Rich world's jobs crisis jolts money flows to millions
(Reuters) - Carlos Sosa, a Salvadoran waiter in New York, used to send up to $500 a month back home to his mother to help pay for her medical bills and food.
But now, after the coronavirus hit and he lost his job in early March, Sosa has burned through his savings and the wire transfers have stopped.
The 42-year old says he is struggling to pay for even his own rent and is concerned for his mother. “It’s been a very tough situation,” said Sosa, who is in the middle of processing his U.S. residency papers. “The economic part is the most traumatic of all this."
Lockdowns imposed by wealthy nations to slow the spread of the novel coronavirus, and the jolt those restrictions have delivered to their economies, are severing a vital lifeline for many often vulnerable people around the world: the billions of dollars in remittances sent home by relatives working abroad.
Roughly one in nine of the global population receives remittances, or about 800 million people, according to the United Nations. Early data show severe drops have already taken place.
El Salvador saw remittances collapse 40% in April from a year earlier, to $287.3 million, according to the country’s central bank.
Sosa says he looking for a new job but the ones available feel risky, involving cleaning places like trains or hospitals. He has warned his mother that there would be no more wire transfers for some time.
As he told her: “We will have to see how we survive this because things here are difficult.”
GLOBAL IMPACT
The World Bank has said it expects global remittances to low- and middle-income nations to fall by $109 billion, or almost a fifth, in 2020 to $445 billion. The bank projects the pandemic will cut into the wages and employment of migrant workers, who tend to be the most vulnerable when there is an economic downturn in host countries.
The steep drop in remittances carries dire consequences for the many countries around the world that are heavily dependent on such payments and whose economies are already reeling from a slump in demand triggered by the coronavirus crisis. The risks range from rising poverty and hunger to balance-of-payments emergencies for developing economies reliant on the cash.
The vulnerable spots include India, China and Mexico, the top recipients of remittances by value, according to the World Bank.
The Philippines, the fourth-biggest recipient of remittances, has nearly one in 20 of its adult population working abroad.
The world’s two largest sources of remittance payments have been severely disrupted.
The United States, which tops the World Bank’s list, accounting for some $68.50 billion of payments globally in 2018, has seen unemployment skyrocket, with more than 40 million jobs lost since March.
The Gulf economies, the world’s No. 2 source, have been hammered by lower oil prices.
Elizabeth, who lives near Guatemala’s capital city, used to receive about $1,200 a month from her daughter’s fiancé, who worked as a cook in the United States.
But the payments stopped after coronavirus shuttered the two diners he worked at and dried up his other side jobs.
The money had helped pay for Elizabeth’s treatment for stomach cancer at a semi-private hospital and regular visits from a nurse, as well as food and other basics.
The future looks bleak, said 69-year old Elizabeth, appearing frail as she stood in the doorway of her home near Guatemala City in early May.
"Now I only ask God to help us, and to help all those people who lost their jobs in the United States and here,” she said.
(Reuters) - Carlos Sosa, a Salvadoran waiter in New York, used to send up to $500 a month back home to his mother to help pay for her medical bills and food.
But now, after the coronavirus hit and he lost his job in early March, Sosa has burned through his savings and the wire transfers have stopped.
The 42-year old says he is struggling to pay for even his own rent and is concerned for his mother. “It’s been a very tough situation,” said Sosa, who is in the middle of processing his U.S. residency papers. “The economic part is the most traumatic of all this."
Lockdowns imposed by wealthy nations to slow the spread of the novel coronavirus, and the jolt those restrictions have delivered to their economies, are severing a vital lifeline for many often vulnerable people around the world: the billions of dollars in remittances sent home by relatives working abroad.
Roughly one in nine of the global population receives remittances, or about 800 million people, according to the United Nations. Early data show severe drops have already taken place.
El Salvador saw remittances collapse 40% in April from a year earlier, to $287.3 million, according to the country’s central bank.
Sosa says he looking for a new job but the ones available feel risky, involving cleaning places like trains or hospitals. He has warned his mother that there would be no more wire transfers for some time.
As he told her: “We will have to see how we survive this because things here are difficult.”
GLOBAL IMPACT
The World Bank has said it expects global remittances to low- and middle-income nations to fall by $109 billion, or almost a fifth, in 2020 to $445 billion. The bank projects the pandemic will cut into the wages and employment of migrant workers, who tend to be the most vulnerable when there is an economic downturn in host countries.
The steep drop in remittances carries dire consequences for the many countries around the world that are heavily dependent on such payments and whose economies are already reeling from a slump in demand triggered by the coronavirus crisis. The risks range from rising poverty and hunger to balance-of-payments emergencies for developing economies reliant on the cash.
The vulnerable spots include India, China and Mexico, the top recipients of remittances by value, according to the World Bank.
The Philippines, the fourth-biggest recipient of remittances, has nearly one in 20 of its adult population working abroad.
The world’s two largest sources of remittance payments have been severely disrupted.
The United States, which tops the World Bank’s list, accounting for some $68.50 billion of payments globally in 2018, has seen unemployment skyrocket, with more than 40 million jobs lost since March.
The Gulf economies, the world’s No. 2 source, have been hammered by lower oil prices.
Elizabeth, who lives near Guatemala’s capital city, used to receive about $1,200 a month from her daughter’s fiancé, who worked as a cook in the United States.
But the payments stopped after coronavirus shuttered the two diners he worked at and dried up his other side jobs.
The money had helped pay for Elizabeth’s treatment for stomach cancer at a semi-private hospital and regular visits from a nurse, as well as food and other basics.
The future looks bleak, said 69-year old Elizabeth, appearing frail as she stood in the doorway of her home near Guatemala City in early May.
"Now I only ask God to help us, and to help all those people who lost their jobs in the United States and here,” she said.
