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Manuel Orozco was interviewed on CGTN America about the impact of the United States’ Covid-19 related economic crisis on Latin American migrants and remittances sent to Latin America. He discusses how “migrant workers all over the world are losing their jobs, and perhaps the job losses are higher than for the native-born population. One of the consequences is that migrants feel constrained from continuing to send money to their families.”
Comments by Manuel Orozco:
Countries with high out-migration are hit hard by Covid-19
“In the case of Latin America and the Caribbean, we are talking about countries that have the highest migration rate [such as] those in Central America and the Caribbean as well as countries that are going through severe political crisis like Venezuela and Bolivia. In these cases, the problem is not only that there is a loss of money, but that the number of households affected is region-wide.”
Effects of Covid-19 on household consumption
“One of the consequences of the loss of income [resulting from the decline in remittances] is that you have a drop in consumption. For many countries in the developing world, but especially for Latin America and the Caribbean, the most important source of income in a national economy is household consumption. In Latin America, 70 percent of gross domestic product is based on household consumption. If most households are remittance recipients, their demand for food and other types of consumption will drop, which, in turn, will prolong economic recovery.”
Long-term impacts of Covid-19
“These countries’ economies will actually take longer to recover. Most of the money people receive in the form of remittances is integrated into household income to invest in savings for future investments as well as education. That income loss will prevent [families] from looking towards a better-improved quality of life.”
“Migrants who send remittances are [also those who find themselves] in more vulnerable conditions. The majority don’t have legal status. They also have financial weaknesses, lower incomes and are more prone to health vulnerabilities. Only 20 percent of migrants in the United States have medical insurance. During the pandemic, they are more disproportionately affected than the average population, and that has an effect not only on their well-being but on their ability to regain their job and then send money back home.”
