Mexicans Sending Less Money Home

The amount of money sent home by Mexican migrants declined 2.2 percent during the first six months of 2008, showing what analysts said are the effects of the U.S. economic downturn and the nationwide crackdown on illegal immigrants.

The funds transmitted, known as familial remittances, totaled $11.6 billion during the first six months of the year, compared with $11.9 billion during the same period last year, according to numbers released yesterday by Mexico's central bank.

Remittances are the second-largest source of foreign income for the country, following oil exports. Experts think that the decline could help push more Mexicans deeper into poverty as families there face rising prices on basic necessities.

"Families are receiving less money at the same time that the cost of food and the cost of fuel has risen," said Robert Meins, a remittances specialist with the Inter-American Development Bank in Washington. "So the money that is being sent is going a heck of a lot less far, so the impact is far more negative than the numbers actually portray."

Helped by increased migration and lower money-transfer costs, remittances to Mexico had soared over the past decade, reaching a high in 2007 of just under $24 billion, more than 5 1/2 times than the amount sent 10 years earlier. Experts who study these money flows began noticing a slowdown early this year.

The U.S. economy has played a role. The unemployment rate among Hispanics has risen faster than that of the entire U.S. population as a slumping construction sector has shed hundreds of thousands of jobs. The unemployment rate among all Hispanics in the United States was 7.7 percent in June, compared with the overall unemployment rate of 5.5 percent, according to the U.S. Labor Department.

In April, the Inter-American Development Bank published a survey of 5,000 Hispanic immigrants that found 50 percent of respondents were regularly sending money home to their families. That was down from 73 percent two years ago, when a similar survey was conducted.

Some researchers attributed the decline to general unease among immigrants stemming from the crackdown on illegal immigrants by federal authorities and some states.

"In times of uncertainty, people won't send as much money back, they will hoard the money," Meins said. "A lot of people are moving from one state to the next state, and in that period when they move, they have higher costs and they won't send as much money home."

Some experts think that the Mexican central bank's numbers may reflect a shift by immigrants to less formal channels for transferring money home as immigration enforcement has stepped up.

Dilip Ratha, an economist with the World Bank, said that immigrants adopted more formal ways of sending money after the Sept. 11, 2001, terrorist attacks, using bank transfers, money orders, personal checks and other means that can be recorded by Mexico's central bank. With the crackdown on illegal immigrants, workers may be returning to more informal methods such as using human couriers or travel agencies, he said.

"What I feel is that the actual remittances are probably still continuing to rise, it is just that the officially recorded data are showing a decline," Ratha said. "Mexican workers are not using as visible remittance channels as before."

Javier Martinez, 46, a construction worker who lives in Manassas, said that a year ago he was able to send up to $1,500 a month to his wife and two children in the Mexican state of Zacatecas. Now he can only send about $500 a month. His work laying tiles has slowed down, and he can no longer find renters for the three houses he owns as immigrants have left Prince William County because of the ongoing crackdown on illegal immigrants.

"Right now, with the loss of work, things have really gone bad," he said. "The laws also affect me, even though I have my papers."