Construction slump hits the Latino home, here and there

What's Happening

* Immigrant Latino laborers hit by slumping housing construction are working less. As a result, they have less money to spend on themselves and to send to relatives in their home countries.
* Construction has slowed because it has gotten harder for homebuyers and developers to get credit in the wake of the meltdown in the subprime mortgage market.
* About 500,000 Latino immigrant construction workers lost their jobs in 2006, economists at Deutsche Bank estimate (Wall Street Journal 8.29.07). It’s a heavily Hispanic industry: Latinos, both legal and undocumented, make up 25%, or 2.9 million, of the 11.8 million workers in the U.S. construction industry, according to the Pew Hispanic Center. About three quarters of them are born outside the United States.
* With the slowdown comes less income to spend on day-to-day expenses. Minyard Food Stores, which operates Carnival Latino-oriented grocery stores in the Dallas-Fort Worth area, recorded lower sales gains in early 2007, attributed to wet weather that cut into construction hours and limited the income of many Carnival shoppers.
* Most critically, it has contributed to declines in remittances to Mexico. In May 2007, Mexican immigrants sent $2.2 billion to Mexico, a 5.8% drop compared with the same month in 2006, according to the Banco de México (Houston Chronicle 8.19.07). And in June 2007, Mexicans sent $2 billion home, a 3.5% drop from June 2006.

WHAT THIS MEANS TO BUSINESS

* When an industry that is heavily dependent on Latinos begins to suffer hard times, it has an economic impact that extends past U.S. borders.
* Sales of U.S. businesses that cater to Hispanic-dominant immigrant Latinos stand to take a hit when their disposable income shrinks.
* When Latinos in the U.S. have less to spend in U.S. stores, Mexicans have less to spend in Mexican stores.

Source: Iconoculture, 9/7/07