COVID-19

Remittances to some Latin American countries are booming

Erika Beras Sep 2, 2020
Heard on: Marketplace
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A woman counts cash outside a U.S. remittance collection agency in El Salvador. Remittances to that nation and others in the region declined sharply, then rebounded. Marvin Recinos/AFP via Getty Images
COVID-19

Remittances to some Latin American countries are booming

Erika Beras Sep 2, 2020
A woman counts cash outside a U.S. remittance collection agency in El Salvador. Remittances to that nation and others in the region declined sharply, then rebounded. Marvin Recinos/AFP via Getty Images
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Last year, migrants from Latin America and the Caribbean remitted nearly $100 billion to family members back in their home countries. Early in the pandemic, the World Bank estimated that remittances from the U.S. to Latin America would fall by 20%. But payments to some Latin American countries have bounced back.

For the past eight years, 24-year-old Byron Chamorro’s father has been sending money to his wife, Byron’s mom, in Guatemala. Then, the pandemic hit. Lots of people stayed home. But not Chamorro’s father. He delivers food for an Italian restaurant in Brooklyn, New York.

“He actually started working on the weekend, which was something he did not do,” Chamorro said.

And the money he remits to Guatemala?

“The amount that he sent increased a little bit during the pandemic,” he said— $150 a week, instead of $100.

Mark Hugo Lopez, director of global migration and demography research at the Pew Research Center, said that in April, there was a steep decline in remittances to El Salvador and the Dominican Republic, but those have rebounded. He said that’s because migrants from those countries tend to do essential work — farming, food production, hospitality. Meanwhile, remittances to Mexico never declined at all. In fact, they’ve been increasing all year.

“Many Mexican immigrants have been in the U.S. for so long that they’re able to navigate better some of the uncertainties about the labor market associated with the COVID-19 downturn,” Hugo Lopez said.

That’s good news for Mexico, which is grappling with the loss of tourism. Roy Germano, senior research scholar at the New York University School of Law, said that’s true of a lot of Latin America.

“But often in those countries, there really isn’t much of a safety net to speak of, and migrants play that safety net role,” he said.

Diego Vacaflores, an economics professor at Texas State University, plays that role. He sends money monthly to his parents in Bolivia. When he saw the shortages of products here in the U.S., “I knew that was gonna happen eventually in Latin America, and I tried to get my family to be prepared for that, to do it before things run out in the market,” he said.

So he sent them an extra $1,000 this spring.

COVID-19 Economy FAQs

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

Are we going to see another wave of grocery store shortages?

Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products. But they can’t rely totally on predictive modeling. People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. So, grocers are going to have to trust their guts.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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