Rural Mexico Shares Recession Pain
Not long ago, this remote Mexican mountain town was in the middle of a construction boom - as families proudly built their American-style dream homes, using cash sent home by relatives working in the USA.
Work on those houses has stopped, leaving shiny steel rebar jutting awkwardly out of concrete walls all over this town of 4,500. Meanwhile, residents have been forced to cut back on staples such as rice and corn. Eggs, meat and milk are now out of reach for many families.
"Thank God, we haven't had anyone die of hunger yet," says Jesus Tello, 63, a farmer. "But things are getting harder and harder. People are living on beans."
Across Mexico, desperation is increasing among the millions of families who depend on money sent home by relatives in the United States. Those money transfers suffered an unprecedented drop in May, falling 20% - to $1.9 billion - compared to the previous year, according to the Bank of Mexico. That's because the recession has left many migrants unable to find jobs in the USA, especially in construction.
The consequences have been particularly devastating in rural towns such as Pacula known as pueblos fantasmas - or "ghost towns" - because so many men have left to work in the United States, often illegally.
It's mostly women, children and the elderly who remain in Pacula, which lies roughly 100 miles north of Mexico City. About 80% of households here rely on cash transfers, also known as remittances, for basic needs such as food and clothing, Mayor Olga Hernández says. "People are just living day to day," she says.
Graciela González, 52, recently sold one of her 12 cows so she could afford food. "My husband has been up there five months and hasn't been able to send back anything," she said. She was cooking tortillas in her kitchen over a wood fire because she can't pay for gas anymore.
The hard times in Pacula testify to a dramatic reversal of fortune for the estimated 12 million migrants who, according to the Pew Hispanic Center, are living illegally in the United States. Before last year, the amount of money they sent to Mexico (where 56% of illegal migrants in the USA come from, Pew says) had grown non-stop for several decades as the migrant community in the United States became larger and more prosperous.
The recession has changed everything. Hispanic immigrants have suffered even more from unemployment during the past year than the U.S. population at-large, a recent Pew report said. The Border Patrol says the number of illegal migrants apprehended last year fell to the lowest level since 1973 as the down economy and tighter border controls discouraged many from entering the USA.
Immigration-control advocates such as Jack Martin of the Federation for American Immigration Reform say the decline in remittances may result in more money staying in the USA to generate tax revenue and jobs. He says the trend might also force Mexico to create jobs at home and tackle income inequality, describing the cash transfers as a "crutch that the Mexican government has leaned on for quite a while."
It won't be easy to live without the money - remittances generated $25 billion for Mexico last year, an even greater windfall than tourism.
About 8% of Mexico's 103 million people depend on them to some degree, says Manuel Orozco, a specialist on remittances at Inter-American Dialogue, a Washington-based think-tank. That may not be a large percentage, but those who rely on the money tend to be disproportionately poor, he says, so even a small decline can push them into malnutrition and other serious problems.
Projects on hold
Some areas of Mexico have other things to fall back on besides money from the U.S. - fertile farmland, for example, or jobs at a local factory.
It's not clear what else could save Pacula.
The town is so geographically isolated that getting there requires a one-hour drive on a rocky dirt road that hugs a sheer mountainside. There are no telephone lines and no school past ninth grade. With few teachers willing to make the commute, most classes are beamed into the small middle school via satellite television.
Poverty would be much worse if it weren't for migrants, says Hernández, the mayor.
"Before people started going to the United States, this town had straw houses and no cars," she says. "The economy of Pacula depends on those dollars."
In recent years, donations from the migrants, most of them clustered in Alabama, Georgia and other southern states, have put a new roof on the church, built a water system and bought an ambulance for the town. But now the money is drying up.
Migrant-funded projects, such as a new grandstand for the local soccer field and plans to buy a new backhoe for the city, have been put on hold as donations disappear, city spokesman Cirenio Leal says. A pile of stones and dirt stand where the grandstand was supposed to be.
At the Norteña general store, sales have dropped by about 50% since just the beginning of the year, owner Dimna Trejo says.
"If before you bought a kilo of rice, now you buy three-quarters of a kilo," says Maribel Aguilar, a community organizer. "People are eating less."
Catalina Peña, 50, has started selling home-cooked meals from a shack behind her house to make some extra pesos. Her husband in Missouri sold his pickup truck for some money to send home. She worries that will make it even harder for him to find work in construction.
Unable to afford meat or store-bought foods, many residents are subsisting on beans and corn raised on small family plots, Aguilar says.
Making matters worse, Mexico is suffering from a range of other economic problems. The market for its manufacturing exports in the USA has collapsed, and so has tourism following this year's swine flu outbreak. Overall, Mexico's economy could shrink by as much as 7% this year, according to a forecast by Morgan Stanley, an investment bank.
The slowdown may already be having an impact on Mexican politics, says Andrew Selee, director of the Mexico Institute at the Woodrow Wilson Center, a Washington think-tank. Sunday's midterm legislative elections saw major gains by the Institutional Revolutionary Party, or PRI, which ruled Mexico from 1929 to 2000 and was famous for its system of patronage and government handouts.
"If you're getting family remittances or other sources of income, you have a little more (political) independence," Selee said. "If not, you turn to those who can fix the little things in life."
The PRI's gains have weakened the power of Mexican President Felipe Calderón, a U.S. ally who is engaged in an unprecedented crackdown on drug traffickers.
Some other Latin American countries are even more dependent on cash from abroad, and thus at greater risk of political instability. In Honduras, where a military coup recently toppled the president, remittances account for 21.6% of total economic output, Orozco says. That compares to 2% in Mexico, 18.3% in El Salvador and a stunning 30% in Haiti, he says.
Philip Williams, the director of the Center for Latin American Studies at the University of Florida, says a sustained, severe drop in remittances could have unpredictable consequences in the region - including "social conflict" in less stable countries, a larger number of farmers turning to drug cultivation, or the continued ascendancy of populist, leftist governments.
'You have to cut back'
There isn't much cushion left in El Epazote, a village about 40 miles and several mountain ridges southwest of Pacula.
From a distance, the unfinished concrete houses there are nearly invisible in the rocky landscape speckled with nopales, or prickly pear cactus. The town's main landmark is a bright orange church, built with migrant donations and completed last year before the U.S. economy crashed.
About half of the village's 180 residents, including most of its men, are in the United States, mostly Oklahoma and Missouri, village administrator Marcelo Reséndiz says.
On a recent day, some of the wives left behind gathered under a bougainvillea tree and fretted about the future.
"You have to cut back on clothes for the kids. You don't have money to go anywhere. You worry about what you're going to make for dinner," says Amelia Martínez, 24. Her husband, a construction worker, is trying to find jobs in Oklahoma.
Increased U.S. border security has aggravated the problem, Reséndiz says. Illegal migrants now have to go farther into the wilderness on both sides of the border to make the crossing, and that means paying smugglers and guides. Many migrants arrive in the United States in debt to these "coyotes" for $2,000 to $4,000.
Villagers in El Epazote have stopped buying eggs, meat and milk, general store owner Juliana Reséndiz says.
Asked whether there will be enough to eat, Marcelo Reséndiz, the village administrator, pauses.
"Well, there are a lot of nopales around here," he says. The cactus leaves, if boiled, can make a passable meal.
A muted celebration
Back in Pacula, June and July are usually a happy time, as migrants come home laden with gifts and money to attend the June 24 patron saint festival.
"Welcome, countrymen!" says a sign at city hall. "Your town awaits you with open arms."
But this year, many migrants could not afford to come home. Attendance at the festival was down by about two-thirds, Hernández says.
On a recent afternoon, a dance troupe from the state capital performed to mostly empty stands in the town's main plaza. The recorded strains of the jarabe tapatio, or Mexican hat dance, echoed off the concrete.
There were stands selling sweet rolls, peanut brittle, coconut cakes and alegrias, or candies made with amaranth grain. Nobody was buying.
One of the few migrants who returned for the festival, 39-year-old Meliton Hernández, says his employer, a chicken-processing plant in Boaz, Ala., has been cutting hours and overtime because of the economic crunch.
He has been sending back 30% to 40% less money to his parents and other relatives.
"I wish I could give them more," he says. "But I can't."
Hawley is Latin America correspondent for USA TODAY and The Arizona Republic