By
Javier Arroyo
&
Jonathan Delgado
Latin American government instability
Political confusion
Corrupt leaders
Government spending unaccounted for
No infrastructure for growing population
Illegal policies set precedent for future
Lack of job opportunities
Force population to become informal
Informal sector creates own extralegalsystem
Economy does not have participation ofthe informal sector
Creates a black market for bribes, laws,election of officials
Creates lack of incentives to becomeformal citizens
Jobs: abundant jobs opportunities
Legal protection: rights, benefits, laws,healthcare, etc.
Stability in government
Better life situation: family, schools, morefruitful future
The prices they charge for services andgoods are lower than formal businesses.
Government discourages them withpolicies and regulations.
The opportunity costs of becomingformal is low, therefore not profitable.
Immigrants provide workers here in theU.S.
Undocumented workers allow for lowwages.
Cheaper labor for jobs that would notget filled by U.S. citizens.
These workers are the backbone of theU.S.
Population leaves countries due to thelack of work.
In return they receive remittances:approximately $30 million in 2004
This money goes to the poor and isconsumed and not reinvested: used tobuy consumer goods rather than to payfor children's education or saved to investin small businesses.
Mexico, the biggest recipient, got $13.3 billion inremittances in 2003, a 35 percent increase overthe previous year. Brazil got $5.2 billion; ElSalvador, $2.3 billion; Guatemala, $2.1 billion;Ecuador, $1.7 billion; Jamaica, $1.4 billion, andCuba and Peru, $1.2 billion each
Due to current economic conditions individualsare losing jobs and less money is being sentback home.
These countries depend and run their economyoff of these funds and a decrease will handicap it.
Remittances will experience decreaseover the years.
Families reunite in the U.S. and there nomore need to send the remittances.
Many well educated individuals cannotperform their expertise in L.A. countries.
No demand for educated professionals,wages are better performing odd jobs.
These individuals seek to use theirexpertise out of home country andimmigrate to the U.S.
“Human Flight”
More educated individuals producesmore productivity 5-15% and lesseducated individuals less productivity(slow economic growth) and increasespoverty.
In U.S. more educated and L.A. countriesless educated.
This proves what is presently going on inthe economies.
Recommendations
Stabilize populations.
Implementation of higher wages
Plan to reduce poverty andunemployment.
Keep skilled workers.
LA Countries must become moreefficient.