October 10, 2008

Transnational Economic Crisis Appears To Be Hitting Michoacan

By Mariana Martínez

It is said that when the United States gets the flu Mexico gets pneumonia.

Economic indicators and social analysts are apparently agreeing with popular belief, finding that this recent economic crisis has hit remittances, oil prices and tourism, the three main sources of revenue for Mexico.

According to a recent study published by the Pew Hispanic Center, the economic slowdown has hit migrant homes lowering the median income to 7.3%, while hitting American homes with just a 1.3% decrease in income.

The study, published last week, found that non-citizen immigrant homes are usually people who recently arrived in the country, with a high school diploma or equivalent, and who tend to take low paying jobs in production or construction.

45% of those homes’ breadwinners are undocumented immigrants, most of them Mexican.

“The incomes of non-citizen households have displayed great instability in the past decade—increasing rapidly in economic expansions but falling just as suddenly during economic slowdowns. These fluctuations have been far greater than the average for all U.S. households” the study found.

But this great instability is having deep repercussions in Mexican homes that for decades have been dependent of remittances sent to them by their US relatives.

Such is the case of Michoacan, the Mexican state with the most remittances in Mexico, according to the Mexico Central Bank, who reported Michoacan received 2 billion 262 million dollars last year from remittances from the US.

This is almost equivalent to the federal budget they received that same year.

The lack of service and construction jobs has made thousands of Mexican immigrants come back to Mexico, where they find unemployment and deep economic crisis.

Despite analysts concerns and businesspeople warning massive layoffs due to the “pneumonia,” Job Secretary Javier Alarcón insists Mexico has not stopped creating jobs and has managed to “grow.”

He even dared to say that in the next months, between the 200 and 380 thousand Mexican immigrants who might be coming back to Mexico will “find a job with no problem.”

Meanwhile, the Michoacan state officials have already asked the federal government for a larger budget in order to sustain agricultural projects, face the crisis created because of the lack of remittances and the wave of immigrants who might be going back to their home state.

Return to the Frontpage