Mexico's bank card - American Thinker https://t.co/rpaVFQi1QJ
— Silvio Canto. Jr. (@silvio_canto) September 4, 2024
We have posted in the past about remittances going from the U.S. to Mexico. Much of it is family oriented, such as someone sending his mom or wife a weekly transfer. I recall when it was delivered by hand by people who would literally carry the cash down. They call these people “mulas” [mules] and they were like money agents.
Now they usually put the money in a bank card up here or wire the money. It’s a big business and a huge part of the Mexican welfare system.
Let’s check the latest numbers:
Despite July’s decline, the total value of remittance income in the first seven months of 2024 totaled 36.94 billion dollars, representing a 2.9 percent annual increase from the same period in 2023.
Additionally, BBVA Mexico’s economic studies department projected that remittances for the year will reach 66.5 billion dollars, constituting 3.7 percent of the national GDP and supporting more than 1.7 million households and 6.1 million people.
That’s six million people, or larger than many U.S. states or several Central American countries.
The argument is that these people work here, make the money, and decide to help their relatives. And that’s true. How is this helping Mexico? It appears to me that they are creating a massive dependency on relatives in the U.S. and not much more.
A few years ago, I remember an economist in Mexico saying that this money should be used to encourage business creation or other steps to break up the dependency. At the same time, what politician is going to make that point? You are not going to hear it from President Andres Lopez-Obrador, who obviously sees dollar signs in the human traffic flow.
What can we do? I don’t know because we don’t tax bank transfers in the U.S. and such a policy could violate the trade agreement.
So another month and more mothers have a little helper in the U.S.
P.S. Check out my blog for posts, podcasts and videos. (American Thinker)