NY Times: Money Sent Home by Mexican Workers in U.S. Falls Sharply

By ELISABETH MALKIN

Published: June 1, 2009

MEXICO CITY — The amount of money sent home in April by Mexicans working in the United States fell by almost one-fifth compared with a year earlier, the central bank said Monday, marking the largest decline since the authorities began keeping track of such transfers.

Remittances, as the transfers are known, have been sliding since the end of 2007, when the construction industry in the United States began its sharp decline. Many Mexicans who had found work in building and landscaping during the boom years quickly lost their jobs. Then, as the overall United States economy fell into a recession, Mexicans in other industries, including restaurants and manufacturing, also lost their jobs.

But the pace of decline in the money transfers gathered speed this year, falling 8.7 percent over the first four months compared with the same period last year, the central bank, the Bank of Mexico, reported. Migrants sent $1.8 billion in April, 18.7 percent less than in April 2008.

There is no single explanation for the sharper drop in April, said Eliseo Díaz González, an economist who studies remittances at the College of the Northern Border outside Tijuana.

Migrants have either lost their jobs or taken jobs with lower pay. At the same time, without good prospects of finding work in the United States, many Mexicans have decided not to risk crossing the border illegally.

“We are seeing the aggravation of all these trends,” Mr. Díaz said. “With opportunities for employment in the United States shutting off, we cannot continue to export labor to the United States anymore. The prize for migrating no longer exists.”

Philip Martin, an expert on migration at the University of California, Davis, said it was too early to say if the sharp drop would be repeated in the statistics for May. “It’s going to be down in 2009,” he said, “but the question is how much.”

Along with the big jump in unemployment in construction and the decline in new arrivals — who tend to send more money — Mr. Martin said a possible factor in the newly released figures was that some illegal immigrants might have paid taxes in April in the hope of an eventual amnesty.

Last year, remittances fell 3.6 percent compared with the previous year, to $25 billion. In a recent report, the Bank of Mexico said Mexicans in the United States were disproportionately employed in sectors of the economy, like construction, that had declined the fastest. In addition, a crackdown on illegal immigration, both along the border and in the workplace, has made it harder for Mexicans to find jobs.

Although remittances are one of Mexico’s largest single sources of foreign exchange, their effect is concentrated in particular states and regions. Remittances have helped to reduce poverty in those areas, but that could be reversed if the steep decline continues, Mr. Díaz said.

April was a particularly difficult month for the Mexican economy. Another source of foreign exchange, the tourism industry, was devastated in April by the outbreak of swine flu.

NY Times: Entrepreneurial Edge – Border Companies Thrive on Mexican-Americans

MEXICO’S economy has suffered a series of blows in recent months — drug violence, swine flu and the worldwide economic downturn. Yet some companies on each side of the border with the United States are prospering because they serve the expanding Mexican-American market in the United States.

A new economy is emerging that builds on the economic relationship between the countries. Exports and imports between Mexico and the United States have grown rapidly in the last decade, to close to $400 billion annually. And now trade is taking on new complexity, with operations in Southern California sometimes serving as Mexico’s link to the global economy.

Viz Cattle Corporation, for example, the American division of Mexico’s SuKarne Global, handles exports of Mexican beef to Japan and South Korea, through contracts made in Compton, Calif. The beef originates in SuKarne’s home base in Culiacán, Sinaloa, in northwest Mexico. “Japanese and Korean executives buy here, and they go to inspect the ranches in Mexico, too,” said Jesus Tarriba, manager of Viz Cattle’s warehouse operation in Compton, in southeast Los Angeles County. “Last year we sold $40 million of beef to Japan and Korea and $80 million here in the U.S.”

Viz Cattle has grown rapidly, from less than $10 million in revenue five years ago to $120 million in 2008. And it is doing well this year despite the downturn, Mr. Tarriba said. Its main business is importing beef from Mexico for American restaurants and retailers. “We specialize in smaller cuts of rib-eye and strip steaks because Mexican ranches slaughter livestock at younger ages than American ranches,” Mr. Tarriba said. “Restaurants like those cuts.”

Viz Cattle and other food companies on the border have also capitalized on the expanding Latino population across the United States and the changing tastes of the public.

“Chipotle was unknown here five years ago,” Marcelo Sada, president of Source Logistics Center Corporation, said of the smoked jalapeño pepper in many Mexican foods and sauces. Mr. Sada’s company, based in Montebello, Calif., imports bakery and soft drink products from Mexico.

Martinez Brands/Tequila Holdings Inc., from Pasadena, Calif., has also been a beneficiary of the growing American taste for Mexican products. “Tequila is the fastest growing liquor variety in the United States for the last seven years,” said Javier Martinez, president of Martinez Brands. “And why? Because young Americans vacation in Mexico and associate tequila with fun, freedom and friendship.”

Business is good as well, for Inter-Con Security Systems, a company also based in Pasadena, that protects State Department installations in the United States and abroad as well as private businesses, hospitals and sports arenas, said Carlo Gobelli, who leads Mexican operations. “Security is in very great demand, to guard executives and company operations and also shipments of goods,” Mr. Gobelli said..

Inter-Con employs 6,500 people in Mexico; the company has 30,000 employees over all. “A new concern here,” Mr. Gobelli said, “is that we are getting demands to protect pharmaceutical laboratories against theft of key ingredients that drug gangs can use.”

Still, some companies are seeing a more mixed picture. ICS Group Inc. of Rolling Hills Estates, in southwest Los Angeles County, represents Carlisle Companies’ roofing and building products in Mexico and Latin America. “Right now, American companies are holding back from investing in Mexico and are not sending their personnel because of dangers from the drug wars,” said Mark Aston, the president of ICS.

But he credited business in the Caribbean with helping the company’s annual revenues grow to an estimated $15 million this year from $300,000 in 2004. “Mexican business people and investors are confident that when this recession ends, Mexico will do well again,” he said.

Mr. Gobelli and other Mexican executives generally agreed that the economy’s overall outlook was positive. “The businessmen say, ‘This crisis did not start here in Mexico’ as have so many crises in the past. It started in the U.S. and the world,” Mr. Gobelli said. “Therefore, they say, when the U.S. and the world recover, Mexico will too.”

Meanwhile, the slow American economy and moves to control illegal immigration with increased border patrols and raids on domestic job sites have reduced migration from Mexico. So remittances to families in Mexico from people working in the United States have declined sharply in the last year. But the Latino population in the United States has grown as a result of children born to immigrants in recent decades. That Latino population is 45 million, according to the Pew Hispanic Center.

This has led to more online commerce with Mexico and other shifts in the marketplace, said Hector Orci, co-founder of La Agencia de Orci, an advertising agency in Los Angeles. “For example, Liverpool department stores in Mexico sell online to people here and the goods can be delivered to their mother living in Mexico,” Mr. Orci said.

Spanish-language media is also shifting to more use of English language commercials and programs, he said. So Mr. Orci is building a new division of his agency, called One Plus Two, for the population that speaks English but enjoys Spanish language programming like telenovelas from Mexico.

“Online use is very high among Latinos, maybe 20 million people using broadband Internet,” said Michele Ruiz, a former television anchorwoman who started the Saber Hacer (to know, to do) Web site in 2007. The site offers advice to Latinos on such subjects as parenting, personal finance, health and medicine and college preparation.

Ms. Ruiz said she had raised $700,000 to start the Web site and investors have now put in “several million more.” The site has close to 200,000 visitors, Ms. Ruiz said, and she is looking to private equity funds and other investors to raise an additional $5 million.

She wants to expand the Web site’s reach and content, which includes presentations in English or Spanish on the importance of annual mammograms, on how to write résumés and apply for positions and how to talk to your doctor or your children about sex. “We understand the culture and how people think,” she said.

TIME: The Great Wall of America

By David Von Drehle Thursday, Jun. 19, 2008

The smuggler was surprised to see us. It’s his business to monitor traffic along his stretch of the border, and he had just watched from his hiding place as a white-and-green patrol truck rolled slowly past on the U.S. side. The day shift was ending for “la migra,” the border patrol, so it was time for him to move.

He urged his clients–11 illegal aliens–to get over the fence quickly. Within minutes, all were safely across the border about five miles (8 km) west of Naco, Ariz.–roughly the same spot where Coronado and his conquistadores made the first recorded crossing in 1540. The smuggler was brushing their footprints from the border road when our four-wheel-drive rental appeared unexpectedly over the hill.

He did what smugglers always do when spotted: he bolted. In an instant he was safely back on the other side, leaving his customers to their fate. They followed him, bewildered, only gradually realizing that we were journalists, not federal agents. In this way, we had a chance to see how a group of ordinary Mexicans–one a grandmotherly woman, another a 10-year-old boy–cope with the U.S. government’s new $1 million-per-mile border-security fence.

First they tossed their day packs over the 12-ft. (3.7 m) barrier of steel mesh. They had chosen to cross at a spot where the fence made a small right-angle jog, because there was a supporting post extending about halfway up the angle. This gave them a foothold, and from there, the strongest members of the group boosted the others to the top. It was no easy transit. One young woman froze in fear, a leg on either side of the fence, her face a mask of panic as she looked at the long fall into one country or the other. Her companions quickly and efficiently coaxed her over. Then the little boy–who wore a knockoff New York Yankees cap–went over, dangling by his hands from the top and dropping bravely into waiting arms. The old woman glared at us as a companion pushed her back up the fence she had just come down. Within three or four minutes–minutes freighted with visions of broken bones and heart attacks–all of them were safely back in Mexico. They would surely try again once we were gone.

A Barrier in the Eye of the Beholder So the new border fence must be a failure, right? If a billion-dollar barrier can’t stop children and seniors in broad daylight, what’s the point?

That would be one way to tell this story–but the truth is more complicated. At the Berlin Wall, guards fired live ammunition, and still an estimated 5,000 people managed to cross. And why shouldn’t the fence be a complicated subject? Everything else about immigration and border security is complicated. The border has become the rice, or maybe the potatoes, of American politics; it goes with just about everything on the menu. It’s an economic issue: Are illegal immigrants taking jobs from American citizens and driving down wages? It’s a health-care issue: Do uninsured aliens in emergency rooms push up the cost of premiums for the insured? It’s an education issue: Are local school districts across the country overtaxed by the needs of immigrant children? It’s a crime issue: Are U.S. cities plagued by Central American gangs? And it’s a national-security issue: Could bomb-toting terrorists cross into the U.S. undetected?

Presidential candidates in both parties have learned this year to be wary of a subject that shows up in so many guises on so many different plates. What tastes like common sense to one voter–cracking down on illegal crossings–smacks of xenophobia to the next, and the same rumble of helicopters and border-patrol Jeeps in the Southwestern desert sounds to some people like America standing up for itself but to others like Emma Lazarus, poet of the Statue of Liberty, rolling over in her grave.

Passions don’t shake out neatly along party lines. Republican John McCain wove frantically through last winter’s debates trying to avoid the scarlet A-for-amnesty. His sin was promoting a “pathway to citizenship” for undocumented workers. Democrat Hillary Clinton, meanwhile, tripped on a debate question about driver’s licenses for illegal aliens. Senator Barack Obama has stepped carefully with the issue, voting for the fence and for more agents on the border while saying that this covers “only one side of the equation.”

In this cloud of intangibles, the fence is something solid. After years of talking about it, Congress last year put $1.2 billion into the project, and the Department of Homeland Security (DHS) promptly started hiring posthole diggers. DHS aims to complete more than 650 miles (roughly 1,000 km) of barrier by the end of the year, built in sections by National Guard units and private contractors. That represents only about one-third of the U.S.-Mexico border; on the other hand, the fence clearly delineates, for the first time, a frontier that was previously just a four-strand cattle fence at best.

New fence goes up every week in Arizona and California, mile after mile of posts and plates and screens and rails marching across sun-blasted deserts and up rugged, rock-strewn hillsides. No one seems able to keep track of it all. Even agents of the newly reorganized Customs and Border Protection (CBP) department find themselves coming upon sections they’ve never seen before. The work is less advanced in New Mexico and stalled in Texas, where fierce local opposition has delayed construction–a coalition of border-town mayors and chambers of commerce has sued DHS Secretary Michael Chertoff, alleging he is trying to seize land at inadequate prices. But Texas already has more than 1,200 miles (almost 2,000 km) of well-marked border in the form of the Rio Grande.

The fence is not likely to win any architecture awards. It’s a hodgepodge of designs. The best–sections of tall, concrete-filled steel poles deeply rooted, closely spaced and solidly linked at the top–are bluntly functional. The worst–rusting, graffiti-covered, Vietnam-era surplus–are just skeevy walls of welded junk. Whether you think it’s a sad necessity or a crude brutality, the fence is not a sight that stirs pride. The operative question, however, is not What does it look like? but How does it work?