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MIGRATION-US: Ailing Building Industry Squeezes Remittances

Jelena Kopanja

NEW YORK, Mar 7 2008 (IPS) - Wearing a hat emblazoned with a bald eagle and a U.S. flag, Gerardo waited with some 30 other men in front of a 7-Eleven in Alexandria, Virginia hoping a builder or contractor would come by to offer a job. The Sunday morning cold was a minor inconvenience. Lack of papers and, more recently, lack of work were bigger worries.

Sometimes they wait for days without job offers, said Gerardo, 32, an undocumented immigrant from Guatemala who asked that his last name not be published.

And while construction work pays best, it is increasingly scarce. “We are now getting more jobs in painting and moving,” he said.

The end of the housing boom has signaled a bust in construction jobs, a field in which about 28 percent of workers are foreign-born, according to the U.S. Bureau of Labour Statistics.

Since some of these wages are sent back home to support families, already the effects are being felt abroad, especially in Latin America, whose nationals are heavily represented in construction. Latin American and the Caribbean received 60 billion dollars in remittances from nationals abroad in 2007, according to World Bank statistics.

Gerardo, for example, stills sends his parents money regularly, even though he hasn’t seen them in 10 years.

But payments like his are already starting to slow. Remittance growth to Latin America grew just 6 percent in 2007, after more than doubling since 2002, according to World Bank figures.

Executives at one New York City money transfer firm have seen the same thing on the ground. “Because of the problems in construction, our clients are sending less money,” said Linda Delgado, vice president of Delgado Travel in the ethnically diverse borough of Queens.

At the beginning of 2007, the typical transfer payment was about 250 dollars, Delgado said. By early 2008, the average amounts had decreased to between 180 and 200 dollars.

“We are also seeing more small transactions – 20, 30, 60 dollars,” she said. “People are sending what they can.” Delgado transactions analyst Mariuxi Pazmino estimated that the agency had seen a 40 percent drop in transfers.

“People will not be able to send as much,” agreed area resident Abelardo Mendoza.

Since remittances now outstrip foreign development aid, they’re also seen as a potent anti-poverty tool.

“Just in 2006, there were about 1.5 billion individual transactions, amounting to over 300 billion dollars,” sent by the estimated 150 million migrants worldwide, said New York University Immigration Studies co-director Marcelo Suarez-Orozco.

Two-thirds of new U.S. construction jobs in 2006 went to Latino workers – typically foreign-born and recently arrived, according to Pew Hispanic Centre data.

Delgado said that some members of the Ecuadorian community she serves return to Ecuador for months at a time. While some invest in building houses there, in most cases the remittances are used for everyday survival, she said. Right now, for example, some funds are going to support families whose homes were destroyed by major floods.

Mexico’s Guanajuato state, which supplies workers to much of Southern California’s construction industry, could be one of the hardest-hit areas, said Luis Guarnizo, an immigration specialist at the University of California, Davis. “With Mexico, we’ve already seen a slowing down of growth” in remittances, Guarnizo said. “Maybe for the first time in many decades, we’ll be seeing no growth or even negative growth.”

“Immigrants are hypersensitive to economic fluctuations,” Suarez-Orozco pointed out. The downturn may also slow immigrant arrivals. “People may be calling back their relatives and saying ‘don’t come, there are no jobs’,” he said.

The state of the economy is also a good indicator of how the U.S. public views immigration, he added. Historically, fewer jobs have often meant less tolerance.

A downturn may increase competition for jobs, leading to higher tensions based on ethnic and country ties, suggested Darrick Hamilton, co-author of a study about African Americans in New York City’s construction industry.

“Both Latino and black immigrant workers receive lower-than-average wages in comparison to white immigrants,” he said. “In the economic downturn scenarios, my suspicion is that most vulnerable groups will suffer the most.”

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