Labor migration and cash flows

Importance of labor migration and remittances for Mexico

Extent of labor migration and remittances

• Mexico is one of the most important countries of origin for migrant workers worldwide. Millions of Mexicans work in the USA, mostly without secure residence status.

• Remittances are of enormous importance for Mexico: In 2023, the country received around USD 63.3 billion in remittances - this corresponds to around USD 4.5 % of gross domestic product and is the country's largest single source of foreign currency, ahead of tourism and foreign direct investment^1.

• In 2025, around 4.5 million households and almost 10 million adults in Mexico regularly received money from abroadespecially from the USA^2.

Who benefits in particular?

• Remittances flow primarily to the poorer regions of Mexicoespecially in western, central and southern states such as Michoacán, Guerrero and Oaxaca, which traditionally have high emigration rates and little economic dynamism^1.

• Rural and indigenous communities in particular are dependent on these cash transfers, as they often have little access to stable employment or state support.

Social consequences and effects

Positive effects

• Securing livelihoods: Remittances ensure the survival of many families and provide access to basic needs such as food, clothing, healthcare and education^1.

• Poverty reduction: Studies show that remittances can significantly reduce poverty in recipient households and mitigate regional development disparities^1.

• Financial stability: Households receiving remittances report less financial stress than those without this support^3.

• Investments in education and infrastructure: Some of the money is used for school education, small businesses or local infrastructure, which increases development opportunities in the long term.

Negative and ambivalent effects

• Dependence: Many regions and families become economically heavily dependent on remittances. If these are missing, there is a risk of poverty or social decline.

• Social division: Migration often leads to family separations, and children and elderly people who are "left behind" suffer from emotional stress and a lack of care.

• Demographic consequences: There is a lack of young adults in many villages, which leads to an ageing population and a shortage of workers.

• Increasing uncertainty: Political measures in the USA, such as threatened taxes on remittances or stricter migration policies, unsettle families and can abruptly reduce the flow of money - with noticeable consequences for the recipients^4.

Social dynamics

• Social mobility: Remittances enable social advancement, but are not a panacea for structural disadvantage. Without sustainable local development, emigration remains the only prospect for many.

• Regional disparities: While the north benefits from trade, many southern regions are dependent on migration and remittances - this reinforces the economic and social division of the country^1.

Conclusion

Labor migration and remittances have a profound impact on the lives of millions of Mexicans. They ensure the survival of many families, alleviate poverty and promote development in certain areas. At the same time, they create dependencies, social divisions and insecurities that present Mexico with major social challenges^1^2.

Supplementary assessment from a Gradido perspective

It turns out that the "export" of labor and the susceptibility to family remittances is a double-edged sword in many respects. Let us share some key thoughts with you from a Gradido perspective:

The core problem: systemic devaluation and outsourced perspective on life

The dependence on emigration and remittances is a result of structural injustice: millions of people have to leave their homeland because their dignity, skills and work are not sufficiently valued and remunerated in their own country. The existential value of human beings is "imported" from outside - at the expense of family, social and cultural integrity.

How would Gradido work here?

• Self-determined staying instead of forced leaving: If Gradido guarantees everyone a stable, secure income, regardless of their job or economic situation, emigration due to economic hardship loses its urgency. Families remain united, children grow up in their communities - the lost roots can grow again.

• Strengthening local development: With a natural basic supply of resources distributed by the community to the people, villages and towns in the south and in indigenous regions gain development power. Migration becomes an option, no longer a survival strategy.

• Dissolution of structural dependency: When value creation is not tied to the export of cheap labor and money transfers from abroad, it also heals the dignity, identity and sovereignty of a society. Productive, creative and caring work can grow and flourish locally.

• Social and economic balance: The enormous divide between "poor recipients" and "migrant providers" is eliminated. Every person is seen as a valuable part of the community, not as someone whose life plan depends on how much money he/she receives from afar.

Healing on all levels

Gradido would enable Mexico to understand and promote its people as its greatest resource. The country would no longer be characterized by global migration, but by regional renewal and the richness of solidarity. Peace, identity and social warmth would return, and the country would become less dependent on external and unpredictable influences.

With Gradido, the bitter fate of being forced into migration out of existential need could be overcome. Families, communities and villages could flourish and develop their full potential - supported by dignity, security and confidence.