Tennessee, Georgia: Remittances to Mexico, Latin America decline

With unemployment rates close to or more than nine percent nationwide and in Tennessee and Georgia, it’s no surprise that remittances to Latin America are declining, experts say.

“In the first few months of the (economic) downturn construction jobs were particularly hit hard, and there is where we saw a lot of the job loss happening, particularly for Hispanic Mexican immigrants,” said Mark Hugo Lopez, associate director of the Pew Hispanic Center. “And while we don’t have any data to draw a direct link, there probably is a connection between job lost among Hispanics and the amount they’re able to remit home,” he said.

Money sent to Mexico by Mexicans living abroad declined 18 percent in April compared to the same period last year, the biggest monthly decline on record, The Associated Press reported.

After almost a decade of growth, the Inter-American Development Bank reported that remittances to Latin America and the Caribbean are likely to decline in 2009 for the first time since it started tracking these flows of money in 2000. They have been decreasing since late 2008.

Teresa Martinez, owner of La Guadalupana on Dayton Boulevard, said that for more than a year she has seen a decrease in the number of transactions and the amounts people are sending back to their home countries.

“Before, people would send about $300 per week and I processed about 600 transfers per month,” said Ms. Martinez. “Now people send on average about $50, and I only process between 200 and 300 monthly transactions.”

She said her customers mention the lack of work as one of the main factors.

In 2008, while the overall unemployment rate in the United States was 5.8 percent, for Hispanics it was 7.6 percent. In Tennessee, while it was 6.4 percent overall, it was 7.3 percent for Hispanics.

“What we found (on a survey done last November) was that the share of Latinos sending remittances in 2006 was unchanged in 2008 ... What has changed is the size of the remittances, particularly among foreign-born,” Mr. López said.

“The world is facing its worst economic crisis in recent memory,” Inter-Development Bank President Luis Alberto Moreno said in a news release. “Unemployment is rising in industrialized nations. The climate against immigration is becoming harsher. Even exchange rate fluctuations are playing a larger role than before.”

But Blanca Rangel, who works in her family’s business Carniceria Latina in Dalton, Ga., said they actually have seen increases in the number of money transfers.

“We are processing on average 1,000 transactions (per month), and I think it’s mainly due to the fact that the dollar is very strong right now compared to the Mexican peso,” Ms. Rangel said.

In March, one dollar was worth 15 Mexican pesos, according to x-rates.com.