Working Immigrants

Mexican workers are effectively helping to save Vermont’s cherished milk farms. The farms are in danger of being wiped out by competition. Milk production accounts for 80% of the state’s farm output and dairy farms are an icon of Vermont life. Mexican immigrants today account for an estimated on third of milk farm labor in the state. Farmers say that help is otherwise not available.
A recent report by John Dillon on Vermont Public Radio on Mexican workers on Vermont farms revealed how the state is implicitly collaborating with farmers to ensure that undocumented workers are available. It starts with the submission of the Citizenship and Immigration Services’ I-9 form.
According to the story, the Vermont Department of Agriculture advises farmers

To make certain that the documents that are required for the I-9 are there. The employer, the farmer, has no requirement to test the validity of the documents.

It’s kind of like “don’t ask, don’t tell”. The news story said that

Federal immigration officials usually leave the farms alone. But workers can get turned in and deported if they get a speeding ticket, or if they’re stopped by police for a routine traffic violation…. Agriculture Secretary Steve Kerr says it’s common knowledge that the papers many Mexicans carry are fake.

Money flows from Mexican workers in the United States to Mexico are approaching $20 billion a year. I have excerpted from the Financial Times (subscription required) an article on this topic, describing methods of transmission and surprising ways in which the money once received is used.
Excerpts from the Financial Times, Home towns and US banks grow better at reaping benefit of migrants’ dollars, By John Authers 12/12/05
Take a walk along Broadway in the New York district of Harlem, and you can begin to understand the recent strength of the Mexican peso against the dollar. Now in a largely Hispanic neighbourhood, with a pocket of Mexican migrants from the state of Puebla, Broadway is lined by remittance houses, all advertising in Spanish what they say are cheap rates.
It is a phenomenon repeated in Mexican neighbourhoods across the US. In the past few years, the economic weight of Mexico’s migrant labourers has begun to make itself felt south of the border. The migrants’ dollars help to explain the strength of the peso, and they are also beginning to wreak much more profound social changes at home.
The numbers, as published by the Bank of Mexico, tell an extraordinary story. For the first 10 months of this year, the money sent home to Mexico from the US in family remittances was $16.5bn – only just below the $16.6bn that was sent back during all of 2004. It is also $10bn more than the $6.6bn remitted to Mexico in 2000.
This money was sent mostly in transactions of about $300, and is increasingly sent by electronic transfer, rather than the traditional money orders.
Banxico is careful to state that the rise may not be as sharp as it appears, because its information-gathering has improved. Its earlier figures may therefore have understated the phenomenon.
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Migrants now have a greater array of options when they want to send money home. In 2002, many banks in the US decided they would accept consular ID cards, known as the matricula, as proof of identity from migrants wanting to open bank accounts. The cards were available from consulates to all Mexicans, even those working in the US illegally.
City and state municipal authorities across the US were happy to recognise the cards, which could also be used to obtain driving licences. The idea was to regularise or improve the status of undocumented labourers.
The effect of the cards was immediate. Wells Fargo, one of the largest US banks in the areas with high rates of Mexican immigration, reported that 400,000 people used the cards to open accounts with its branches. The cards ushered in competition, with Citigroup, Bank of America and HSBC all also offering remittance services.
Technical improvements have also helped. For example, the Poni card, backed by several patents, is now available in Las Vegas, Phoenix, Tucson and Chicago and will soon spread to areas with higher concentrations of Mexicans such as California, New York and Texas. Migrants can buy Poni cards, which come in various peso denominations and look much like phone cards, in US groceries, and scratch off the foil on the back to reveal a 16-digit PIN number. Armed with that PIN, a Mexican can take one of the 1m Poni cards in circulation south of the border, and use it to withdraw that amount from an ATM. Each PIN can only be used once, and the ATM will respond only to the PIN. The card’s backers believe that its key advantage, compared with a bank account, is that it maintains anonymity. It is also sold the same way as phone cards, which are already popular items among migrants.
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There is controversy, however, over the impact of remittances on Mexico, and even whether all the money that shows up in the Bank of Mexico figures really goes to poor families.
Rodolfo Tuiran of Sedesol, the social development ministry, stirred the controversy earlier this year with a paper attacking the notion that remittances had helped to alleviate poverty. According to Sedesol research, if all the remittances were suddenly to stop, the proportion of Mexicans living in poverty would rise only from 47.1 per cent to 48.5 per cent. The proportion of remittance money going to poor families is even falling over time.
“For some people, remittances allow them to buy a basic basket of essential goods,” says Rodolfo Tuiran, of Sedesol, Mexico’s social development ministry. “But overall, in terms of poverty, remittances don’t have a significant impact. They do, however, have an important impact on inequality – they increase it. Of every $100 received, $75 goes to homes that aren’t poor.”
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However, remittances are increasingly being channelled to productive uses. Mexicans tend to congregate with people from the same home town, leading to a network of more than 600 home-town associations across the US. Typically, they have been involved in such things as organising trans-national beauty pageants. Now they are being encouraged to pool their remittances.
Several states now have “three-for-one” programmes, where each dollar from the home-town association for a development project is matched by a dollar each from the municipal, state and federal governments.
In Zacatecas, the silver mining state that sends the highest proportion of its people to the US, the effects are dramatic. Towns with a three-for-one scheme are immaculately paved and will often have a well-restored church. Towns that do not have dirt tracks.