The coronavirus pandemic has stopped working for nearly a month on the California ranch where Lewis earns $ 80 a day picking tomatoes, but that hasn’t stopped him sending $ 800 to the family in Mexico.
The money had traveled away by the time he was back in business in June. His family kept feeding them, funded his father’s hernia, and paid other medical expenses.
Early in the pandemic, experts predicted that migrant workers in the United States such as 32-year-old Louis – who did not want to use his last name for fear of losing his job and being deported – would transfer less money home as the virus beats the US economy. But these predictions did not materialize for workers from Mexico, who sent huge sums of money home, called remittances.
In August, their payments were $ 3.57 billion, according to the Bank of Mexico, the second-highest level on record for one month and 5.3% higher than August 2019. Payments in the first eight months of 2020 ballooned to $ 26.4 billion, up 9.4. % Compared to the same period last year.
The massive sums of money heading south, mostly through electronic transfers, have baffled some economists, who say their original forecasts have diminished the power of “human networks” between Mexican immigrants in the United States and their families back home. They also say the rally was driven by a weak Mexican peso and a US $ 600 per week unemployment benefit that expired at the end of July. Despite this, the increase continued in August.
“We are frankly very surprised at their resilience,” Jonathan Forton, an economist at the Institute of International Finance in Washington, said of the payments.
Money from families in the United States has always been a lifeline in Mexico. Payments are necessary for low-income families to cover expenses such as food and clothing. It also covers medical needs, debt repayment and financing investments such as homes.
In 2019, remittances reached a record $ 36 billion, according to central bank data – more than Mexico achieved that year from foreign tourism or annual oil exports. And they are on their way to get past that this year. Most of the money came from the United States, home to an estimated 37 million people of Mexican descent.
Payments just became more important. Mexico offers no federal unemployment benefits, and workers and companies have received little relief during the pandemic. Between April and June, Mexico’s economy shrank by 17% compared to the same period last year, and in June, a government agency measuring poverty found that 48% of the country was not earning enough to cover a basic basket of food.
For Lewis, the logic was simple: As long as his business owner – a large California fruit and vegetable farmer – kept him in the fields, he would keep sending as much money as possible to Mexico.
Of his family, he said, “more than anything, for the sake of their health.” “So they don’t have to leave (the house) very often.”
He’s sent more than $ 2,000 since April to Tiquanapa, a poor coastal area of 47,000 in Guerrero state where his parents, eight siblings, and his 84-year-old grandmother live. Lewis says his remittances made him more comfortable while he was about 2,300 miles (3,700 kilometers) away during the pandemic.
“With all this pressure, instead of minimizing the reason for sending money, in my case, I tried to help them more,” he said.
In August, the peso lost about 12% of its value against the dollar compared to the same month last year, causing remittances to go further. Pia Orenius, chief economist at the Federal Reserve Bank of Dallas, says this largely explains the strong numbers.
Also, many of the Mexican immigrants sending the money are farm workers, delivery drivers and construction workers – industries that only stopped operating for a while or never stopped during the lockdown.
Orrenius says that’s just part of the story. She said Mexican workers in the United States suffered from restaurant closures and the tourism blow. And federal data shows that the unemployment rate for Hispanics, whether foreign-born or American, stands at more than double pre-epidemic levels.
“They were badly affected,” said Aurineus. But she said government checks and unemployment benefits provided a reserve for those in the country legally, and some of that money might have been sent to Mexico.
Even after these benefits ended, money continued to flow south.
“It talks about the resilience and priorities that these types of families have,” said Forton, an economist at the Institute of International Finance.
The epidemic has had disproportionate economic impacts on other immigrants from Latin America in the U.S. Remittances to Guatemala, Honduras and El Salvador – the economies that depend on them most – declined in the spring before recovering. Mexico’s different experience indicates that its workers in the United States were better insulated from the initial shocks of the pandemic.
One possible reason is that more Mexican immigrants have lived in the United States for more than a decade compared to the total immigrant population, according to the nonprofit Immigration Policy Institute in Washington. Workers with a longer employment history in the United States tend to have more savings, which economists believe Mexican expats used to send money home.
Luis is one of them who says he lived in the US without legal status for 13 years and has never returned to Mexico. In May, when his employer marginalized him and other workers for nearly a month, he said he dived into what he had saved last year to pay his bills and send the money home.
He fears catching the virus as he rides from Fresno to work with two other men and shares showers on the farm. He thinks about what will happen to his family in Tequanapa if he cannot work.
“A moment arrived … I was very nervous, and I couldn’t sleep,” Lewis said.