Facing Economic Devastation At Home, Latin Americans Once Again Turn Their Gaze To Miami

The unprecedented depth and breadth of the economic maelstrom facing Latin America likely means migratory push over the course of the next year.

According to the International Monetary Fund’s June forecast, Latin America’s economy is expected to slip into its worst recession on record — with a projected economic contraction of 9.4% this year also making the region the world’s hardest hit by COVID-19.

Accounting for the sharp downturn are hammer blows to the region’s commodity export markets and tourism revenue, as well as more limited access to capital due to falling foreign investment and slowing remittance flows.

“The projection is that the economy is going to take an enormous hit in several areas,” said Eduardo Gamarra, a Latin America expert and political science professor at Florida International University. “And so when you look at that, the impact this will have is going to be huge in a region that was already in not very good condition when the virus hit … We are probably talking about a generation’s worth of impact for some countries, if not more.”

Among those particularly vulnerable to the pandemic are the workers who rely on Latin America’s vast informal sector for their income. To them, virus-stopping lockdowns and mandatory quarantines represent an almost existential threat; if they stay at home, they can’t earn any money.

“The reality is that most of these societies — even in countries as sophisticated as Brazil and Argentina — have a huge component of their economically active population serving in the informal sector,” said Gamarra. “And informality of course means that people … don’t have wages; they don’t have any kind of social security protection. They live off of what they make each day. That’s why the impact is so dramatic there if you start shutting everything down.”

Hampering Latin American countries’ ability care for more vulnerable residents are cripplingly large debt burdens.

According to the Washington-based Institute for International Finance, Chile, Brazil and Mexico were among the five emerging markets worldwide with the steepest increases in debt-to-GDP levels in 2020. Elsewhere in the region, Argentina and Ecuador are already in default on their foreign debt and busy negotiating restructurings.

“There is another risk associated with the pandemic, and that’s a debt crisis,” said Touchton. “That means that even if countries don’t default, the amount of money that they would have to spend to service debt is going to push other expenditures out of the budget and that includes social programs to reduce poverty. This is an economic catastrophe.”

According to an estimate from the United Nations, the pandemic-induced crash could throw 45 million people into poverty across Latin America by year’s end, bringing the regional total to 230 million. The ranks of the extreme poor at risk of hunger and homelessness could swell by 28 million to 96 million.

Meanwhile, the road to recovery likely will be long. Economists predict that a return to pre-pandemic economic indicators won’t materialize until 2023 — a later date than for every other emerging-market region.

“The people are just not seeing a light at the end of the tunnel,” said Gamarra. “I don’t even know that they are seeing the tunnel.”

Given the bleakness of the region’s economic prospects, Touchton expects migration to be on people’s minds, especially to destinations like the US and, specifically, South Florida, which is already home to a large foreign-born population.

“I think we have seen that with Venezuela, in particular, over the last four or five years. With severe economic contraction and political instability at home, if you can make it to Miami … you try to do it,” said Touchton. “South Florida received around 300,000 new arrivals from Venezuela since 2015. The US has this position as the outlet — or in some cases, the long term goal — for many people living in the region … And in South Florida you can survive exclusively in Spanish with no problem. So absolutely I do think you’ll continue to see people want to come here in large numbers.”

Immigration Hurdles

The Trump administration has seized on the COVID-19 threat to severely restrict foreigners’ access to the US, leaving almost no part of the country’s immigration system untouched. In late June, the president suspended several groups of employment-based visas, a decision that will stay in place at least until the end of the year.

Earlier in the year, Trump also ordered a temporary ban on green cards for certain groups of people outside the US and released a new set of rules that would heavily limit access to asylum.

At the southern border, new coronavirus restrictions unveiled in the spring have led Customs and Border Patrol to expel 80% of everyone encountered within two hours of their arrival. In addition, bans remain in effect for travelers from China, Iran, the United Kingdom, Ireland, Brazil and member nations of the European Schengen area.

But a number of the hopeful migrants in Latin America who spoke with the Herald remain undaunted, citing the desperate situations they are facing at home. Some expressed a willingness to circumvent the paralyzed legal immigration process, and are pondering flying directly to Miami on tourist visas. Those so far been excluded from the Administration’s announced visa freezes — an exemption confirmed by a Department of State official.

“I really want to go to Miami. I know I don’t have the papers to legally stay there, but I still want to go,” said Ben, who works in an auto parts store in Buenos Aires. “My idea … is to go with a tourist visa and stay after it expires. I don’t care about that. I would like to go with enough money to cover a couple months’ rent, and then find work and start from zero.”

Still, traveling to Miami on a tourist visa with the goal of overstaying won’t be easy, especially in the short term as air travel remains grounded in large swaths of Latin America.

For those who don’t already have an approved visa, getting the necessary consular services appointment could be difficult at best. Only a handful of US embassies and consulates around the world have reopened since shutting down in March, and it may be a long time before they can catch up to pre-pandemic processing pace.And officials who suspect a traveler’s real intent is to immigrate to the US, rather than just visit, can deny that traveler’s visa or entry to the country at any moment.

Those who do manage to get to Miami on a nonimmigrant visa and illegally overstay would join the ranks of Florida’s more than 650,000 undocumented immigrants. An estimated 60% of the state’s undocumented population is made up of those who have overstayed visas, a proportion higher than the national average.

‘There\’s No Way The Florida Economy Can Absorb More Immigrants’

It didn’t take long for pandemic limits to claim both of Matias’ gigs as a children’s soccer coach and nightclub DJ. While unemployed in his hometown of Puerto Montt, Chile, he has been thinking about following in the footsteps of a childhood friend who moved to Miami years ago. What Matias would do to earn a living once in South Florida is still an open question.

“The truth is I see myself taking on the first job that comes my way,” Matias said.

Before COVID-19 crashed into the country with the force of an epochal calamity, the US was facing a massive labor shortage across all industries and had a pressing need for low-skilled immigrants like Matias to fill open positions in restaurant kitchens, hotels, and nursing homes.

The Florida economy in particular had proven historically receptive to an immigrant workforce, given the state’s major industries, tourism and agriculture, generate outsized demand for low-skilled labor.

“But the pandemic changed that,” said Dr. Hector Sandoval, a professor and labor economics researcher at the University of Florida. “You only have to think back to February. At that point, Florida had the lowest unemployment rate on record and the economy was growing; it could serve all these immigrant workers.”

Although construction remains a relative bright spot for low-skilled workers in Miami-Dade, COVID-19 has decimated demand for labor from other industries, including agriculture and hospitality.

“Now, and at least, for the following two months, I think there is no way the economy can absorb more low-skilled immigrants and provide jobs,” said Sandoval. “I understand that for many of these people in Latin America, they really have nothing to lose. At the end of the day, the situation there is even worse, so that’s the incentive… But now is really not the moment to come.”

Paradoxically, high unemployment in South Florida could actually be inspiring, rather than deterring, dreams of migration. That’s because US slowdown is forcing immigrant workers already in the country to stop sending money home, making life even more difficult for relatives abroad who depend on that income.

“It’s somewhat counter-intuitive, but when remittance flows slow from the US, then there is difficulty in remaining in the recipient country because there is no money coming,” said Touchton. “So even if the situation is worse here than it has been in a long time in terms of unemployment, if there is enough work so that the person in the US can survive, well then there is a draw, an attraction.”

An influx of low-skill foreign labor to the Miami area likely won’t hurt the economic prospects of the average Miamian, according to an oft-cited study centered on effects of the 1980 Mariel boatlift. But some locals likely would suffer, including those without jobs and those whose skills most directly overlap with newly arrived immigrants. Wages could also slide.

“The working poor immigrant community gets their wages undercut by newly arrived, still poorer immigrant communities, and the [labor] market saturation” that follows, said Touchton. “Especially in the sense of new arrivals frequently being willing to work for less money than people who are already here. And so every new wave of immigrants faces a little bit of a backlash.”

Miami historian Paul George says that the previous waves of Cuban and Central American migration that shaped and reshaped the city since the 1960s did on occasion spark “resentment” from locals, including from African-Americans worried about economic displacement. But he doesn’t expect future influxes to ruffle feathers.

“People coming from Latin America and the Caribbean is an ageless theme in Miami. We’ve become an immigrant city. We’ve become an Ellis Island, and so immigration is less surprising, it’s less shocking,” George said. “In many people’s minds, it’s just part of our daily pattern.”

And the employment outlook may be brightening. Last week, newly filed applications for unemployment assistance in Florida hit their lowest level since the pandemic began. New arrivals from abroad could help keep that positive trend going; while immigrants take jobs, they also help create jobs by stimulating demand for goods and services.

“New immigrants would be part of the economy,” said Sandoval. “They would be spending money … and paying taxes. They would contribute.”

But starting from scratch in a South Florida economy still far removed from full-flight performance is bound to be difficult. Alejandro Duque should know. The 23-year-old Colombian immigrant arrived in Miami in early March, hoping to find a job as a restaurant cook. But three months of full-time job-search didn’t turn up a single restaurant gig.

“It was horrible, really horrible. I barely had enough to eat during that time,” Duque said. “I remember one day breaking down and crying a lot. I asked myself, ‘Why can’t I find a job in the country where supposedly everyone has work?’ It was really difficult.”

Duque’s fortunes have improved; over the summer, he was able to sign up as a driver for the food-delivery service Uber Eats. He is happy with his job, but still hopes fellow Latin Americans see his experience as a cautionary tale.

“My advice to people who are thinking about coming over would be to check that they have enough resources to weather the crisis. Because at the moment, the US is not what it was seven or eight months ago, when there was no pandemic,” Duque said. “Don’t assume that the country of opportunity has infinite opportunities.”

View the Miami Herald news video \’The informal economy is the lifeblood of Latin America. Now it\’s under threat by the coronavirus\’ below,