TONATICO, Mexico, (Reuters): The mountain of cash sent home by Mexicans in the United States is shrinking for the first time in over a decade, putting the dampers on Mexico's economy as a US slowdown takes work away from immigrants.
In rural towns like Tonatico, in central Mexico, where about half the men are in the United States, rodeos and country dances are being cancelled and restaurants, which play US hip hop music brought home by returning sons, are languishing.
Migrant remittances have brought a major injection of dollars in Mexico over the last decade, and forced belt-tightening by the millions of families who depend on money transfers is hurting the economy's important retail sector.
"We have to be a lot more careful with our money," said Jaime Trujillo, a town councillor who depends on family members in the United States to send money that pays for oxygen tanks for his ailing grandmother.
"People aren't buying anything, and it's been a long time since we've had a rodeo," said Trujillo.
Mexico's migrant bounty, which last year totaled nearly $24 billion, slipped 2.4 per cent during the first four months of this year-the first sustained fall in remittances since the central bank started measuring them in the mid-1990s.
The money flow had risen every year, but growth slowed in 2007 and analysts expect the tighter US job market to continue hurting remittances in the months ahead as Mexican get less work in jobs ranging from gardeners to factory workers.
Both economists and migrants say a US crackdown on illegal migration is also making it tougher to get work, while a sharp drop in the dollar's value means money sent home doesn't go as far as it used to.
"It's a double whammy for Mexicans," said Eugenio Aleman, a senior economist at Wells Fargo in Minneapolis.
All this puts extra pressure on an economy that is already cooling.
"Overall, less money from migrants means the economy won't grow as much," Aleman said. Mexico's government sees growth slowing this year to 2.8 per cent from 3.2 per cent in 2007.
Remittances are a lifeline for many of Mexico's poorest families, who have incomes of just a few dollars a day, often spent on basic necessities like food and clothes.
In Tonatico, surrounded by farmland some 60 miles southwest of Mexico City, residents say fewer hours on the punch clock and rising US gasoline prices leave their relatives in the United States with less money to send home.
"All their overtime hours have been taken away," says Jonathan Mendoza, whose parents work in a Chicago suburb and send money so he can go to college. He used to receive $135 each week but the amount has dwindled to $50.
"Sometimes I don't pay the rent on time," Mendoza said.
Mexico's government reckons more than 11 million Mexican-born workers are working north of the border in anything from carpentry to health care. A little more than half are there illegally.
The US slowdown has been hard on them, especially at building sites where 152,000 Mexican-born laborers lost their jobs last year as the housing crisis kicked in, according to a study by the Pew Hispanic Centre, a Washington think-tank.
Some researchers think Mexico's falling birth rate could also affect the flow of remittances. The average size of Mexican families shrank dramatically in 1970s and 1980s.
"There are fewer young pairs of arms looking for work," said Gustavo Verduzco, who studies remittances at Mexico City's Colegio de Mexico university.
