Inflation is ‘pouring fire’ on inequality as immigrants can barely send cash overseas

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But inflation is not affecting people equally. For immigrants with relatives who depend on the money they send back, higher prices are hitting families twice: at home and abroad.

Migrant workers who send cash to loved ones abroad often save less because they are forced to spend more as prices rise. For some, the only option is to work harder, work weekends and nights, have a second job. For others it means reduce things that were once basic they like meat and fruit so they can send what is left of their savings to the family back home, some of whom are struggling with hunger or conflict.

“I used to save something, about $200 a week. Now, I can barely save $100 a week. I live day to day,” said Carlos Huerta, a 45-year-old Mexican who works as a driver in New York City.

Across the Atlantic, Lissa Jataas, 49, sends around 200 euros ($195) from her desk job in Cyprus to her family in the Philippines every month. To save money, she looks for cheaper food at the supermarket and buys clothes at a charity shop.

“It’s about being resilient,” he said.

Economies that were reeling from the impacts of the COVID-19 pandemic and the effects of climate change were hit again by Russia’s war in Ukrainewho sent Food and energy prices skyrocket.

Those costs plummeted 71 million more people worldwide in poverty in the weeks after the February invasion, which cut critical grain shipments from the Black Sea region, according to the United Nations Development Program.

When Food and fuel prices skyrocket, the money that people can send to their relatives does not reach as far as it used to. The International Monetary Fund estimates that global inflation will peak at 9.5% this year, but in developing countries it is much higher.

“The poorest people are spending much more of their income on food and energy,” said Max Lawson, head of inequality policy at anti-poverty organization Oxfam.

He said inflation is “breathing fire” on inequality: “It’s almost as if the poor are a kind of sponge meant to absorb the economic shock.”

Mahdi Warsama, 52, came to the United States from Somalia as a teenager. A US citizen who works for the nonprofit Somali Parents Autism Network sends between $3,000 and $300 a month to relatives in Somalia, sometimes borrowing money to send what relatives need for medical bills and other emergencies.

Warsama, who splits her time between Columbus, Ohio, and Minneapolis, estimates she sent $1,500 last month to help family members pay for necessities like food and water for themselves and their livestock.

Thousands of people have died in a Drought in Somaliawith the UN saying that half a million children are in risk of death from malnutrition or close to famine.

“Just as we have inflation in the United States, in Somalia it is even worse,” he said, adding that sacks of rice, sugar and flour that used to cost $50 now cost $70.

You’ve changed your spending habits, you’re looking for ways to earn more and monitor interest rate hikes and inflation, something I had never done before this year.

“I am more determined to work harder and earn more money,” Warsama said. “I have to be more aware of the fact that I have to help my relatives at home.”

In New York, Huerta has been living apart from his wife and children for almost 20 years, landing jobs ranging from washing dishes to driving executives, whatever it takes to earn enough.

He said he sends about $200 a week to his wife and mother in Puebla, Mexico. Huerta has also learned to paint houses, so if there is no demand for a chauffeur, he can still earn about $150 a day.

With earnings of about $3,600 a month and the rent on his Queens apartment rising, Huerta said he’s swapped steak for chicken, eats less fruit as prices skyrocket and canceled his cable.

For Jaatas, who has lived in Cyprus for nearly two decades, the six relatives he supports in the Philippines not only face mounting costs, but are also reeling from the aftermath of a typhoon that left them without water and electricity.

“We really like to help our family at home no matter what the mess or shortcomings,” he said.

analysis by the Carnegie Endowment for International Peace says the Philippines is the most food insecure country in emerging Asia due to its dependency on imported food.

Ester Beatty, who heads a chapter of the European Filipino Diaspora Network in Cyprus, said it’s common for Filipinos to work on Sundays in the Mediterranean island nation as they seek extra income to help family members struggling to buy staples like rice and sugar.

In developing countries, it is estimated that low-income families spend more than 40% of your household income on food even with government subsidies, said Peter Ceretti, an analyst who follows food safety at risk advisory firm Eurasia Group.

Ali el-Sayyed Mohammed, 26, arrived in the United Arab Emirates in February after several years looking for work in Egypt.

“Life is expensive and salaries are not enough, so I took the step of leaving,” he said. “It was a difficult decision at the beginning, but the situation left me no other choice.”

With his father deceased, Mohammed is the breadwinner of the family, supporting three sisters and his mother. He hails from Beheira, a province in the Nile delta that he has seen many of his young men leave, sometimes undertaking deadly journeys across the Mediterranean Sea in search of work in Europe.

With around $1,000 saved, Mohammed came to Dubai and stayed with friends until he got a job at one of the city’s most popular Egyptian restaurants, Hadoota Masreya.

However, the rising cost of living in Egypt has made his goals of saving enough to help his sister marry next year or secure his own future even more difficult. Egypt’s inflation has risen to around 16% as the value of the currency has fallen, making the life of millions of Egyptians living in poverty is even more difficult.

“I have a lot of staff whose families depend on the income they get from the restaurant and a large part of their income is sent home so people can live,” said Mohamed Younis, manager of Hadoota Masreya.

The restaurant recently raised wages to keep up with the rising cost of living, he said.

Younis said an increasing number of Egyptian men are reaching out for work. Younis manages a YouTube channel called “Clínica Restaurante” which gives advice in Arabic on how to be successful in the restaurant industry. He warns that moving to the United Arab Emirates carries risks because finding a job takes time and money.

Back in Minnesota, 36-year-old school bus driver Mohamed Aden says he works as an Uber driver to support his wife, children and siblings who fled from Somalia to Kenya due to violence in their homeland.

Without work authorization in Kenya, his family depends on the money he sends home, nearly half of his $2,000 monthly income.

But he’s paying more for gas and food prices are higher in Kenya, so the money doesn’t go that far.

Aden tries to visit Kenya every December during the cold Minnesota winter.

“This year, I can’t because of inflation,” he said. “I’m the only one here, feeding the family… but I’ll come back when I have the money.”



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