74 Time April 25/May 2, 2022
△
Cajolá residents must collect
remittances in person from their
relatives who live in the U.S.from the U.S.: the clothes in its many
thrift stores, the electronics in its mar-
kets, the old cars on its streets, the
money in people’s pockets.
“Remittances are like rain,” Bar-
reno says. “Right now it’s raining a
lot, but the rain comes from the sea—
the U.S.—and the money all goes back
there eventually. None of it stays here
to develop the local economy. So none
of the people want to stay either.”
The economics are stark. The aver-
age monthly minimum wage in Guate-
mala is around $420, compared with
almost $2,600 before tax in Califor-
nia. Pandemic- related business clo-
sures have made even those who were
relatively well-off consider migrating,
says Rosario Martinez, a researcher
at the Guatemala City chapter of the
Latin American Social Sciences Insti-
tute. “For a long time it was mostly
poorer women from rural areas with
little education who would go to work
in cleaning,” she says. “Now we’re see-
ing professionals, people with midlevel
studies or even university degrees, that
because of the pandemic lost their
jobs. We’re losing our youth.”
But only one-fifth of Guatemalan
migrants to the U.S. intend to move
there permanently, according to a 2018
survey by the Inter- American Devel-
opment Bank (IDB); that’s compared
with half of Salvadorans and one third
of Hondurans. Most Guatemalans, mi-
gration experts say, plan to spend only a
few years earning money to pay for their
children’s education or help their par-
ents build a house, and then return to a
new and better life. Barán, who worked
as a hotel maid in Washington, D.C.,
during her early years in the U.S., sent
her mother money for a “small, humble”
house and to invest in local businesses,
which Danny now runs. Barán now lives
with her other three children in Arling-
ton, Va., and works mostly as a notary.
She’s not sure if she’ll return, but if she
did, she could have a comfortable life.
It doesn’t always work out that way.
“I’ve heard so many painful stories
from friends who return home after
years and get the shock of their lives
when they find their family has spent
everything,” Barán says.
A 2020 study by the U.N. Eco-
nomic Commission for Latin America
and the Caribbean, based on surveys
in a southern Guatemalan region,
found that 57.1% of remittances go to-
ward daily consumption, with 8.2%
spent on building or renting homes,
and only 5.4% invested or saved. The
money spent on consumption is hardly
wasted: remittances make up almost
half of household income for those who
receive them, according to the IDB,
crucial for covering the cost of food,
clothes, and other necessities.
But a lack of financial education
can reduce the returns that migrants
and their families make on their re-
mittances, says Rut Urizar, financial-
education coordinator at the Inter-
American Dialogue, a think tank.
Ill-fated remittance architecture is a
key example, Urizar says, because sav-
ing money to build a home is often the
first goal for migrants arriving in the
U.S. But some recipients lack experi-
ence handling large sums. One young
mother whom the Dialogue consulted
with in Huehuetenango cried after
burning through around $13,000 sentby her husband in a year. “She was
looking after her 3-year-old daughter,
and the daughter had an iPhone. And
she said it’s the second phone, because
the girl broke the first one,” Urizar says.
Since 2016, the Dialogue, working
with partners including Cities Alliance,
a U.N.-funded coalition on urban pov-
erty; the Swiss Agency for Develop-
ment and Cooperation; and the U.S.
Agency for International Development,
has established financial- education
programs in more than 30 Guatemalan
towns where migration to the U.S. is
common. Locals are trained as financial
educators, and set up stalls inside bank
branches where people go to deposit
their remittances or collect wages. In
2020, the programs were responsible
for formalizing $2.4 million worth of
savings, and opening 3,000 financial
products. They also help participants