Accessibility links

Report Shows Mexican Workers in US Sent Home $17 Billion in 2004

Mexican workers, legally and illegally in the United States, are sending home record amounts of dollars to support their families and the stagnant Mexican economy. Mexico's Finance Minister is stressing that a massive wage disparity has to be bridged to stop the labor and the brain drain.

Figures released this week by the Bank of Mexico show that Mexican migrants sent home nearly $17 billion during 2004, a 24 percent increase over the previous year. That is a larger sum than all of Mexico's tourism earnings and is the country's second-ranked revenue source, trailing petroleum proceeds.

Mexican officials say it is becoming easier to accurately track the sums involved because more of the workers are wiring the cash via courier companies from United States.

U.S. and Mexican officials estimate approximately half of the 10 million Mexicans living in the United States are undocumented. Their numbers are rapidly increasing because many of those who reach U.S. soil illegally are not prepared to risk slipping back across a border that has been more heavily guarded since the 9/11 terrorist attacks in 2001.

HSBC Chief Economist in Mexico Jonathan Heath says many Mexicans, especially the young, cannot make ends meet in their own country and do not see any long-term prospects. He explains that for these people the risks and initial hardships are great, but they are prepared to emigrate for their future.

"These people are carrying out jobs that in the United States most Americans are not interested in, and they are making much bigger wages than they are here,” he said. “And at the end of the day, even though they do not have the papers, they probably end up having more security in the U.S. illegal market than they do in the formal market here in Mexico."

Mexican President Vicente Fox has been unsuccessful in pushing labor and fiscal reforms, due to a hostile Congress that is dominated by opposition political parties. Observers say this is adding to the economic stagnation Mexico is suffering.

Finance Minister Francisco Gil Diaz says that to stem the hemorrhaging of labor, the Mexican work environment has to offer more competitive salaries, but this can only be done if it is linked to productivity, growth, and economic realism.

"Well it is obvious that in the first place, the wage differential for the same skills is huge, and that is what we have to close-that enormous gap between the wages in the States and the wages in Mexico," he said.

Meanwhile, the economic stagnation looks set to worsen.

Pedro Javier Gonzalez who is the Director of the Mexican Institute of Political Studies says that with a presidential election in Mexico approaching, the possibility or opportunity for any practical legislative progress is limited.

"I do not think President Fox will have a good chance, because this year is an electoral year,” he said. “During this a lot of things are going to be defined that are related to the presidential election next year."

Given this scenario, President Fox is trying to persuade the re-elected Bush administration to create a Temporary Migrant Worker program to cater to the thousands of Mexicans pouring north across the border into the United States. Last year President Bush presented such a plan to Congress, which has not approved the proposal.