Job opportunities in growing countries are highly coveted by workers in poorer countries, but recent unemployment rates in the United States has affected the remittance that helped boost Mexico’s economy and subsequent exchange traded fund (ETF).
After major job cuts in the U.S., money sent back to Mexico from migrant workers decreased 3.6% in 2008, the first decline since Mexico first started tracking the money flow 13 years ago, reports Joel Millman for The Wall Street Journal.
Mexico’s Central Bank has reported a $1 billion drop in remittances for 2007, almost twice the forecasted value. After oil, the remittances sent back to Mexico are the second-largest source of currency. It is anticipated that the annual economic output will contract 0.8 to 1.8 percent after a modest 1.5% growth for 2008.
Decades ago, most migrant Mexicans worked in agriculture. It is now reported that 5% of migrants today work on U.S. farms whereas 38% are in construction and manufacturing, and 57% are in services.
Washington-based Pew Hispanic Center estimates 239,000 immigrant Hispanic workers are unemployed as of the third quarter of 2008, and 100,000 were from construction alone.
- iShares MSCI Mexico (EWW): up 1.6% in the last week; down 12.5% in the last month
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.