Economy
Tough Times For Mexican Immigrants
Jesse Bogan, 07.02.09, 09:15 PM EDT
Hurt disproportionately by job losses, remittances home are plunging.

HOUSTON -- In light of unsettling unemployment figures released Thursday, consider buying one of the estimated 8 million illegal immigrants in the U.S. a beer this Fourth of July.

The effects of 9.5% unemployment would be worse without them, says Gordon Hanson, director of the Center on Pacific Economies at the University of California San Diego, describing illegal immigrants as "shock absorbers."

"The pronounced cyclicality of the employment of immigrants means less pronounced cyclicality in the employment of native workers," Hanson says.

An estimated 200,000 to 600,000 illegal immigrants have lost their jobs in the past two years, perhaps 60% of them from Mexico.

"Those are the workers who are easiest to hire; those are the workers who are easiest to fire," he says. "Because the immigrants account for a disproportionate share of the increase in employment on the upswing, in part because they are concentrated in construction, that means there is a weaker fall in demand for labor for everyone else during the downswing."

The kicker? "For those low-skilled workers who have seen wage declines as a result of illegal immigration, they are not better off, but the rest of us very well may be."

With the job market for immigrants weak, fewer people are crossing the Southern border of the U.S.; it's also slashing into the billions of dollars sent home.

In the first five months of 2009, Mexicans working abroad sent $9.2 billion home, down from $10.3 billion for the same period in 2008, Mexico's central bank reported Wednesday. May and April were particularly lean, with the value of remittances dropping 20% and 19%, respectively, compared to the same months last year, reportedly the steepest fall since the bank started keeping track of the numbers in 1995.

At a Houston food shop, a 36-year-old cook from Mexico told Forbes that job losses, cutbacks in hours and fears of being fired are reasons why Mexicans, one of the largest immigrant groups in the U.S., are sending less money home.

Speaking from behind a sandwich counter, the mother of three, who is a cook at her first job and a supervisor of 15 janitors at her second, said her hours have been cut back about 10% amid a feeling of uncertainty. Members of the cleaning crew she manages, many of whom make about $7.50 an hour, are worried about keeping their part-time jobs. The bright side, however, is that they have jobs, ones that pay more per hour than some at home pay in a day.

To anyone considering the trip north, she warns, "I don't recommend that more people come."

In Mexico, entire towns of men have immigrated to support their families. They send a serious amount of money home: Between 2004 and 2005, Mexicans abroad sent home $116 billion. Remittances to Mexico average about $350 per transfer.

There was a 3.6% decline in remittances to 2008 to $25 billion, the first drop in more than a decade.

There appear to be fewer people crossing the border. The U.S. Border Patrol reports that apprehensions along the Southern border were down 27% in May compared to the same month last year. Over the first five months of the year, apprehensions fell 41% to 270,368 people compared with the same period a year ago.

The border patrol, which has bolstered its ranks from 9,000 agents to 19,000 agents since 2000, believes it's also deterring more people from crossing.

"Hopefully, when they see all that technology and personnel, they'll think it's not worth it," says Steven Cribby, a Washington, D.C.-based spokesman for the patrol.

http://www.forbes.com/2009/07/02/illega ... ances.html