The amount is in January of each year remittances that Mexicans send – mainly from U.S– is usually lower, as a seasonal effect after the Holiday in December. However, there may be an exception in 2021 as the remittances are expected to surprise and rebound as a result of the momentum of the second aid package received by thousands of families in that country to overcome the crisis of the COVID-19.
This benefit was shipped to US households in late December and early this month. A family of four received $ 2,400, or $ 600 for each person.
Mexican permanent resident workers and undocumented migrants were included, who, despite not having citizenship, benefited by paying taxes. This gave them the opportunity to send more money to Mexico.
The foregoing, amid the post-election uncertainty following former President Donald Trump’s calls for the triumph of Joe Biden.
Also read: Despite the pandemic, the record of remittances was broken; 11.3% up: AMLO
Evolution
Since 2017, January is no longer weak for remittances because of the “Trump effect”. Afraid of massive deportations The government promoted shipments as a form of preventive savings.
This was reflected in the amount raised in the first month of 2017, which jumped from $ 1,933 million to $ 2.55 million.
This broke the $ 2 billion barrier, creating a historical record for a comparable month.
Since then, in January, the so-called “migradollars” have remained more than $ 2 billion. In the first month of 2018, they totaled $ 2,268 million, up to $ 2,485 million in the same month of 2019, and $ 2,621 million in January last year.
They are expected to stay above those levels this month, if not reaching a new all-time high due to the momentum from the second economic stimulus from Covid-19.
Also read: Remittances, Puebla’s main economic income in times of recession: Miguel Barbosa
Second package
On December 21, 2020, leaders of the Chambers of Representatives and the Senate of the United States reached an agreement to support a new bill for one second fiscal stimulus package for $ 900 billion, with the aim of providing unemployment benefits and cash outright payments for families.
It was the second largest, after approval at the start of the pandemic, at $ 2 trillion.
It included providing a grant of $ 600 per person, half the amount of the first aid program.
The director of stock market analysis and strategy of Monex Casa de Bolsa, Carlos González Tabares, said a third of this package was used to ease the economy of households.
In an interview, he pointed out that not only will the sending of remittances be boosted, but also gross domestic product and aggregate demand, as 50% is consumption.
He noted that while January is a typically low month in terms of the amount for these flows, the last few months have been pretty good for remittances.
According to the specialist, the trend will continue to grow after the annual increase of between 10% and 11% that they would have had in 2020, of about $ 40 billion.
He felt that, with the Biden administration, the renewed environment could favor migrants to send more resources, although he estimates the growth rate will be moderate this year.
To the director of economic analysis and strategies of Finamex Casa de Bolsa, Jessica Roldan, the new economic stimulus plan proposed by Biden, for $ 1.9 trillion, will also boost remittances.
Also read: AMLO’s projection of Mexico’s growth, in line with the Treasury
Plan Biden
The new U.S. president’s program includes making direct payments to citizens of $ 1,400 and unemployment insurance benefits of $ 400 per week through September 2021.
Roldán stressed that part of the remittance support reaching households is to support remittances: “It is an issue that will certainly continue to provide some support for consumption in Mexico.”
It will also have some positive impact on the exchange rate level, which will work in favor of our economy, he said.
Biden’s immediate recovery plan must be approved by the Congress, now controlled by the Democrats, with a majority in both House of Representatives as in the Senate, where the vice president has a casting vote Kamala Harris.
Under the US bailout plan, residents married to undocumented migrants will be allowed to receive the economic stimulus payment, if they were excluded in the previous one.
The federal minimum wage is expected to rise from the current $ 7.25 an hour to $ 15 after it hasn’t shifted since 2009. This could also instill enthusiasm into money transfers.
The goal of Biden’s utility is to face the economic impact of Covid-19 on two fronts: supporting families and managing the health emergency.
The new administration will ask Congress to approve $ 20 billion to establish a national program to distribute vaccines at no cost to all residents, regardless of their immigration status. It’s also asking for $ 50 billion for rapid tests for Covid-19.
It considers $ 350 billion to provide financial assistance to state and local governments, of which $ 20 billion goes to public transportation.
In addition, it provides tax credits to employers who license workers to care for sick family members or children who are not attending school.
For the reopening of schools, 170 billion dollars has been requested, with which Biden hopes that many women will rejoin working market.
It will help to pay the rent of homes and bills of people’s services low income, and the moratorium on evictions and foreclosures is extended until September.
Also read: Biden is preparing a $ 1.9 trillion stimulus plan for the US economy
The beneficiaries
On January 15, 8 million people benefited from the second stimulus package to support the economy as a result of the pandemic, known as Economic Impact Payment 2 (EIP, for the acronym in English).
The Internal Revenue Service (IRS) and the Treasury Department began providing EIP 2 support as part of the Coronavirus Relief and Response Supplemental Appropriations Act (CARES Act) to millions of Americans in late December and early 2021. who previously received the first round, approved in March 2020.
For the most part, the eligible people were the ones who paid their taxes, based on the IRS tax registry.
As with the first stage under the CARES law, most of the beneficiaries were deposited directly into their bank account.
To Social Security beneficiaries or those who received the first round of card payments Direct Express, the money from the second payment was deposited in the same way.
Others received it by check sent by mail, and those who did not receive the first or the second can file a claim when they file their annual tax return for the 2020 fiscal year, through the chargeback credit application.
The IRS He worked day and night, even during the December holidays, to distribute aid flexibly and quickly to eligible taxpayers.
The Covid-19 support under the new EIP 2 program approved by Congress consisted of $ 600 support per person and $ 1,200 for married couples filing their tax returns jointly.
An additional $ 600 was awarded to taxpayers with children under 17, with that amount for each child.
Those who filed their 2019 tax returns have certainly received support, as have retirees from the Social Securitypersons with disabilities, pensioners with the railway company, families with children and disabled adults with low income and limited resources, as well as persons over 65 years of age participating in the Supplementary Security Income Program.
Also read: Eliminating outsourcing will not affect the labor market and will not generate unemployment: STPS
Also covered are those who filed online with the IRS through the Non-Filers tool before November 21, 2020, or who submitted a simplified return that was processed by the tax authorities.
If adjusted gross income was reported in 2019 of up to $ 75,000 for individuals and up to $ 150,000 for married couples filing jointly and surviving spouses, the full amount was received on the second payment.
However, in the case of people who declared taxes in excess of that income, the aid amount was lower.