Thousands Adrift at the Border Lose Their US Financial Lifeline

The US-Mexico border has been a contentious issue for decades, with thousands of migrants seeking a better life in the United States. For many of these individuals, the financial support they send back to their families in Mexico is a crucial lifeline, enabling them to meet basic needs and improve their living conditions. However, recent changes in US immigration policies and employment trends have put this financial lifeline at risk, leaving thousands of families adrift.

Remittances from the United States to Mexico reached a record $55.9 billion in 2022, accounting for 95% of Mexico's total remittances. These transfers, primarily from Mexican migrants living in the US, provide a vital source of income for millions of households in Mexico. The average monthly remittance to Mexico was $390 in 2022, with funds mainly used for necessities such as food, clothing, and healthcare, as well as housing, tuition, and debt repayment (Southwest Economy, October 20, 2023).



During the COVID-19 pandemic, remittances played an especially important role in Mexico, as the country's fiscal response was limited, and the funds helped delay the recovery. A study by the World Bank found that remittances helped reduce poverty in Mexico by 1.8 percentage points in 2020, highlighting their importance in supporting recipient households and communities (World Bank, 2024).

However, changes in US immigration policies and employment trends have begun to impact the flow of remittances to Mexico. The U.S. construction sector, a leading employer of Mexican migrants, has seen employment trends directly influence remittances. When employment and wages in this sector rise, remittances also increase. Conversely, when employment and wages fall, remittances decrease. For instance, during the pandemic, remittances to Mexico initially fell but rebounded as the U.S. labor market recovered, with construction employment and wages rising rapidly in 2021-22 (Southwest Economy, October 20, 2023).

U.S. economic conditions also play a significant role in the amount of remittances sent to Mexico. When U.S. employment and wages fall, remittances also decline. Conversely, as job and wage growth resume, remittances stabilize and accelerate. For example, during the Great Recession in 2007-09, remittances to Mexico declined. However, as job and wage growth resumed from 2010 to 2014, remittances stabilized and accelerated from 2015 until the pandemic (Southwest Economy, October 20, 2023).

Changes in U.S. immigration policies can also affect the number of Mexican migrants and, consequently, the flow of remittances. For instance, during the 1994-95 Mexican recession, also known as the "Tequila Crisis," emigration and remittances spiked due to worsening economic conditions in Mexico, leading more people to migrate to the US (Southwest Economy, October 20, 2023).

Transaction costs and exchange rates also play a role in the volume of remittances. If the Mexican peso depreciates against the U.S. dollar, a recipient will receive more pesos for a given number of dollars, potentially increasing the amount of remittances received (Southwest Economy, October 20, 2023).

In conclusion, changes in U.S. immigration policies and employment trends significantly influence the flow of remittances to Mexico. A strong U.S. economy, particularly in the construction sector, and favorable exchange rates encourage more remittances, while economic downturns and restrictive immigration policies can decrease them. As thousands of migrants remain adrift at the US-Mexico border, their families in Mexico face an uncertain future, with their financial lifeline at risk.