Returning migrants boost Mexico’s middle class
By William Booth and Nick Miroff, Washington Post, July 23, 2012
SANTA MARIA DEL REFUGIO, Mexico—For a generation, the men of this town have headed north to the land of the mighty dollar, breaking U.S. immigration laws to dig swimming pools in Memphis and grind meat in Chicago.
In the United States, they were illegal aliens. Back home, they are new entrepreneurs using the billions of dollars earned “on the other side” to create a Mexican middle class.
The migrants “did something bad to do something good,” said Mexican economist Luis de la Calle.
Where remittances from El Norte were once mostly used to help hungry families back home simply survive, surveys now reveal that the longer a migrant stays up north, the more likely the cash transfers will be used to start new businesses or to pay for homes, farm equipment and school tuitions.
From Santa Maria del Refugio, a once rural, now almost suburban, community of 2,500 in central Mexico’s Guanajuato state, young men have gone to the United States seeking the social mobility they could not find at home.
Their money, and many of the workers themselves, have since returned, as the U.S. economy slowed in the global recession. For the first time in 40 years, net migration is effectively zero. About the same number of Mexicans left the United States last year as arrived. Migration experts expect the northward flow to pick up again as the U.S. economy improves. It is also possible that as Mexico provides more opportunity for upward mobility, some potential migrants will stay home.
In Santa Maria, dollars scrimped and saved in the United States have transformed a poor pueblo into a town of curbed sidewalks, Internet cafes and rows of two-story homes rising on a hillside where scrawny cattle once grazed.
“Look at this place—it’s practically a city now,” said Roberto Mandujano, 50, who moved back to his home town and opened a hardware store five years ago. “There was nothing here when I left.”
Mandujano is a member of a new demographic in Mexico, the anxious, tenacious, growing middle class who own homes and cars and take vacations. They see the United States more as a model than an exploiter.
Born into a family of 10 siblings, Mandujano set out from Santa Maria and crossed the Rio Grande at age 17. He found work on landscaping crews and highway projects, and eventually earned a plumber’s license. Now back home in Mexico, he runs half-marathons on the weekends and owns a well-stocked store (“my little Home Depot”) and a U.S. green card, traveling back to Texas whenever he wants.
“On an airplane,” he said with pride.
During the past decade, remittances sent by Mexicans from the United States have exploded, from $3.7 billion in 1995 to a peak of $25 billion in 2007.
According to the most recent social and economic data, a narrow majority of Mexicans are no longer poor but members of the middle class, marking a profound demographic shift in a country where 80 percent of the population was living in poverty in 1960.
The cash transfers are just one of many factors driving the growth of the middle class. In the 1980s and 1990s, Mexico swung from one crisis to the next: a major earthquake in the capital, bank nationalization, the sudden devaluation of the peso, an armed rebellion in the state of Chiapas.
In the past 15 years, the country has tamed inflation. Mexico is more competitive, more global, more urban, and with the opening of markets, prices for most consumer goods have dropped. The government has also made a concerted if imperfect effort over the past 20 years to provide a social safety net that subsidizes schooling, health care and food.
Then there’s Western Union’s cash wire.
Mexican workers sent home nearly $23 billion last year, greater than the direct foreign investment made by all multinational corporations. Remittances are now equal to the foreign currency exchange generated by Mexico’s tourism industry or its oil sector.