Wages

The enormous disparity between wages in developed and developing countries is perhaps the primary reason for migration.

The difference in wages

• Working in Spain our Associates will see between a 6 and 10 fold increase in their income, compared to their previous Mexican salaries.

• Even having taken travel expenses and Spain’s higher cost of living into account, our Associates will still have a net income significantly greater than their original income in Mexico.

• The Euro’s current strength against the Mexican Peso (MXN)—at almost $20 MXP per Euro vs. $13 MXN per U.S. dollar—is another factor that helps Associates gain even greater comparative wages in Spain.

Remittances

Although certainly not a panacea for eliminating global inequalities, remittances have been proven to be one of the most effective tools for tackling poverty.

What impact do remittances have on poor countries?

• According to the World Bank, remittances sent back to developing countries amounted to US$283 billion in 2008, more than twice the size of all aid flows. An estimated US$300 billion annually is also sent through informal channels.

• The Spanish Government reported that migrants in Spain sent more than €8 billion back home in 2007. This is twice Spain’s foreign aid budget.

• The Inter-American Development Bank (IDB) reports that Mexico received US$25 billion in official remittances in 2008—an amount equal to 2.8% of GDP and 10% of the country’s annual exports.

• According to the Bank of Mexico, remittances in 2008 represented Mexico’s second largest source of income after oil-export tax revenues (US$27 billion) and before foreign direct investment (US$21 billion).

• The IDB estimates that 18% of Mexican adults receive remittances regularly, and that 75% of Mexican families receiving remittances spend the money on basic needs, such as rent, food, medicine, or utilities. The annual amount received per person, if averaged out, would be US$1,300.

• Mexico uses its future expected stream of remittances as collateral to borrow money. The World Bank explains that the fact that the country has access to billions in foreign exchange from external sources enables securitization structures, which can help mitigate possible devaluations and speculation.

• According to Foreign Affairs magazine—the leading forum for discussion of American foreign policy and international affairs—much of the recent growth in Mexico’s middle class can be attributed to migrant remittances. The growth of this middle class will be a major driver of a stronger democracy, a greater balance of power, increased equity, and more stable political institutions in the country.