Reference Paper for presentation:

Transnational Household Economies and the Role of Non-Profits in Development

New York City 11/12/2004

The New York-Mixteca Transnational Study

Prepared by
Columbia University students
Ernesto Castañeda, John Coffey, Adrian Franco, Charlie Landow and Leslie Martino,
under the direction of Prof. Robert Smith,
Sociology Department, Barnard College, Columbia University
and
School of Public Affairs, Baruch College, City University of New York

For the SIPA EPD workshop, 2004 spring term and independent study research for Ph.D.
dissertations.

Project paid by “No Borders”, directed and petitioned by Prof. Raul Hinojosa from the
North America Integration and Development (NAID) Center at UCLA

November, 2004

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 The New York-Mixteca Transnational Study

Introduction

This paper analyzes data from seventy transnational household economies, which
have migrants in the US remitting funds back to their relatives in Mexico. The twofold
goals of this paper are to analyze this data using social scientific theories and to
contribute to this scientific work, and to offer an analysis that will inform No Borders in
developing its transnational enterprise. We seek to assist No Borders in its quest to offer
remittance and communications services for these transnational households and
communities. The goal is to do so in way that is not only self-sustaining, but that
generates enough profit to be invested in community services, while at the same time
decreasing the costs incurred by the transnational household. Our analysis is meant to
inform and assist No Borders in this project. Our data comes from ethnographic work and
ethnosurveys done in New York and in the Mixteca region of the Mexican state of
Guerrero, in the towns of Huamuxtitlan and Tlapa.
This paper seeks to explicate transnational household economies, the contexts in
which they occur, and to use such analysis to recommend possible forms of action for No
Borders. No Borders has two goals - to make money, and to use this for self-financing
and to support community projects at both ends of this migration. The logic under which
No Borders is working is to articulate these bi-local household economies, and to share
much of the "captured" surplus within the community using it to support community
work, in microfinance, computer education, development, etc. in Mexico, and in
immigrant rights, computer and English education, or other activities in New York. The
dual logic of No Borders is worth testing since it can bring real relief to these families
and foster human and economic development not only in Mexico but also in the receiving
communities.
We start our analysis by reviewing the growing importance of remittances and the
relevant literature on migration. We will contrast our findings with common theories and
conceptions about migration, and consider how these findings will affect both for-profit
and non-profit enterprises. We also include a methodology appendix and some of the
quantitative data obtained from the ethno-surveys.
This study focuses on a relatively recent migrant community, one which offers an
excellent site both to study the kinds of processes that interest us, and at which to attempt
the kind of business venture that interests No Borders. The Mixteca region of Guerrero
has a great deal of recent emigration, which means that a disproportionate percentage of
its migrants are remitting to their families; it also has a stronger micro-financial
infrastructure, making more feasible the kinds of community development projects No
Borders would like to attempt. The migrant destination, New York City, offers both good
community infrastructure on which to build, but also the symbolic importance to
potential investors and policy makers by being in the middle of the global capital of the
financial world. Hence, several contextual factors of this community make this study
potentially very important.

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Background

Migration from Mexico to the United States is a fact and the important growth of
remittances sent from the US into Mexico is widely acknowledged by the World Bank,
the United Nations, the Mexican government and many other important actors. Many
studies have been done to try to understand these two phenomena. Some studies have
looked at the overall increase of remittances in the last years at the national level. Other
studies have described the binational or transnational social practices of these
communities. Here we do an analysis of migration, transnational bonds and remittances
from a new perspective looking at the regional level and focusing our study at the
transnational household economies something that only a few have done in the past,
worth note are Massey et al and recently Hinojosa and his team at NAID/UCLA.
Remittances in 2003 Mexico increased to 13.5 billion dollars, making them bigger
than International Direct Investment, with 9.0 billion dollars in 2003, which continued a
downward trend. NAFTA and the maquila industry have allowed Mexico to be among
the top five trading partners with the US. All this makes Mexico the number one country
receiving capital from the US in Latin America and the Caribbean. At the aggregate level,
all this entrance of money into the Mexican economy could seem at first glance as an
extraordinary opportunity for wealth accumulation and growth in Mexico, unfortunately
this is not necessarily the case. In order to understand the real development potential that
remittances have, we have to look at who receives this money, and where and how they
spend it.1 Our study of the transitional household economies between the region of la
Montaña in Guerrero, Mexico and New York shows that most of the remittances are used
to cover the basic necessities of the household.
We can begin with a soft, maximum estimate of the remittances from the New
York region to Mexico. Taking Smith’s estimate of 750,000 Mexicans in New York, lets
say that 500,000 of them send remittances and drawing on survey data, let’s posit that
roughly 10% of them come from the Mixteca region in Guerrero. This would yield
50,000 people sending an average of $3,500 a year as our findings suggest. Then we have
remittances of $175,000,000 from NY to Mexico. From our study we can safely assume
that they use from a 20%-30% of this figure in communications, shipping, money transfer
fees and foreign currency exchange. So we have a market of around $50,000,000.
(Figures from PROFECO say that Guerrero received 326 million dlls. in remittances in
2003 8th place in Mexico Puebla 370 million dollars 6th national place).
No Borders participation in the market should be high, especially with a good
marketing and information campaign about its aims and social consciousness. Our
interviews suggest that people do not put so much emphasis in saving a dollar or two in
sending their remittances, but rather prefer sending their money through known channels
that they have used successfully in the past.
So, with a modest assumed market share of ten per cent No Borders could obtain
a $5,000,000 market. If of these five million dollars it were to spend 3.5 million in costs,
investments and capitalization it would be left with 1.5 million dollars. No Borders could
give 1 million back in cash in the form of discounts and still use .5 million for community

1
A recent report by the ECLAC makes this point for foreign direct investment FDI. And other studies talk
about the negative effects that NAFTA has had on the Mexico agricultural sector and how it has tended to
benefit a few big companies among them the exporting and maquila sector.

Page 3 of 36
service projects. (Or all of this could be used for community services although this brings
us into the classical philosophical debate of whether it is better to give the money to the
people or to give them services collectively into what Nicole Marwell calls privatizing
the welfare estate). We asked people about their priorities needs and they proposed, aside
of a better legal treatment in the US, education in English, GED and computer training.
These projects would not only help the migrating families getting access to better jobs but
it also guarantee that the children of the migrants are better skilled than their parents. At
the same time saving some few dollars a month through just cheaper fees, provided by for
example Citibank, would not really have life changing impact in these households.

Goals of the project

The overall goals of the project are:

a) Deliver an interpretation of the data collected contrasting it with existing theories. We
offer a preliminary picture of the transnational New York/Mexican households’ economic
activities such as daily earnings and average income, sending, receiving and using
remittances, consumption and savings, short term and long term investment, debts and
allocation of resources. Moreover, this study will produce a record of the basic needs of
Mexican immigrants in New York regarding financial services, communications and
education, providing No Borders with a guideline of how it could address the short and
long term economic insecurity and lack of development in this community.

b) Provide the academic community with a study that will enhance its current
understanding regarding the use of remittances and its relation with development. This
will also support the reality and importance of transnational activities in the everyday life
of people involved in international migration.

Mexicans in New York

Although Mexican migration to the Northeast of the United States is recent

compared to Texas, California or the southwest, the Mexican population is the fastest
growing immigrant population in New York (Smith, 1999). Smith estimates that the
population tripled between 1990-2000, up to more than 300,000 in 2000, and now stands
at more than 400,000 in the City alone. Rivera-Batiz (2003) notes that “among all cities
in the United States, New York is now ranked No. 11 in terms of the size of its Mexican
population, ranking close to cities with long-standing Mexican communities, such as San
Diego, Santa Ana and San Jose, California.” The great majority of Mexicans, some 70%,
in New York come from rural populations of the Mixteca region that covers part of the
states of Puebla, Guerrero, and Oaxaca. There is also an increasing, though still smaller
population from urban areas such as Ciudad Nezahualcoyotl and Mexico City (11% of
the population in New York in 2003). Mexicans in New York City are concentrated in
Manhattan, Sunset Park, Brooklyn, Jackson Heights, Queens, the South Bronx and the
East Harlem, and show settlement overlap with other Latino groups, especially Puerto
Ricans (Smith, 2005).
The Mexican population in New York is composed of different flows which have
arrived in New York at different times. While the large majority of immigrants have

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come since the later 1980s, there are subsegments of the population that can be
differentiated by urban v. rural origin, or long term v. accelerated migrations from their
villages or towns. While most immigration to New York is still through village networks
which one or more decades existence, an increasing minority of the population, and a
large percentage of recent migration, is now through accelerated migration. Here, the
time from first migration to involvement of the whole village is compressed to less than a
decade, and often includes larger numbers of young, even adolescent single migrants.
Mexican futures in New York are bifurcating. On the one hand, the Mexican
origin population showed alarming signs of social distress in the 1990 compared to the
1980 Census. For example, Mexicans in New York went from having one of the highest
per capita incomes among Latinos in New York in 1980, nearly equivalent to Cubans, to
among the lowest in 1990; incomes rose only slightly in 2000. The decline is particularly
pronounced for those without a high school education, from $17,495 in 1980 to $13,537
in 1990, a net drop in nominal dollars of 22.6%, constituting a more than 50% drop in per
capita income for this groupi. The per capita income in 2000 of Mexican workers
increased nominally to $15, 631 for men (and $11,731 for women), but signaled no real
increase in buying power over their 1990 earnings. Indeed, this figure still placed them at
least $2000 behind their nominal earnings of twenty years earlier! Not surprisingly, a
cohort analysisii shows that fully 81% of men and 70% of Mexican American women
were not upwardly mobile in their occupations during the 1980s. A further sign of social
distress is that in 1990 and again in 2000 the Census Mexicans also had the highest rate
of 16-19 year olds who were not in high school and had not graduated -- 47% -- as
opposed to the next highest groups, Dominicans and Puerto Ricans, with 22% each in
1990iii. Perhaps most disturbingly, in 2000, school enrollment rates for Mexican boys
and girls dropped from 95% and 96% respectively at age 10-14 years, to 25% and 31%,
respectively, among those aged 18-19iv. This confirms Smith’s ethnographic findings
that there is a hemorrhage from high school by the end of sophomore year.
It is not just a tale of decline, however. In large part, these distressing trends are
artifacts of the high levels of Mexican immigration, especially teen immigration, during
the 1980s-1990s. The influx of young Mexican immigrants with low levels of education
masks the progress that a significant minority of Mexicans and Mexican Americans,
especially Mexican American women, has been making in New York. Between 1980
and 1990, cohort analysis shows that Mexican Americans levels of education were
improving steadily, though not dramatically, and more so for women, and that 19% of
men, and 31% of women were upwardly mobile in terms of occupational prestige,
associated pay and conditions. An important path for mobility in the 1990s, especially
for women, has been through semi-professional, skilled secretarial niches and in retail.
Indeed, some 34% of Mexican heritage women (versus 15% for Mexican heritage men)
worked in technical and administrative support positions, such as legal or medical
secretary. This “pink collar economy”v requires the completion of high school and either
a short term technical training program or an associates degree. Our informants and their
immigrant parents see these jobs as a real progress -- “clean” jobs, “in an office,” with
health insurance and paid vacations. Second generation women were also nearly twice as
likely as men to be in the professional and technical sector of the economy – 17% versus
9% in the 1990 and 2000 Censuses.

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 Immigrants from the Mixteca region of Guerrero tend to be younger, more recent
arrivals whose incomes are likely to be lower than more established immigrants. Also,
accelerated migration is likely to be more prevalent there, as migration has come into
force more recently there than in the Mixteca region of the neighboring state of Puebla.
We discuss some of the characteristics of the Mixteca Guerrerenses below.

Reasons for selecting target population and its characteristics

The reasons for choosing la Montaña region of Guerrero, specifically towns such
as Tlapa, Huamuxtitlan, Alpoyeca, Ixcateopan and adjoining areas in the state of
Guerrero as target population for the research are the following:
a) A high rate of out-migration, cyclical visits and transnational life. Tlapanecos are
highly concentrated in specific areas of New York such as East Harlem, Upper West
Manhattan and the Bronx and most of them keep ties with their communities of origin
and are an integral part of transnational households;
b) These transnational communities have already started some transnational development
projects such as micro-finance institutions and trans-local exchange offices;
c) People from Tlapa embody a highly diverse population. Tlapanecos represent different
ethnicities, cultures and social classes from rural and semi-rural Mexico. The use of
different languages and dialects is widespread. This diversity allows for a rigorous testing
of hypothesis since we can see how transnational life is experienced distinctly by
different socioeconomic groups;
d) Most of the research done has studied people coming from the state of Puebla (Smith,
2005) and little is known about the Guerrerenses in New York. Therefore this study
opens the door for new inquiries regarding Mexican migration to New York.
The state of Guerrero is located in the southwest of Mexico. It has 500 kilometers
of coastline along the Pacific Ocean including the tourist oasis of Acapulco and Ixtapa.
Guerrero borders with the states of Morelos, Puebla, Michoacan and Oaxaca, the last
three important migrant sending states. Guerrero is divided in seven regions.
Chilpancingo is the capital of the state and it is located in the central region (III). Our
area of interest is the region of La Montaña (IV).

SPATIAL ORIENTATION
Parallel 16 18' N

Meridian 98 03' W

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 REGIONS IN GUERRERO
Tierra Caliente I
Norte II
Centro III
Montaña IV
Costa Grande V
Costa Chica VI
Acapulco VII

The area of study is the Montaña region located to the northwest of the state. As
the name of this region implies, it is a mountainous area with peaks no higher than 2000
meters. The degree of development and economic activity in this area is extremely low
and with the exceptions of a few towns that have achieved sustainable commercial
activity this is one of the poorest regions in Mexico.
In La Montaña a commercial town stands out for its relative economic life. Tlapa
de Comonfort is busy town in the mountains of the state of Guerrero where we were
based in our fist ethnographic visit. Huamuxtitlan is a nice Spanish colony, a small
friendly and picturesque town where we were based in our second round of ethnography
in the area.
Employment opportunities in the region are few. There is little large-scale
industrial activity in the region. However, Tlapa is the regional commercial, bureaucratic
center which therefore attracts internal migration from outlying small towns and villages.
Typical commercial activities in Tlapa are hardware, mechanical, clothing and healthcare
in addition to the education sector that employs 848 teachers. In Huamuxtitlan
employment comes from small commercial enterprises e.g. restaurants, stores, bars; local
agriculture; public transportation; and a water-bottling factory.
Huamuxtitlan is a remittance economy where a large segment of the population is
dependent on remittances for primary income source. Tlapa, being a regional commercial
center, is less dependent on remittance as a form of income.
In general in Huamuxtitlan proper the standard of living was above extreme
poverty levels ($2 per day). The community is closely tied and harmonious in general.
Income inequality does exist but is not extremely obvious, although there is a line
between those who receive remittances and those who do not. And among those who do
not there is a difference between those who do not receive remittances yet but may be
forced to do so and those who do not need to since there is no doubt a local elite formed
by political figures, big merchants, professionals, the church and school teachers.
The region has been transformed in the last 15 years due to migration to the
United States. In great part due to influence of the neighboring states of Puebla and
Oaxaca where migration to New York started decades ago and has remained constant.
Tlapa has experienced the emigration of thousands of people. The population of the

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whole Tlapa County is around 60,000 with a substantial number of people that have
migrated from smaller towns. Its population includes Mixtecos, Tlapanecos, Nahuas and
Mestizos. The most important internal economic activities are the growth of maize, rice
and beans, and commercial activity. But most of the capital is now coming from outside
the region in form of investment and remittances from migrants in other cities of Mexico
or in the United States.

Remittances

The Macro Economic Importance of Remittances

Remittances are a key dimension of transnational household economies and can

be defined as the money that migrants earn working abroad and then send back to their
countries of origin. Remittance flows are one of the most visible impacts of the migration
phenomenon for migrant sending countries.
Remittances date back to the Bracero program of contract workers in the 1960s on
the fruit plantations in the west coast of the US. It is not an exaggeration to say that
remittances and migrant labor have become an institutionalized element in the cross
border relationship. The US economy has demonstrated a constant appetite for migrant
labor, exceeding Mexican rural labor has migrated and consequently over the past six
years remittances have represented a steadily increasing stream of capital to Mexico. No
study has indicated a negative effect of remittances on the US economy since the benefits
provided by cheap readily available labor and the expenses that migrants make in US
farther exceed the amount send abroad.
The US is where 95% of Mexico migrants go and where approximately 20 million
live (U.S Census Bureau, 2001) out of a population of some 100 million in Mexico. In
the global context the World Bank estimates that $111 billion was remitted worldwide in
2001. Remittances play a significant role in the Mexican economy. In 2003 13.3billion
dollars went to Mexico, up from 9.8 billion in 2002 and 6.2 billion in 2000 (Inter
American Development Bank, Pew 2004).2 So in 2003 there were more than 13 billion in
remittances sent to Mexico compared to 10.731 billion in net direct foreign investment.3
So, the so called “family member remittances” are now greater than what Mexico
receives from direct foreign investments and tourism. According to the central bank the
only foreign income source greater than the expatriate remittances is revenue from crude
oil exports.
Remittances to Mexico comprises the second largest source of income after
petroleum and is now equivalent to double that of farm exports and is 35% higher than
tourism earnings. More than 1.2 million households (5% of the national total) receive
remittances from relatives in the U.S. as many as 40% of these households are considered
"highly vulnerable" economically, since remittances are their only source of income
(CONAPO, 2002). In migrant localities receiving a lot of remittances, there emerges
what Smith (2005) calls a remittance economy, in which most income derives either
2
The exact figures depend on the source but their relative size and importance is not in question.
3
According to a report from UN ECLAC May 2004. “La inversión extranjera en América Latina y el
Caribe”

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directly or indirectly from work done in the U.S., and in which local labor supply
contracts as migrants go north (see Massey et al 1987, 2001).
The flow of remittances into Mexico contrasts with the extreme volatility of most
other capital flows to the region. During the past several years, as the US and Mexican
economies turned downward, the country’s trade revenues and capital flows fell sharply –
remittances meanwhile grew by approximately 40% from 2000 through 2002 (IADB,
2003) providing a welcome counter-cyclical effect and the foreign direct investment has
been decreasing in the last years (ECLAC, 2004).
There is no agreed-upon explanation for the robustness of the remittance flows in
the face of economic reversals in the host society. Some argue that the flows responded to
the increased needs in the region, others suggest that migrants are sending more
remittances because these money transfers have become safer and cheaper and that after
9-11 the growth in remittances has compensated for the declining number of visits home.

Among the notable characteristics of this flow are:

• Amount of money involved and its entrance into the Mexican economy with
multiplying effects
• Stability of flows (projected to continue throughout the next decade with new
migrant flows)
• Direct and positive impact on rural and poor families
• Remittances create no future financial obligations (as opposed to foreign debt or
portfolio investments)

While remittances also finance some informal lending, benefits are usually
concentrated at the individual or household levels, including extended family in many
cases. There is a strong potential for remittances to impact local level economic
development through the money multiplier effect. Remittances add liquidity to the local
economy as higher incomes generate the demand for goods that in turn promote local
markets. Remittances thus have an impact among the rural and urban poor which make
up some of the most vulnerable sectors.
Remittances in Mexico are central to the economic survival of millions of
families. Macro-level numbers, however, do not reflect the fact that remittances are often
used for immediate consumption and real estate and are seldom invested in a productive
way so as to expand opportunities to ensure medium and long-term economic
development, services and social rights. Studies show that the single biggest contribution
of remittances is to the welfare and improved livelihood of the receiving household
(some 80%) – be it in terms of basic necessities such as food or clothing, or better health
and education, or to a smaller extent in terms of savings or business investments
(Bannock Consulting, DFID, 2003).

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Challenges

In Mexico, the lack of financial institutions at the rural or small town level
prevents migrants and their families from investing remittances effectively in order to
ensure long-term economic security in the long term. Financial services such as insurance
are unknown. Credit is done by traditional ways and can be prone to unfair practices of
usury by some wealthy people in the town. It merits note that the land value of some
remote rural areas is higher than in the cities due to the permanent construction of
buildings and houses with remittance money or migradolares many of which will remain
empty if the whole family decides to migrate. In short, many potential multiplier effects
of remittances are lost due to lack of capacity to integrate this capital into the local
economy; a major element contributing to this lack of capacity is lack of local financial
institutions (Smith, 2005).
The high rates charged by money-transfer companies like Western Union or
Money Gram for sending funds abroad has traditionally been considered a barrier for
local development. Not only does the carrier take a portion of the principal, but also a
further portion of the money is consumed in the exchange rate transaction. While it has
been noted that remittances have increased in the last years due to the fact that money
carriers have decreased their fees, the reality in the originating migrant community is that
there is still an insignificant development impact from remittances, since the few dollars
they may save that way are spent in consumer goods. Moreover, it has been observed that
a significant proportion of the remittance flow is being transmitted through unofficial
financial channels, thus raising economic insecurity for the individual. Consequently,
some of these funds are not recorded which means that the effects on the economy of
remittances are difficult to measure. Not having a clear picture of the volume of
remittances and its use impedes any effort, at the macro level, to maximize the
developmental benefits of remittances.
The flow of remittances is critical to the future of Mexico and particularly vital to
the poorest segments of the population. Without remittances the country’s economic
slump over the past five years would have been far worse, especially in migrant sending
areas. The challenge at macro level is how to maximize the benefits to migrant
communities of remittance flows and encourage full economic citizenship that will be of
benefit to every level of the Mexican economy.

Findings on Economic Behavior

Our research enables us to present a detailed picture of transnational household
economies and other social life. We turn first to the economic behavior of respondents.
We first note the lack of institutionalized and widespread savings and investment
practices among transnational families. In the New York surveys, team members asked
migrants whether they had savings or checking accounts in the US or Mexico. Eighty
percent of respondents did not have an account in the US, while 10% did; almost
identically, 70% had no account in Mexico, while 10% did. Similar results emerge from
the questions in New York and Guerrero about whether respondents have any savings,
whether in a bank account or not. Among migrants in New York, 60% had no savings at

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present, while 30% did. Sixty- eight percent of Mexican families surveyed had no
savings, while 14% did.

Percentage of US Migrants Percentage of US Migrants

With Bank Account in Mexico With Bank Account in US

No answer Yes No answer Yes

20% 10% 10% 10%

No No
70% 80%

American banks have recognized the potentiality of this market and have started
aggressive campaigns to get to this sector. Citibank has bought Mexico’s biggest bank
Banamex and now claims that you can send money to Mexico for as little as US $5.00.
No Borders has an opportunity to enter into this market since the small rural communities
of La Montaña and others like them do not have banks in them. This is typically the role
of “casas de cambio” or other local money changers, who charge often usurious rates, or
at least rates very beneficial to themselves. Moreover, this market of remittances to rural
or otherwise underserved areas is not small. Given No Borders identification both of this
niche and the technology and infrastructure to effectively serve it, there is a reason for
optimism both for No Borders and for the community service work and finance
infrastructure development it seeks to facilitate.

Incomes and Remittances

These data on banking and savings practices introduce us to the precarious

financial situation of most transnational families, especially those recently arrived. To
illustrate this further, we will examine income data. Among Mexican families surveyed,
salaries earned in Mexico were few and low. Twenty-five families, or 51% of the
sample, had no members who earned income in Mexico, meaning that they depend
entirely on remittances or other sources for their livelihoods. Nineteen families had just
one salaried worker in Mexico, while four had two workers, one had three workers, and
no families had more than three. This means that 90% of the families interviewed survive
on one, or no, salaries earned in Mexico, leaving remittances as their lifeline. Indeed,
two families surveyed had four migrants in the United States who remit money, while
one family had three, eight families had two, 22 families had one remitting migrant, and
16 families had no remittances sent by their relatives in the US. Therefore, 67% of the
families have at least one source of remittances. And all of them are directly or indirectly
highly dependent on remittances. But these findings also show us that having family
members in the US does not always guarantee the reception of remittances. This level of

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dependence is consistent with the remittance economy concept Smith used to describe
villages in Puebla.
These remittances represent a large percentage of the low income of migrants in
New York. Respondents to the survey in New York reported an average monthly income
of only $1,290.20, or an average yearly income of $15,482.40, which is consistent with
the per capita income level for Mexicans reported by the Census and Current Population
Survey for Mexicans in New York. There are, however, two outliers in these data: two
migrants reported yearly incomes of $29,000 and $28,800 respectively. Among the other
respondents, average yearly income is just $12,127.99, thus making their income
significantly lower than the average in New York. And only two migrants reported two
salaried workers in their households, with no migrants reporting more than two and the
others reporting one or none. The households with two salaried workers had solid total
incomes: $40,800 and $45,000 per year respectively. The one-worker households,
however, had an extremely low average income of $10,153 yearly. This is just 30% of
the median income from 2000 to 2002 for Hispanic households nationwide, according to
the latest US Census Bureau data.4 While the US Census Bureau 2003 poverty line for a
single individual in the US is $9,573 and that for a four member household is $21,623.5
With these low incomes, remittances represent a large proportion. According to
the New York respondents, the average remittance sent is $361.54. Forty percent of the
respondents remit money at least ten times per year, while 10% remit twice per year and
20% three times yearly. The composite picture that emerges is compelling. Given a
migrant who earns about $12,000 per year and remits about $350 ten times yearly, total
annual remittances of $3,500 represent around 29% of annual income, an income that is
already stretched to provide the basic necessities.
Two actual cases from the data illustrate this. The first respondent earns $1,152
per month, or $13,824 per year. He remits $500 ten times a year to his family in Mexico.
The remittance fee is 4% of the amount sent. Therefore his $5,000 in annual remittances,
plus a 4% fee of $200 over the course of the year, represents 38% of his income. Leaving
him with less than $9,000 a year, below the poverty line, although he has no access to any
form of social insurance. This respondent’s remittances are clearly well above average,
but even a migrant who remits far less shows quite well the economic difficulty of
transnational life. This second respondent earns $1,000 per month, or $12,000 per year.
She remits $200 11 times per year, also at a fee of 4%. Therefore her total remittances of
$2,200, plus a 4% fee of $88, represent 19% of her yearly US income putting her close to
the poverty line. These people work all day, 6 days a week to barely survive and to send
money so their family can cover their basic necessities. Theirs is a financially precarious
situation, made worse by the fact that they can be deprived at any time of the chance to
make money by being apprehended by the immigration authorities.
Income data from Mexico confirm the great importance of these remittances to
Mexican families who often do not earn much money in their communities. We have
seen how much of migrants’ incomes go back to their families. Now we can see how
much of the families’ income comes from remittances. The average salary for workers in
Mexico is $78.42 per month. Meanwhile, the average monthly remittance received,
according to Mexican respondents, is $253.96. This represents a monthly addition to the
4
http://www.census.gov/hhes/income/income02/3yr_avg_race.html
5
http://www.census.gov/hhes/poverty/threshld/thresh03.html

Page 12 of 36
average Mexican respondent’s income of 323.85%. That is, without remittances, the
average Mexican survey respondent would have less than one-third as much money to
spend each month for his or her household.
Two cases from our Mexico data reinforce this conclusion. The Sanchez family
(all names have been changed to preserve confidentiality for respondents) has six
members living together in Mexico. They receive an atypically large amount of
remittances, $600.00 per month, but they have no salaried workers earning income in
Mexico, a situation which, as noted above, is common to over half our sample. The
Sanchez family spends $300.00 per year to enroll children in school, and had exceptional
medical expenses last year of $3000.00 that were not covered by any health insurance or
public program. This illustrates both the precariousness of the family’s situation, and the
key role of remittances. Without remittances, the medical expenses of the family
member would have been impossible to meet, and treatment would have been
unavailable. But even with remittances, this one very large unanticipated expense put the
family budget way out of balance. Also, as with most other respondents, the Sanchez
family has no savings.
The Ramirez family is near the average in incomes and remittances. It has eight
members, and it earns $62.00 per month in Mexico and receives $250.00 per month from
remittances. Both these figures, as seen above, are quite close to the typical amounts.
The family pays nothing for school enrollment but has other school-related expenses. The
Ramirez had medical expenses of $530.00 last year, and pay $36.00 per month for basic
household utilities. Therefore, the Ramirez family illustrates quite clearly how average
transnational families live in difficult financial straits, and how they depend on
remittances for basics such as schooling and health care.

Spending of Remittances

Our data give us an idea of how Mexican families spend the remittances they
receive. The result shows that remittances go overwhelmingly to necessary, basic
expenses, suggesting that life without the money remitting from the US would be much
more difficult. The most common expense for which Mexican families spent remittances
is rent or household repair or building; these represent 27% of all responses from families
about how they spend their remittances. The next most common response was food,
which made up 23% of responses, followed by medical expenses, at 18%. Educational
costs are also a relatively common use of remittances; they made up 14% of a typical
reported budget. In addition, a few families reported spending remittances on their
children, clothing, land, parties, or savings. Clearly, the vast majority of remittance
spending goes to basic needs, showing the crucial importance of remittances to the
livelihoods of transnational families.

Page 13 of 36
 How Mexican Families Spend Remittances
Clothes

Education

1 1 1 3 Food
12 9
House/Household
Goods/Rent
2 Kids

Land
4 15 Medical

18 Parties

Save

Other

Employment in New York

Our data also paint a richer picture of the everyday lives of the migrants who send
those remittances from New York to their families in Mexico. Seventy percent of
respondents worked in service jobs, with restaurants the most common employer. Ten
percent worked in manufacturing, with another ten percent performing domestic work.
Our data show that the limited opportunities migrants have, and the limited
incomes they receive, are due to several factors. First, the migrants have, in general, low
educational levels. Of our New York respondents, 19% had finished only primary school
(6th grade), 62% had some middle school (through 9th grade), 19% had gone to some
preparatory school (through 12th grade), and none had attended university among our
sample, although we also know of cases of people with university education working in
restaurants because of their migration status.
We also know a person from the region who has university degree and who has a
Mexican restaurant and whose income is much higher than that of a worker. We did not
include his case in the data analysis since he no longer has a transnational household
since he got divorced and his daughter is now in the US too. Nonetheless he sends
considerable remittances to his extended family members on special occasions and in
times of need.

Page 14 of 36
 The most common level of educational attainment, accounting for 62% of the
respondents, was secondary school, a stratum equivalent to the ninth grade in the US.
Undoubtedly the low level of education leads to limited job opportunities for migrants.

Educational Level of Migrants

in US

Preparatory University Primary

19% 0% 19%

Secondary
62%

Second, few of the respondents speak English competently. Half of the migrants
said they spoke English barely or not at all, while 10% said they spoke some English and
another 10% said they spoke it well. Finally, the migrants are, in general, undocumented.
Only one of the New York respondents who answered a question about the status of their
immigration documents reported having his papers in order; the others said they did not
have legal status, or did not answer the question, which suggests that their papers are not
in order. Since legal status is a prerequisite for most high-earning jobs, this, too, is likely
a factor in migrants’ low incomes and limited opportunities.

Expenses of New York Migrants

These low incomes are quickly spent. As we have seen, remittances represent a
huge percentage of many migrants’ incomes. But other basic expenses do, as well. The
average monthly rent that New York respondents reported paying was $588.00, and they
reported paying an average of $54.29 monthly on utilities, $51.67 on laundry, and $46.00
on telephone costs. In addition, anecdotal evidence from informal interviews conducted
by the team suggest high costs in New York for such other expenses as food and basic
entertainment on weekends, including sports, drinking and eating out. Clearly, migrants’
incomes, already reduced by the remittances that provide a lifeline to many Mexican
families, do not leave much room for necessary expenses, let alone anything else. This
certainly contributes to the lack of savings among respondents mentioned above.
The 2000-2002 New York income median according to the US Census is $42,432
while “Consumer units in the New York-Northern New Jersey metropolitan area spent an
average of $48,237 per year in 2000-2001”6 for expenditure patterns among the overall

6
http://stats.bls.gov/ro2/ce9805.htm

Page 15 of 36
New York labor force see appendix II.7 Given the high standard and cost of life in the
New York area Mexican migrants, especially those remitting, live in subsistence
conditions, offering little time or money for social life. Some work all day long without
eating because they did not have a break at work.

Community Center in New York

Finally, as regards the need and desire for a community center, our data again
indicate strong responses. Seventy percent of New York respondents believe a
community center for migrants from Guerrero and the Mixteca region is needed, while
only 20% do not. Similarly, 70% believe the community of migrants from those areas
would use a community center geared toward them, while only 10% do not. There does
appear to be a strong need for a center to provide the kind of training that could help
improve employment prospects and increase the quality of transnational life. For
instance, only 10% of migrants reported being familiar with a computer while 70% said
they were not, and just 10% reported knowing how to use the Internet and email while
80% said they did not. Given this, it is unsurprising that, when asked their opinion of the
most-needed community services, respondents gave computer classes as the second-
most-common answer. Forty percent of migrants agree that such courses are urgently
necessary. The only more common response was English classes, which 50% of
migrants said were much needed. This, too, is unsurprising given the answers about
English competency examined earlier.
In sum, our data paint a picture of difficult transnational life. Incomes are low in
New York and, among the few who earn them, low in Mexico as well. Remittances
represent a very high percentage of incomes among both senders in the US and recipients
in Guerrero, and families receiving remittances use them for a wide variety of basic
needs. It is also clear that migrants in New York have high expenses to pay out of low
incomes out of which remittances often take a significant bite. Lastly, there is strong
desire and need for a community center to provide training for members of transnational
families, provide remittance services at a low fee, and fund development projects in the
sending and receiving communities.

Theoretical Framework

Earlier models looking at the issue of migrant labor limited their focus to the
understanding of how immigrants assimilated into the United States. Others understand
migration as formation of foreign communities inside the United States. Lately there has
been a slight inclination in seeing ethnic enclaves in the US as colonies of foreigners. The
underlying model in our study is that of local, yet binational, mini-communities with
households divided across borders depending economically and psychologically on their
transnational relationships. The present trend suggests that these dynamics will continue
in the next couple of decades since migration is now part of the community life and social
imagination of people in la Montaña. Precedents for transnational life exist in past eras
of migration (Smith, 2001; 2003, 2005; Foner 1997, 2002).

7
http://stats.bls.gov/ro2/ce9805.htm

Page 16 of 36
 The local reality as well as the larger contexts addressing social, economic,
cultural, and demographic processes that take place within nations, as well as those
transcending them, need to be addressed. According to the world systems theory
(Wallerstein, 1984, Friedman-Kasaba, 1996), global capitalism maintains a world-system
that organizes nations into unequal relations. A large structural linkage between sending
and receiving countries is exemplified by migration. The unequal and asymmetrical
nature of the migration creates the distinct categories of either elite expats -- students,
professionals, artists or investors living abroad -- or “illegal aliens” working at the lower
salaries and without any social guarantees. Inequality shapes the experiences of migrants
defining their social position in institutions and societies. Migrants are integral parts in
the system and are part of a continual circulation of capital and labor resources between a
dominant core and a dependent periphery. In the case of Mexican migration, Mexicans
continue to migrate to the economically powerful United States, filling a huge labor
demand for low wage labor, most specifically in restaurants, sweatshops and agriculture.
This new era of globalization, with incremental technological innovations,
changes how migrants negotiate relationships in both sending and receiving countries.
New theoretical models of transnational practices have been proposed which attempt to
understand how links between countries are both created and maintained. While migrants
are accepting and negotiating American norms, learning to navigate the system in their
host communities, imitating local practices or “assimilating”, they are also maintaining
strong contacts in their home countries. This was also common to Italian and Polish
migrants into the United States and the beginning of the Twentieth Century (Smith, 2003;
2000).
Transnationalism as a concept is used widely, with varying definitions. In the
broadest sense it is the movement of people, capital, corporations, and ideas across
political borders. While some see the transnational as a deterritorialized space, where
migrants “are neither here nor there”, nor part of a nation-state which is weakening and
becoming irrelevant (Appadurai, 1996; Glick-Schiller, et al, 1992); others see it as
regular movement and communication across existing and relevant nation-states whose
governments and their policies have a real impact on migrants (Guarnizo and Smith,
1998, Massey, 2003, R. Smith, 2005).
The first widely recognized work to provide a transnational perspective on
migration was that of Nina Glick-Schiller and colleagues (Glick-Schiller, Basch,
Szanton-Blanc, 1995), who define it as the process by which transmigrants “forge and
sustain multi-stranded social relations that link together their societies of origin and
settlement, building social fields that cross geographic, cultural and political borders”
(1995: 6). Robert C. Smith, uses transnational life, as “embodied in identities and social
structures that help form the life world of immigrants or their children, and is constructed
in relations between people, institutions and places” (Smith, 2005: 5).
While the nation-state has been analyzed in fostering transnationalism (Glick-
Schiller and Fouron, 1998; Mahler, 1998; Smith, 1998), the formation of institutions has
also contributed to this process. Transnational institutions such as the family (Basch, et
al, 1994), networks (Rouse, 1991), community organizations such as hometown
associations (Smith, 1998), political groups (Glick-Schiller and Fouron, 1998), or
business enterprises (Ong, 1999) have been examined. By creating transnational families
and home town associations and situating themselves in “transnational social fields”,

Page 17 of 36
 Salaried Workers in Mexico per Family in
Mexico

25

20

15
Number of
Families 10

0
4 3 2 1 0
Number of Salaried Workers

migrants counteract their marginal status in the host country. For example, they benefit
from their higher social status in the sending communities as well as from their higher
salaries and increased purchasing power (Goldring, 1998).
Some dimensions of the transnational phenomenon have been well explicated on
the political side, and a great deal of work has been done on the social and cultural levels

Remitting Migrants in US per Family in

Mexico

25

20

15
Number of
Families 10

0
4 3 2 1 0
Number of Remitting Migrants

of transnational practices, both in macro level studies, as well as in micro level studies.
However, little work has been done that explicates transnational economies at the local
household level. While there have been studies on the volume of remittances and
remittance behaviors, our study looks at new dimensions of transnational behavior. It
looks at the social articulation of local transnational economies, as well as the creation of
social institutions that stimulate mechanisms to translate this money into productive,
constructive, community-based uses. We are both studying a reality and attempting to
positively change it by informing new institutions such as No Borders who could channel
emerging and existing transnational realities into opportunities for development.

Page 18 of 36
Theory Testing

Our findings support the theories that view migration as a socially embedded
institution where networks and social capital for an incredible resource that reduces the
risks and cost of migration. Migration from Guerrero to New York has an important
economic component due to the lack of opportunities and jobs in la Montaña but this is
not a purely economic issue since it also involves ideology, increased expectations,
changes in the economic status of the reference group and cultural influence that makes
the decision to migrate not a rational individual decision but an available repertoire to use
in order to increase the household income and therefore its purchasing power at the cost
of illegal migration and hard working hours in a different alien community.
Contrasting with migration theories which underline permanent migration and
assimilation we found that migration from Guerrero to New York is seen by migrants
themselves as temporal and basically an available strategy used by the male heads of the
household in order to increase the family’s capital as the new economics of migration
theory proposes. According to our interviews migrants plan to go to the US for some
years and save money, to build a house, buy a taxi, or open a small business. But because
their expenses in New York are high, their incomes relatively low and since their family
depends on their remittances to survive they have little money to save.
Once a family starts receiving remittances they may stop or reduce their time
working in Mexico doing so only to complement the household income but heavily
relying on money sent from the US. Once remittances start flowing in important amounts
along with gifts for the children in order to compensate for the absence of the father or
both parents, the family experiments an increase in its standard of life and expectations
and gets used to wear American clothes and shoes increasing household expenditure.
All this creates a vicious cycle of dependence on remittances which is hard to
break. The divided households emotionally suffer their physical separation and wish for
reunion but due to the increased patrolling of the border, sporadic visits become harder,
more expensive and risky for undocumented migrants so they may opt for making other
members of their family, especially those in working age, come and join them in the US
(Massey, Durand and Malone, 2003).
So what started as a socially available strategy for household income
diversification many times ends up in permanent or long term migration since once the
family increases its level of expenditure it is hard to go back and sustain that standard of
living with all members of the family in Mexico, especially if they have not gained access
to a stable source of income in their rural underdeveloped communities in Mexico, where
political and economic monopolies exits and which may make some people move into
illegal activities in order to get access to fast cash. Gambling, cockfights, the church,
organizing local festivities, drug production and smuggling along with smuggling of
people are some available substitutes for labor family remittances.

Engagement with Migration Theory

In Guerrero we identified five kinds of households, with the first three being more
numerous than the last two. First, there are wives in Guerrero raising their children while
their husbands remit money from New York. Second, there are grandparents in Guerrero

Page 19 of 36
raising the grandchildren while the children’s parents are both in New York remitting
money. And thirdly and less often, there are complete nuclear families in Guerrero who
receive money from parents’ brothers or sisters or from other relatives. This is important
since it shows a division of labor that still assigns the main responsibility and role of
breadwinner to the male house head. The fourth case is that of the male worker who has
stopped sending remittances because his immediate family has joined him in New York.
A fifth and tragic case is that where the husband stops sending remittances because he:
finds a different woman in New York; or gets into a gang; or into drugs and gets sick or
imprisoned; or dies in an accident, leaving the family in Mexico in desperate straits.
The findings from the team’s data collection reveal a wealth of information about
transnational economic life but also about patterns, mechanisms, motivations and causes
for migration. For example, Mexico appears to be the preferred location to raise children.
The quality of life is always an important preference, especially that of children, the old
and women. And that is why parents prefer to raise their children in Mexico even if they
are in the US and this also why we found so many old “retired migrants” in Huamuxtitlan
who come back to enjoy life after they are longer working.
If both nuclear and extended family members are in the US, they financially
support the education of children in Mexico. While the public education system is free in
Mexico, there are significant expenses incurred for enrollment, uniforms and materials
such as books. Tlapa is home to universities and schools; with sixty preschools, eighty
two primary schools, thirteen ‘secundarias’ (middle school), five high schools, and three
higher education institutions: a teacher training college, a technical institute and the
national pedagogy university. But most migrants could not, for economic reasons,
participate in these institutions. They attempt, through their remittances, to make more
education possible for their children.
There is a gender distinction in transnational behavior. Women migrants in the
US communicate more often with their families in Mexico as well as send money with
more regularity. On the Mexico side women typically collect the remittance money and
spend that money.
Indigenous populations who still recognize themselves as such or are so
recognized have it especially hard both in Mexico and in New York. It is harder for them
to get access to the capital necessary to migrate, and these migrants often have a harder
time adjusting to life in the US. Many times their Spanish is limited. We interviewed
immigrants whose first languages were Tlapaneco, Mixteco or Nahuatl and who are
spatially segregated in Mexico and in New York. They earn even less than other
Guerrerenses in New York according to our interviews. These populations are
marginalized in both places.

Communications and Technology

The literature on transnationalism and globalization often treats new technologies

such as the internet as causes of and intimate parts of transnational life. But there has
been relatively little documentation of how the internet and other new technologies
actually affect transnational life among migrants. Some academics seems to be drawing
on their own experience more than that of most migrants in assessing the use of these
technologies.

Page 20 of 36
 These new technologies also offer a promise for disenfranchised migrant
communities, which are transnational not because of their peculiarly assertive use of
technology but because of their constant mental reference to two locations and their
sending back and of forth of what Peggy Levitt (2001) calls social remittances (that is
habits, values, created needs and expectations brought from one country to another). But
we can conclude that access to such very modern technologies is not an integral part of
the experience of transnational life for most of our informants, most of whose families in
Mexico did not have a computer or even a telephone in the house.
Nearly all transnational families communicate by phone with each other across
national borders; all of the families except one cited this as their method of
communication with migrants, using commercial telephone calling facilities. Additionally
we found a burgeoning communication and technology infrastructure in Guerrero. In the
region, telephone service as well as Internet capability is available. However, access is
limited to certain populations and is not well integrated with other kinds of institutions,
such as financial services institutions.
Communications costs are high for migrants and consume a significant share of
their incomes. While the pre-paid telephone cards from independent companies have
pushed down the rate of calls, the lack of infrastructure in the migrant-originating
Mexican towns and the practical monopoly of Mexican TELMEX make communications
a luxury for the immigrants’ families. Appropriate and fairly priced communications are
lacking for Mexican immigrants. There is an importance niche for new companies and
for internet penetration to provide better and cheaper services. No Borders could play a
key role in serving this niche.
There are some internet cafes already operating in the area. However, these are
mainly used by elementary school students to type their homework or look for
information on the internet. They like to chat but with random people or local friends
more that with their parents in the United States. The Internet cafes did not look
especially profitable since the demand was limited and the prices had to be low, only a
few pesos for each hour long session. An initiative worth mentioning is E-Mexico, a
federally funded program to give computer literacy classes for free to anyone in the
village and to offer some hours a day of free internet consulting. This program is directed
by the Ministry of Education (Secretaría de Educación Pública). Hence, there appears
to be more latent than utilized internet capacity, but even this capacity is deployed
without a larger vision of how to integrate it with larger institutions in the US and
Mexico. No Borders would fill a key role if it could do this.
Telephone calls are the most widely used form of communication by the migrants.
Those who live in New York City call their families and friends from either phones in
their own homes, or most usually from pay phones. Even if a telephone is used from a
private home, a telephone card was used by all of the respondents as it is the most cost-
effective way to call Mexico. For example, a five dollar telephone card will allow an
individual to call Mexico for about one hour.
About half of the families in Mexico had telephones in their homes and received
the calls there. However, due to the high cost of long distance calling in Mexico, they all
received their calls from those in New York City. Most respondents received calls from
relatives once every two weeks, some on a weekly basis. A calling routine was common,
as the families set up schedules for their calls, usually on the weekends.

Page 21 of 36
 For those in Mexico who do not have telephones in their homes, a community
telephone center was the way they received their calls. In many of the small villages,
telephone service is not available, or the costs are prohibitive. Thus, the New York City
migrant calls the center and through a loud speaker, the family member is summoned.
Or, by way of the aforementioned calling schedule, the family member is there, waiting
to receive the call.
An additional communication vehicle is through the indigenous community radio
station which broadcasts messages in the various indigenous languages of the region. An
average of five New York City migrants call the radio station in Tlapa daily and have
their messages broadcast over the radio waves in either Nahuatl, Mixteco, or Tlapaneco.8
Many of the small remote indigenous villages have neither home telephone service, nor a
community telephone center. These messages are broadcast from 2-3pm, during the
afternoon meal time, when large numbers of the community are listening. The majority
of the messages are to alert family members of when and where to receive telephone
calls, but others may concern the health status of a certain individual, or general goodwill
greetings.
Within the region, computer technology is growing. While very few people have
computers in their own homes, there are many Internet cafes, which offer not only
Internet services, but word processing as well. In Tlapa, high speed satellite connectivity
was available, however in other areas, such as Huamuxtitlan, it was not available and the
dialup service was very slow. It was not uncommon to see youth using these services for
both recreation as well as academic purposes. Several used the computers for homework
and many played computer games as well as sent email for entertainment. Most of the
adults do not have access or an interest in computer technology; however they
acknowledged that it was important for the youth to learn these skills. And most of them
expressed curiosity and interest in learning computer skills but they mentioned that they
working schedules make this difficult.
There are strong indications of early and advanced technology adoption by
children in Huamuxtitlan, who were using internet cafes for advanced uses such as instant
messaging, networked gaming and homework research. And we did meet at least one
child, who recently returned to Mexico with his family, who communicates with his
friends in NYC using the internet. All this suggests a knowledge base for future
technology use and a niche in young people for No Borders.
Paradoxically information technology training has the danger of educating for
migration. This is so because it could teach the skills that are in demand elsewhere; such
outmigration could hinder the potential for economic development through local IT. IT
builds skills in productivity tools (Excel for accounting, Word, MS, Access) which may
improve efficiencies and productivity. Another option would be outsourcing, as in the
case of communities in India, Argentina, Cuba, and Eastern Europe where labor is
available, cheap and highly skilled in computer use. This kind of local level development
may slow migration or even cause the return of migrants but this would hardly happen by
itself. It would need a coordinated effort by the government, transnational companies and
organizations such as No Borders.
Within the community, technology education is a growing industry. Both public
8
Information obtained from conversations with the director of the radio station, listeners and by listening to
the station ourselves.

Page 22 of 36
as well as private initiatives have started computer classes in the Mixcteca. The public e-
Mexico community center, opened in April 2003, offers two hours of open computer
access as well as classes in Microsoft Word and Internet navigation, with no charge to the
community. Though it would appear that E-Mexico is not sustainable in economic terms,
it does have the support of a federal ministry offering a service worth subsidizing. One of
the advantages of the private sector internet schools is that a profitable business can
attract better qualified teachers.
Additionally, Enlaces, a private company, opened in October 2003, offers similar
activities in Microsoft Word. For a fee, daily courses, which last one month, are offered
both in the morning and the afternoons. However, in March 2004 they still did not have
Internet access, as they did not have a working server. If No Borders can guarantee
quality service, it would be the leading communications center in the region. The main
challenge would be how to manage this service with the main partner abroad, partnering
with locals will be necessary but the close family structure nets and the cultural priorities
may make a badly managed establishment hardly profitable.

Feasibility

It is important to recognize that efforts to use remittances as a source of local

development are neither new nor unique. Two ongoing operations confirm that the
objectives of No Borders are feasible. One is the work of the Mexican Association of
Credit Unions of the Social Sector (AMUCSS). AMUCSS is a nonprofit organization
based in Mexico City that has started a major effort to reach remote communities in the
states of Puebla, Oaxaca and Guerrero to promote the establishment of financial
institutions at the community level known as microbanks. The program has been funded
by organizations such as the Ford Foundation. The objective of the microbanks is to
foster savings and offer credits with low interest rates. Basically, these microbanks start
from nothing. Staff hired and trained by AMUCSS arrive in towns and set up informal
meetings with the locals looking to attract community leaders, especially women, who
according to AMUCSS, are the ones who manage the money at the household level. After
explaining the project, AMUCSS establishes a local committee for follow-up. With
efficient work and adequate levels of participation of the community, microbanks can be
created in a matter of weeks. To assure credibility, cooperation with people in the
community is done and the funds in the accounts have a centralized back up to avoid
frauds. A person with a good reputation in the community is hired to manage the
operations of the microbank. At that point, AMUCSS slowly removes itself from the
operations and serves as provider of training for managers and users. Then there is a
period of monitoring by the nonprofit to ensure continuity and proper decisions by the
managers as well as the reception of feedback by the locals. AMUCSS has witnessed the
success of this program, especially where there is a high rate of migration to the U.S., as
in Santa Ana del Valle, Oaxaca, where the microbank is today an exemplary institution
that has contributed to the local economy. It has been concluded by AMUCSS that
remittances sent to Santa Ana del Valle are being saved and basically sustain the
microbank. This experience confirms that access to financial institutions and provision of
financial literacy can help foster local economic development.

Page 23 of 36
 On the other hand, remittances are used to foster local development in the state of
Puebla by Fondo 5 de Mayo. This nonprofit organization started in 1999 with the purpose
of capturing the profits of transferring remittances and using those profits to start social
projects in the region. Fondo 5 de Mayo has made deals with money transfer companies
and agents in New York such as Delgado Travel and Money Gram to capture remittances
sent by Mexicans to New York to towns in Puebla. Fondo 5 de Mayo delivers the money
through its 11 offices in Mexico charging the same fees as any other agent would do. In
other words, the nonprofit charges the market price. However, due to the volume of
transactions, Fondo 5 de Mayo gets a better rate from the money transfer companies and
the difference is used to start a social fund for the community. This fund is allocated
according to the number of transactions and amount of money sent to each community
and is used to start productive projects, build infrastructure, provide capacity building and
training and offer microcredits. Therefore there is a tremendous potential for the towns in
Guerrero to see material improvement in their social projects and quality of life if the
remittances are channeled correctly to productive projects.
No Borders has expressed interest in education and use of technology and
communications in New York targeting the Mexican community as part of their projects
to enhance quality of life of migrants and developing transnational household economies.
Another example worth mention is the Harlem Center for Education, a long term, highly
recognized community center in East Harlem, near a concentration of Guerrereneses. The
center’s objective is to encourage 19 year old and older African-Americans and Hispanics
to continue studying by offering free classes on ESOL, GED preparation, computer skills,
math tutoring, essay writing, college course tutoring, SAT preparation and TOEFL
preparation. Besides the classes, the center’s staff also provides individual counseling.
The site was opened on November 2002 and is part of a larger network that
started in 1968. The center is funded by the Federal government. Up to now, it has served
around 500 students. The outreach is done by attending churches services and gatherings,
parties, dances, restaurants, schools and nonprofits. Students of the center usually spread
the word and invite more people to come. A key part of the success of the center is the
partnerships that have been developed with schools, community colleges and universities.
Regarding the Mexican community, the center serves some second generation
Mexicans but only a few undocumented migrants. The main reason is that they are
funded by the government and theoretically they are only allowed to help citizens,
residents or people that are in the process of receiving their documentation. Nevertheless
in reality they try to accommodate any undocumented immigrant that approaches the
center, keeping them sometimes off the record or using any form of ID that they may
present. However, every time that an undocumented immigrant approaches, they are
hesitant to fill in a registration form that asks for address, SSN, tax ID and other personal
info. Even when the staff tries to make them feel comfortable, Mexicans are very afraid
and most of the time don’t come back. However, the few Mexicans that stay are very
dedicated and usually finish the program. It seems that there is a need for education in the
community but that Mexican migrants do not trust institutions like the Harlem Center of
Education.
Regarding use of technology, Melissa Nieves, coordinator of the center, said that
there is a high demand for computer skills classes at the center. They even have to
perform a lottery because they can’t provide the service to everybody. She believes that it

Page 24 of 36
is caused by the current culture of technology in the US. From previous experience, she
knows that there is a lot of investment in PCs and computer related products in the low
end Hispanic community.
These cases show that No Borders has a tremendous potential to leverage and
utilize the resources available from transnational household economies. By pursuing
further research, investing in the recommendations made and taking the examples offered
of other institutions as models, No Borders has the opportunity to create a system that can
use remittances and education to enhance the quality of life of Mexicans in New York
and their relatives in Mexico not only at the macro level but at the heart of the
transnational household economies that were studied.

Implications and Recommendations for No Borders

Migration between Mexico and the United States is a reality, and migration between
Guerrero and New York City is increasing. As the research shows, remittances are being
sent by the majority of households in New York to their families in Mexico and are being
used mostly for immediate basic household necessities and not for long term investment.
In order for the remittances to be used effectively for sustainable long term, community
development in both Guerrero and New York City we recommend the following:

1. Foster educational and training efforts in savings and investment activities.

A significant part of the financial problems of transnational household economies
stems from the lack of corresponding financial institutions. Immigrants in the US
are, de facto, often shut out of the financial system, while their families in Mexico
similarly are shut out. But there is an articulated, local transnational system
created by the families earning money in New York and remitting it to Mexuc,
where is supports local life. Given its understanding of this local, transnational
system, No Borders could play a key role in institutionalizing such links,
enabling migrants and their families to both keep more of the value of their
remittances, and contribute to community development projects in the process.

2. Encourage the creation of accessible financial institutions to foster savings.

Once such financial institutions are place, immigrants and their families would
need to be taught how to use them and what the benefits of such use would be.
Beneficial services would be to teach savings and investment strategies, including
those linked to long-term investment in business, home ownership, and others.

3. Explore the uses of technology to enhance the remittance and communication

activities.
Since there is a growing technology infrastructure available in the area, this must
be used to help facilitate the transfer of remittances more effectively. Computer
use and knowledge can be an avenue for this transfer as well as an opportunity to
explore telephony, lowering the costs for both. An important next step for No
Borders will be to do a census of the existing private and public capacity in the
area, including not only the existence of computer with access to the internet, but

Page 25 of 36
 their potential for other uses, and the dispositions of their owners (such as owners
of small private businesses renting web access by the hour) towards working with
No Borders.

4. Allocation of some profits to productive, community based projects.

As per No Borders original plan, it is anticipated that its contributions towards
community based projects as part of its general procedural operations will both
engender good will among the client population, and support the long term use of No
Borders services through greater economic activity, which No Borders and partner
institutions would support and be part of.

No Borders has a tremendous potential to leverage and utilize the resources

available. By utilizing a technology platform to send remittances, No Borders has the
opportunity to not only lower the costs of sending remittances to Mexico, but also
providing financial educational opportunities as well as creating long term
productive, community based projects in both communities.

Further research

Financial Access and Literacy

We found that the majority of families do not manage their household economies
within formal financial systems. While they are quite aware of how much money they
have and what their expenses are, there is little left over for savings or investment. Lack
of access to the financial system and low earnings are the primary causes of this situation.
Were No Borders able to decrease the considerable expenditures they spend on
communications and remittances, and to offer financial institutional services, it could
help change this situation. Financial literacy classes would be an important part of the
services offered.

Technology Education

There is a burgeoning infrastructure and knowledge base of basic technology

skills among youth in Mexico and in New York, but there is very low technology
penetration in households in New York and Mexico. Research should be undertaken into
how these groups can get inexpensive, high-quality computer access and internet
connectivity. Capacity building would be served by appropriate education in technology
use and skills particularly for the young who represent the future of these communities.
In the short term particular attention should be paid to educating women who are
overwhelmingly those that receive remittances and manage household economies.

Gender Aspects of Migration

Female migration to New York from Guerrero is increasing. Women tend to

administer household budgets including remittances, expenditures and other revenue

Page 26 of 36
sources. Further research should study the changing community and familial roles on
Mexico migrant towns due to the large exodus of men and boys and their change in
activities and behavior once they reach the US.

Indigenous Migration

There is a significant increase in migration from small mountain villages whose

people are more likely to speak indigenous languages, in lieu of or in addition to Spanish.
Further research should be directed at what proportion this sub-group makes up in the
Mexican migrant population and whether the household economies of these sub-groups
are comparable with the non-indigenous Mexican migrant groups. Having more
information on these issues would advance research on migration and also allow No
Borders to better understand its target market and possible cultural challenges.

Conclusion

The concept of transnational household economies captures both the economic

and familial dimensions of social life and practices linking Guerrerenses in New York
and the Mixteca. Our goal in this study has been to report the characteristics of
transnational household economies at the local level and the needs of the Mexicans in
New York with the aim of recommending for No Borders specific approaches to enhance
local development in Mexican migrants´ hometowns and the community in New York.
No Borders faces a potentially large market, even if it is organized as a series of
small, local, transnational markets, linking, for example, particular places in New York
with particular places in Mexico and in the Mixteca. The numbers at the macro level are
staggering. If 750,000 Mexicans in and around New York send around U.S. $3500 per
year as our research indicates, there is a maximum of more than 2.5 billion dollars sent
annually in remittances to the Mexican states linked with New York. Due to lack of
information, it is impossible to know at this point how many Guerrerenses are in New
York and how much is sent by them as a community. But approximate numbers get an
interesting picture. If 5% of the Mexican population in New York is from our target area
in Guerrero, there is more than 125 million dollars being sent to Tlapa and its
surroundings every year. (According to PROFECO Guerrero received 326 million dollars
in remittances in 2003.)
Given that most of the money is used for direct consumption, let’s assume that
20% could be saved and used for productive investments. Then more than 25 million
dollars per year could be used for these purposes. At the micro level, households would
be able to save money for emergencies, invest in sustainable micro businesses, form
cooperatives, get credit with fare rates, and assure economic stability and security in the
long term besides enhance the level of education and use of technology.
Migration from Guerrero to New York is growing. This continued growth, and
the local potential of the infrastructure in Guerrero and in New York, make it a great case
for further study, and for piloting a business endeavor such as No Borders.

Page 27 of 36
Appendix I

Methodology

In recent years, the North America Integration and Development (NAID) Center
at UCLA performed a series of studies in household economies of Mexican immigrants
in California. These studies showed the importance of remittances, financial services and
electronic connectivity between communities of origin and destiny for local development
(Hinojosa, 2003). No Borders, a private enterprise based in California, was created with
the mission of offering lower cost communications and remittances and other services,
while also facilitating economic and community development in New York and Mexico.
No Borders started last year a series of alliances with for-profit and not-for-profit
institutions in Mexico to start implementing programs aiming for local development
based on the results of the UCLA study.
New York was chosen as one of the study demonstration sites, and a research
project was organized under the direction of Prof. Robert Smith of Barnard College.
SIPA students Adrian Franco, Charles Landow, and John Coffey took a SIPA workshop
to pursue this project. Ph.D. students Leslie Martino and Ernesto Castaneda took
independent studies with Smith to do this work, and intend to use it as their dissertation
research. The goal was to write a paper that would engage the literature on transnational
life, and be part of the NAIDS center’s on-going work on North American integration,
and help orient No Borders in its pursuit of its business plan. The students and Smith met
weekly to work on the project, and students were actively engaged in all steps in such pf
the research project: designing and refining a questionnaire, ethnographic engagement
and development of ethnographic relationships, data entry, analysis of quantitative and
qualitative data. The report was drafted by the students and revised in response to Smith’s
comments. Smith then reviewed and refined the paper prior to submission.
This study of the transnational household economies aims to understand the
economic circumstances and strategies of the transnational family. We define the
transnational household as that composed by members both in New York and in Guerrero
which as part of a transnational nuclear or extended family sharing a household, or a set
of continuous ones, share incomes. Our study will contribute with the study of families
who are split between two countries, a topic that has received less attention than it merits
in the scholarly literature.
Based on surveys designed by students at UCLA working on a similar project in
Oaxaca and LA, we designed a survey asking socio-demographic questions, and seeking
information about the sources and amounts of household income, including remittances,
as well as the family expenditures throughout the year both in Mexico and in New York.
These "ethnosurverys" (see Massey, et al 1987, 2001) called this since they
combine both closed questions with quantifiable answers while also giving opportunity
for more open and detailed follow up questions and comments. The completion of
detailed surveys by members of transnational families in New York and Guerrero seek to
generate quantifiable data about the characteristics about the transnational household
economies and also ethnographic field notes. So far, team members have interviewed
about 60 persons in Guerrero during two field visits and about 12 persons in New York.

Page 28 of 36
Informal keep up work has been done by Castañeda and Marino and it is possible that
more surveys in New York will be conducted in the future.
Participant observation and opened ended interviews with people who answered
the surveys and with other members of the communities both with and without family
members aboard allow us to learn more deep information about the social and financial
habits of the transnational families.
Simultaneously using these qualitative and quantitative approaches has helped the
team gain insight into the local workings and institutions of the transnational household
economy, and even the binational economy in general. It also offers insight into the
potential for the development of productive projects and new linkages that could come
from the construction of new institutions.
In both surveys, the first topics are family demographics. They ask about the age,
educational level, occupation, sex, and other characteristics of family members in New
York and Guerrero. They then move on to questions of jobs and income, asking how
many salaried workers the families have in both places, how much they earn, and how
many jobs they have had at one time. In New York, the survey next inquires about
detailed remittance behavior to generate the kind of data explained in the section on
survey results below. Migrants are asked how often they remit money, to whom, how
much they generally send, and through what agency or office in New York. If they
remember, they are then asked how much they pay to remit and a set of questions about
the agency they use: is it the cheapest and fastest? Does the staff speak Spanish, is the
service satisfactory? These along with other similar questions are asked of all. The New
York survey also asked detailed questions about other financial behaviors, such as
whether respondents have ever applied for savings or checking accounts, bank loans, or
credit cards, whether they have any savings, and whether they have loaned money to
someone recently.
In Guerrero, on the other hand, family members are asked if they receive
remittances from relatives in New York and, if they do, how much and how often. They
are also asked who, if anyone, in the household in Mexico has a salaried job, and if
someone does, what they do and how much they earn. After general questions about
whether the families own any land and similar items, the survey asks about household
purchases and expenses in detail. Team members inquire about purchases made on
household items in the past year, including such things as furniture, kitchen equipment,
clothing, and electronics. They then ask about food expenses, trying to determine the
family’s weekly food budget on staples ranging from tortillas and corn to fruits and soda.
Finally, the survey asks in detail about other expenses for things such as school materials
and uniforms, local fiestas and festivities, and medicine, visits to the doctor, and hospital
stays for all family members.
Both the New York and Mexico ethnosurveys also ask respondents about how
often they communicate with the family members in the other country. The New York
survey goes into much more detail on this question, reflecting the desire of No Borders to
learn about the market for communications in the transnational community. Team
members have asked migrants how they call their families at home (for instance, with
pre-paid cards, AT&T, or an internet-based service), how often they do so, and how
much they spend. They are also asked for their feelings about a possible community
center and what services it should offer. They survey gauges these feelings with a series

Page 29 of 36
of questions listing different topics, ranging from English classes to job training to legal
assistance, with respondents asked to say whether they believe the community would find
each service useful. We simplified the original ethnosurveys used by the UCLA group
while we added specific questions on communications, computer and internet use and
levels of education.
With such a broad range of questions, the two ethnosurveys help fulfill the
multiple goals of this project, orienting No Borders in its business strategy while
contributing to the literature on migration. In this study we are talking about the initial
stages of a temporal migration from the region of “La Montaña” in Guerrero to the New
York urban area adding data regarding the transnational household economies.
Regarding the preliminary numerical values reported in this paper, it is important
to note their limitations. They were obtained from snowball and convenience samples.
The populations are selected in advance and the small sample size is not big enough to
allow for generalization. The numbers and charts provided are given as a way to
exemplify our theoretical and ethnographic findings and to provide at the same time
specific figures based on real transnational household financial data.
These ethnosurveys give us specific income-outcome data regarding multi-
household economies deep and good enough to calculate the impact that institutions such
as No Borders could have in the nature of the transnational life and the incomes and uses
of transitional incomes and transactions.

Page 30 of 36
Appendix II

New York Expenditure Overall

http://stats.bls.gov/ro2/ce9805.htm

NYLS - 7123 Labor - New York

5/12/03
Table 1. Average annual expenditures, United States average and
selected large metropolitan areas,
Consumer Expenditure Survey, 2000-01

United
Item States
San Washington
Average New York
Boston Chicago Los Angeles Francisco D.C.

Average annual expenditures $38,796 $48,237

$37,740 $47,042 $45,227 $56,112 $48,192

Food 5,240 6,408

5,297 5,688 5,737 6,966 5,545
Food at home 3,053 3,740
3,111 3,230 3,207 3,902 2,876

Food away from home 2,186 2,669

2,186 2,458 2,529 3,064 2,669

Alcoholic beverages 360 450

389 431 412 744 434

Housing 12,666 17,893

13,754 16,937 17,106 20,877 17,973
Shelter 7,359 11,624
8,889 10,334 10,975 13,795 11,245
Owned dwellings 4,791 7,180
5,308 7,291 6,591 8,351 7,607
Rented dwellings 2,084 3,763
3,006 2,081 3,829 4,671 2,590
Other lodging 483 681
575 962 555 772 1,047
Utilities, fuels, and public services 2,628 2,885
2,566 3,130 2,500 2,548 2,864
Household operations 680 1,084
671 925 1,082 1,465 1,104
Housekeeping supplies 496 542
395 590 468 575 497
Household furnishings and equipment 1,503 1,757
1,233 1,958 2,080 2,494 2,263

Apparel and services 1,799 3,000

1,698 2,539 2,066 2,775 1,998

Transportation 7,526 7,295

6,342 8,189 8,104 9,492 7,647

Page 31 of 36
 Public transportation 413 977
536 820 530 932 861

Health care 2,124 2,128

1,983 2,136 1,905 2,170 2,285

Entertainment 1,909 2,183

1,754 2,317 1,968 2,383 3,033

Personal care products and services 524 656

455 612 622 612 632

Reading 144 195

193 158 148 266 205

Education 640 974

894 1,019 721 1,086 599

Tobacco products and smoking supplies 313 289

369 315 194 224 201

Miscellaneous 763 1,317

556 899 996 1,000 917

Cash contributions 1,237 1,353

666 2,211 1,172 1,486 1,419

Personal insurance and pensions 3,552 4,097

3,388 3,591 4,077 6,031 5,304
*Components of income and taxes are derived from "complete income
reporters" only.

Page 32 of 36
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ENDNOTES
i
The only other Latino group to have a nominal drop was Colombians, whose per capita incomes
dropped 3.4%; Dominican incomes increased 11.7%, Puerto Rican incomes increased 6.4%, and
Ecuadoran incomes increased 14.5%.
ii
. Cohort analysis considers the same category of people in two different Census data sets, here
1980 and 1990, enabling one to disaggregate between Mexican and Mexican American
populations, subject to the risk that excessive mobility or morbidity will affect the assumption
that one gets data on the same people. But I agree with Myers (1997, 1999) that it is preferable to
the static methods normally used.
iii
Smith thanks Joe Salvo and Peter Lobo, NYC Planning Department for sharing these data.
iv
These data are from Rivera-Batiz, 2003.
v
Meyers and Cranston, 1997; Meyers, 1998; Moss and Tilly, 1995.

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