plea to a tax charge in a charity fraud case. Brown, 75, had been convicted before in 2017 of 18 counts and served more than two years of […]
12 hours ago
FILE- A memorial honors Sierra Jenkins, an education reporter for The Virginian-Pilot and Daily Pre...
Associated Press

Police: Man charged in fatal shooting outside Virginia bar

NORFOLK, Va. (AP) — A Virginia man has been charged in a March shooting that killed a newspaper reporter and two other young bystanders when a fight broke out at closing time outside a Norfolk bar, police announced Wednesday. One of the victims was Sierra Jenkins, 25, of Norfolk, a reporter for the region’s daily […]
12 hours ago
Florida Gov. Ron DeSantis signs the Parental Rights in Education bill at Classical Preparatory scho...
Associated Press

Gay student says school stopping run for student leadership

BUNNELL, Fla. (AP) — A 17-year-old gay student who was suspended for leading protests at his high school against Florida’s so-called Don’t Say Gay legislation says school administrators are now stopping him from running for senior class president. Because of the disciplinary infractions he received for leading the protests at Flagler Palm Coast High School […]
12 hours ago
These May 12, 2022, photos of a Wanted poster provided by the Texas Department of Criminal Justice ...
Associated Press

Texas inmate who escaped bus got out of restraints, cage

CENTERVILLE, Texas (AP) — A convicted murderer who escaped from a transport bus last week got out of his restraints and a caged area before stabbing the driver, and he is still on the run Wednesday, authorities said. Gonzalo Lopez, 46, who was serving a life sentence, was being transported to a medical appointment on […]
12 hours ago
FILE - Then-New York Mayor Bill de Blasio delivers remarks in Times Square on April 12, 2021, in Ne...
Associated Press

Former NYC Mayor Bill de Blasio exploring run for US House

NEW YORK (AP) — Former New York City Mayor Bill de Blasio says he’s considering a run for Congress after a legal battle over the state’s political maps opened up a seat in Brooklyn. The two-term Democrat, who left office at the end of 2021, said Wednesday that he’s formed an exploratory committee for New […]
12 hours ago
US Treasury Secretary Janet Yellen, right, is welcomed by President of the EU Commission Ursula von...
Associated Press

Biden’s burdens grow: Sagging global economy adds to US woes

WASHINGTON (AP) — As President Joe Biden embarks for Asia on Thursday, he’s facing a new risk at home for the economy and his Democratic Party: a global slowdown caused by Russia’s invasion of Ukraine and the pandemic shutting down Chinese cities and factories. The world economy can’t cast U.S. ballots. But it’s a hidden […]
12 hours ago

Sponsored Articles

Canvas Annuity

The secret to guaranteed retirement income

Annuities aren’t really a secret, but they are so misunderstood that they might as well be. Once you understand what an annuity is and how it can benefit you, you could decide this “secret” is the perfect supplement to your retirement plan.

In Sonoran heat, prevent costly AC repairs with an annual tune-up

As winter has finally passed and the days are becoming warmer, now is a good time to be sure your AC unit is polished and ready to run.
Dr. Richard Carmona

COVID-19 shots continue long tradition of vaccines protecting public health

You want to feel safe. You want your family to be safe. Are vaccines safe? The simple and important answer is: Oh my yes!
Mexico’s remittances pass $50 billion, surge during pandemic