Remittances to Latin America on the rise
2011 saw a rise in the amount of money migrant workers in the U.S. send back home to countries like Mexico and El Salvador.
Steve Chiotakis: More people got in line for first time unemployment checks last week. The government said this morning weekly jobless claims rose to 399,000; that's up by more than 20,000 for the week. Jobless claims had been on the decline over the past month or so, and with the unemployment rate going down, we have seen an uptick of Latino immigrant workers in this country who are sending money back home.
Manuel Orozco is an expert on remittances, as they're called, and he's a senior associate at the Inter-American Dialogue in Washington. Manuel, thanks for being with us.
Manuel Orozco: Hi.
Chiotakis: Now remittances were way down at the height of the recession, but it seems like they may be picking up a little?
Orozco: Yes, there is a slight recovery -- somewhere around an 8 percent increase from 2010 to 2011. A lot of it is associated to the declining unemployment in the U.S. economy.
Chiotakis: Declining unemployment -- so more people who are working here in the states are sending money back home to Mexico?
Orozco: Yes, the total volume that we estimated came to Latin America in 2011 amounts to about $68 billion, which is a similar amount to 2007.
Chiotakis: You said that this is certainly a sign about unemployment -- what does it say to you about the overall U.S. economy?
Orozco: I think there are more hiring for immigrants. It suggests that the economy -- especially small businesses -- are relying on foreign labor to increase their productivity. And increases in construction, for example, in some parts of the U.S. where foreign labor is in demand.
Chiotakis: You mention $68 billion. What does that flow of money mean for an economies such as Mexico, and those Latin American countries?
Orozco: Well, it means that you have also an increase in the purchasing power of people that receive remittances. For example, a country like El Salvador, with a population of six million people -- over 20 percent of people depend on this flow of money. And they've received $3.7 billion in remittances. That's an increase -- just for a personal household, for example -- it increases their income by 50 percent. So a small increase in the amount comes to signify an extra amount of earnings for them.
Chiotakis: Implications for the global economy. Manuel Orozco, senior associate over at the Inter-American Dialogue. Thank you so much, sir.
Orozco: Thank you.