Cross-Border Economic Impact

POSTED: Friday, January 30, 2009 - 3:26pm

UPDATED: Wednesday, February 17, 2010 - 2:23pm

Americans are dealing with a weak economy and we are not alone. South of the border, the surge of violence and a plunging peso are also making for some tough economic times.

Tom Fullerton, an economics professor at the University of Texas at El Paso says, "its discouraging a lot of commerce that would have taken place on both sides of the border."

Yuridia sanchez says she is seeing the impact here in El Paso.

"There are no people in the streets, especially during the weekdays. Monday through Friday, there are no people,"she says.

Yuridia tells us customers from Juarez made up about 60 to 70 percent of the customers at her downtown shop, but now, most are gone.

"When the peso started declining and with the violence, they all stopped coming," she says.

The drop in business, Yuridia says, has forced layoffs at the store. That in turn, hurts our friends to the south. It also helps to illustrate how closely our economies are tied together. Historically, when the Mexican economy goes under, people who lose their jobs, look to America to find work. The problem today is, the United States' economy is also struggling.

"That is taking away the role that the U.S. economy has historically played, in the form of serving as an economic shock absorber for unemployed Mexicans," says Tom Fullerton.

And now, it appears fewer Mexican workers are coming to the U.S because there are fewer jobs for them. According to a new report, the money sent home by Mexican migrants has fallen for the first time on record. And, so the cycle continues, particularly here on the border. As Mexicans struggle to make a living, the less money they have to spend at American stores, and those businesses who depend on their money, struggle to stay afloat. Leaving everyone on both sides of the border hoping for an up tick in both economies, soon.

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