As U.S. economy sours, Mexicans send less money home

Money woes flow across border
As U.S. economy sours, Mexicans send less money home
By Jay Root and Constanza Morales, McClatchy-Tribune News Service

Petra Chavolla tends to her cattle that she raises in an effort to make financial ends meet in Maravillas, Michoacan. Residents of Ucacuaro, Michoacan are feeling the financial crunch of the slow economy in the United States. A large majority of the residents in the small mexican farming village have relatives working in the U.S. and they rely on the money sent by relatives working in the U.S.

UCACUARO, Mexico | More than a decade has passed since Petra Chavolla's children began leaving. Like most kids from this impoverished patch of the Mexican state of Michoacan, they followed friends and relatives to Texas, where jobs and a better future awaited.

But she knew times had changed this past Mother's Day. Instead of the extra cash she almost always received from her children, she got a phone call. Hit by hard economic times, rising gas and food prices, and a dwindling number of jobs for undocumented workers, Chavolla's children in Fort Worth, Texas, said they couldn't scrape together any extra money this time.

"I could tell they wanted to cry," said Chavolla, 62, fighting back tears herself. "I told them, 'If you can't, well, you just can't.' "

The challenges the Chavollas face tell of a looming financial crisis that reaches across Mexico, where families who depend on money sent from relatives in the United States - called remittances - are opening up lighter envelopes or waiting longer to get them.

Remittances to Mexico hit $23.7 billion in 2006, more than double the amount reported in 2002 and representing the country's second-largest source of foreign income, behind oil.

But after years of double-digit increases, the cash sent back home dropped 2.9 percent in the first quarter of this year. The Bank of Mexico, which tracks the international transfers, predicts that remittances will register a 1.5 percent decline by the end of this year. That would be the first annual decrease since modern recordkeeping began in 1995.

Jesus Cervantes, the director of statistics for the central bank, attributed the drop to reduced migration to the U.S., a crackdown on illegal laborers there and rising unemployment among those in the U.S., where construction jobs - which employ nearly a quarter of Mexican migrants - are in short supply.

Those problems are compounded by what Mexicans living in the United States say is a run-up in prices, led by increases in gasoline.

Graciela Mendoza works in a mattress factory in Fort Worth, making $7.75 an hour. She said she tried to send $300 every other week to her mother and 14-year-old son, but that often she could afford to send only $150.

Mendoza said the expenses of raising her four children had doubled in the past year while her salary had remained the same.

"These are hard times for everybody, but it is worse for us because we have the responsibility to take care of people that don't have anything else but our money to survive," Mendoza said.

Michoacan, the south-central state where Chavolla lives, receives more remittances than any other Mexican state - more than $500 million in the first three months of this year. But that's down 3 percent, about the national average, compared with the same period last year.

In the town of Zamora, where an Elektra store handles Western Union wire transfers from the U.S., manager Manuel Basurto said it had gotten so bad that he'd seen families sending cash to struggling relatives in the United States.

"It's only a handful of cases, but in the three years I've been working here, I've never seen that," he said.

He once had 10 people a day coming to pick up money from the U.S., but he said that he now saw about seven on average.

In tiny Ucacuaro, a farming village of some 600 residents about two hours east of Guadalajara, it's next to impossible to find anybody who doesn't rely on money sent from the U.S.

Some of the houses, built with the proceeds of migrant labor, look as though they've been plucked from an American suburb and dropped onto well-tended yards.

But many are empty, cared for by elderly couples who find themselves with no children left in Mexico. If the kids aren't U.S. residents or citizens, chances are good that they haven't been home in years.

Chavolla, who lives in nearby Maravillas, hasn't seen her youngest son since he went to Texas seven years ago at age 17. Two other brothers left 11 years ago. With no guarantee of getting back across the heavily patrolled U.S. border, they haven't been back since.

It's a similar story at the Ucacuaro home of Salvador and Juana Pulido. All five of the Pulido children live and work in Fort Worth. None has been back home in years.

Martin Valdez, who owns a tortilla shop in Ucacuaro, said he is seeing a growing number of young Mexicans returning to the village. Some have been deported. Others couldn't find decent jobs in the U.S. Others found the search for work just wasn't worth the hassle.

"Personally, I know 10 people that haven't gone or ... came back from the States," said Valdez, who graduated from Arlington Heights High School in Fort Worth. "A lot of them prefer to stay here and just tough it out here in Mexico."

If the number of returnees grows dramatically, that could be a problem for Mexico, said Rodolfo Garcia Zamora, an economist and immigration expert at the Autonomous University of Zacatecas.

"The Mexican economy is not prepared for a massive return of immigrants from the United States," Garcia said. "The government, on both the state and federal level, has not taken this problem seriously. In terms of social and political stability, it would be extremely delicate."

The remittance slowdown is sending economic shockwaves throughout Ucacuaro and surrounding villages. Salvador and Juana Pulido estimate that remittances from Texas cover half the costs of his small farming operation, now hit with higher prices for feed and fertilizer.

"I couldn't survive doing this without the help from my children," Salvador Pulido said.

Last year, after saving for years, he said, his kids sent him about $37,000 to buy a Case tractor. But in recent months, as their children struggle themselves, the Pulidos have been making fewer trips to the bank.

"Before, they would get together and send us money every month," Juana Pulido said. "Now it's more like every two months."

Valdez said business at his tortilla shop was way down.

"People that were buying three kilos are buying two. The people that were buying two kilos are buying one kilo," Valdez said. "You know, everybody is cutting down."
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