Pandemic remittances have rebounded. Can that last?
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Immigrants in the U.S. sent about $150 billion to their home countries around the world in 2017.
For some countries, that money adds up. Remittances from migrants in the U.S. and elsewhere are worth about 20% of El Salvador’s GDP. In a global economic crisis, though, can that money keep flowing?
Karen Rivera is a hairdresser at a salon in Brooklyn where business is down around 60% since the pandemic. Rivera still sends about $300 dollars a month back home to her family in Nicaragua.
She said her family lost their jobs back home because of the pandemic. With fewer clients, she can’t send as much as she used to. But she hasn’t missed a payment yet.
According to the Pew Research Center although remittances to Latin America dropped sharply around April, they spiked over the summer. Immigrants from countries like Mexico and the Dominican Republic have actually been sending more money than before.
Mark Hugo Lopez, who directs global migration and demography research at Pew Research Center, said a lot of essential industries like grocery stores and meatpacking plants are largely powered by immigrants.
“So that the foreign-born were starting to recover jobs more quickly than the U.S.-born back when the economic downturn really hit back in April,” Lopez said.
And context is important. While the situation here in the U.S. is dire, it can be worse back home.
“A lot of what drives remittance flows is not just the supply of money that migrants have to send, but also the demand that their friends and family members have back home for a safety net,” said NYU professor Roy Germano, author of the book “Outsourcing Welfare.”
Germano expects remittances to continue to grow. But not everyone agrees. Dilip Ratha, an economist focusing on remittances at the World Bank, said many migrants from Latin America who went back to work are starting to lose their jobs again.
“My sense is that, going into 2021, there will be a significant decline in remittance flows, and that will be about, according to our projections, a decline of 8.1%,” Ratha said. He said that’s going to seriously impact the well-being of people in receiving countries.
Back in the hair salon in Brooklyn, Rivera worries about not being able to send her family money past the holidays. She said she’s been dipping into her savings to send money back home and take care of herself. By December, that money will run out.
COVID-19 Economy FAQs
With a slow vaccine rollout so far, how has the government changed its approach?
On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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