Money Trickles North as Mexicans Help Relatives

Mexicans immigrants in the US have long sent money back to their families, providing a vital source of capital to a country where almost half of the population lives in poverty. The global recession, and the consequent lay-offs has left many Mexican immigrants unemployed, leading to a 13.4 percent drop in remittances. Mexico is suffering too. But Mexican families are now combining funds to support their struggling relatives in the US. The rise in these so-called “reverse remittances,” though hard to capture in statistics, appears to be a new trend. Moreover, it reveals the family-oriented nature of immigration: members often combine funds to support an individual's journey to the US in hopes that the person's success may reap family-wide benefits. Now, with an uncertain future, families – not unlike investors in many capital-starved banks – are forced to infuse more cash to sustain their members’ livelihoods away from home. Though these families are generally cash-poor, the cost of living in Mexico remains far lower in relative terms to that of the US. But this does force Mexican families to live closer to the margins in order to sacrifice for their relatives' pursuit of the “American dream.” The nightmare is that the US now appears to be sucking up capital from every source: not only through greater and greater Treasury issuances, but also from the world’s poor. – YaleGlobal