The sending of remittances from digital platform workers to Mexico grows

The sending of remittances from digital platform workers to Mexico grows

Most of the $51.594 million in remittances that the country received in 2021 came from migrant workers in construction, according to the Current Population Survey (CPS) of the United States government. However, the transfers of those who work in digital platformslike Uber, are also on the rise.

“We have seen it very marked,” says Jorge Godínez, director for Latin America of WorldRemit, a cross-border payment company, in an interview. The economy and the jobs generated in companies by application has been growing, and that is also reflected in remittances, he explains.

In 2019, those private transportation and home delivery companies generated 52,000 million dollars globally —a figure practically equal to that sent by compatriots to Mexico—, according to the report The role of digital platforms in transforming the world of work.

These gains “were mostly concentrated in the United States and China,” according to said report by the International Labor Organization (ILO).

A couple of days ago, the Bank of Mexico (Banxico) released information on remittances sent throughout the past year. The figure of more than 51,594 million dollars broke the record again, with an increase of 27% over the previous year, when workers in other countries sent more than 40.604 million dollars to the country.

Most of the Mexican migrant population lives in the United States, in that country there are more than 11.5 million nationals. In December of last year, the International Organization for Migration (IOM) ranked this country as the third largest recipient of remittances.

Digital platforms and migrants

The Labor flexibility offered by the applications is an attraction for migrant workers, says Jorge Godínez. Conditions of employment, of course, are a separate issue, he notes.

In Mexico more than 500,000 people are delivery or drivers per application, according to the Mexican Social Security Institute (IMSS). But without the recognition of their employment relationship with the companies, they are exposed to long hours, low and unstable income and without social security.

According to the report Millionaire platforms and precarious jobs: Transport network companies in Mexicoby researcher Rodrigo García Reséndiz, these companies have undertaken tactics “with very well defined steps”, which have been successful in avoiding “adverse regulation”.

According to the ILO report on the digital platforms, in some countries “they are an important source of job opportunities for migrants”. However, “the consequences of the covid-19 pandemic are revealing the risks and inequalities to which workers are exposed” in this type of organization.

Jorge Godínez, who has extensive experience in mobile financial platforms for migrants, points out that people who use WorldRemit to send remittances They usually have their stay in the United States regulated. Mainly those who work in applications.

In most of the United States, immigrants cannot get a driver’s license if they do not have a residence permit. But in 19 of the 50 states that make up the American Union they can process it, including California and New York.

To work at Uber you need a driver’s licenseamong other documents, so that population could work through its platform in states where there are no restrictions for undocumented people.

The company has a page called Immigrantes en Uber, where it states that they provide “support, advocacy and a safe place for immigrants.” immigrant employees with needs and anxieties associated with living and working on a visa. Support the immersion of recent immigrants.”

1 out of every 5 pesos comes from construction

Of the 19 countries in which WorldRemit has a presence in Latin America, Mexico is the one that transfers the most remittances. “More than half of the money is used for the daily support of people, household expenses, housing, food, rent, payment of services and studies. The remittances are lifesaversa means of subsistence for many Mexican households”, says its director.

According to data from the Current Population Survey, cited in a BBVA Research report, “21% of the employed Mexican migrant population worked in the construction sector”. It is followed by professional and administrative services, manufacturing, and hospitality and entertainment, “each of these three sectors with just over 12%.”

Therefore, “it is possible that 1 out of every 5 pesos of remittances that arrive in Mexico come from Mexican migrants who work in the construction sector,” the report indicates.

Besides of remittance sending growth Mexico, Colombia, El Salvador, Guatemala and the Dominican Republic have increased the amount of money they receive from the United States between 28 and 30%, comments Jorge Godínez.

The economic recovery of the United States and its decline in unemployment rates “It was directly reflected in Latin America”, at least as far as sending money is concerned.

However, “it is worrying that every time the remittances they have a greater participation in the GDP of the countries. It seems that the economy is not growing at the same rate as remittances.”

There are extreme cases, he says, such as Haiti, where these represent 50% of its GDP. In Mexico it is 5%, “it is an abysmal difference. But when you depend so much on remittances, you no longer have the ceconomic growth because they are only being used to survive,” he warns.

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