Workers still sending big bucks back to Mexico amid pandemic
PHOENIX — The coronavirus pandemic stopped work for nearly a month at the California farm where Luis earns $80 a day picking tomatoes, but that didn’t stop him from sending $800 to family in Mexico.
The money had traveled far by the time he was back at work in June. It kept his family fed, funded his father’s hernia operation and paid for other medical expenses.
Early in the pandemic, experts predicted that migrant workers in the U.S. like 32-year-old Luis — who didn’t want his last name used for fear of losing his job and being deported — would wire home less money as the virus hammered the American economy.
But those predictions didn’t materialize for workers from Mexico, who have sent home huge amounts of money, called remittances.
In August, their payments amounted to $3.57 billion, according to the Bank of Mexico, the second-highest level on record for a single month and 5.3% above August 2019. Payments in the first eight months of 2020 ballooned to $26.4 billion, up 9.4% compared with the same period last year.
The enormous sums of money moving south, most through electronic transfers, have puzzled some economists, who say their original forecasts underestimated the strength of “human networks” between Mexican migrants in the U.S. and their families back home. They also say the rise has been driven by a weakened Mexican peso and the $600-a-week U.S. unemployment benefit that expired at the end of July. Despite that, the surge continued in August.
“We are honestly very surprised at their resilience,” Jonathan Fortun, an economist at the Institute of International Finance in Washington, said about the payments.
Money coming from families in the U.S. has long been a lifeline in Mexico. The payments are critical to low-income families for expenses like food and clothing. They also cover medical needs, pay off debts and fund investments like homes.
In 2019, remittances reached a record $36 billion, according to central bank data — more than what Mexico earned that year from foreign tourism or annual petroleum exports. And they’re on pace to exceed that this year. Most of the money came from the U.S., home to an estimated 37 million people of Mexican origin.
The payments have only become more important. Mexico provides no federal jobless benefits and workers and businesses have received little relief during the pandemic. Between April and June, Mexico’s economy contracted by 17% compared with the same period last year, and in June, a government agency that measures poverty found that 48% of the country wasn’t earning enough to cover a basic basket of food.
For Luis, the logic was simple: As long as his employer — a large California fruit and vegetable grower — kept him in the fields, he would continue sending as much money as he could to Mexico.
“More than anything, for their health,” he said of his family.