October 12, 2020 — Milena Mayorga, the newly appointed ambassador of El Salvador in the United States revealed what appears to be the government’s strategy: the return of “compatriots” recipients of Temporary Protected Status to a country with ideal social and economic conditions. These surprising declarations are far from reality and irresponsible. Economic figures show that El Salvador, like the majority of national economies, is entering an economic crisis due to the Covid-19 pandemic. As discussed during our recent virtual forum, economic closure as a measure to contain the pandemic worsened the economic crisis, as well as inequality that people in El Salvador, Guatemala, and Honduras already faced before the pandemic. Now, the three countries face the worst economic crises in their histories, according to the Central American Institute of Fiscal Studies (Icefi). In addition, these declarations harm the fight for permanent residency of many Salvadorans in the United States, where they have lived, worked, and raised families for at least 20 years.
El Salvador was projecting an economic growth of 2.5% for the year 2020; however, projections have been corrected, and now the conversation is not about growth but about an economic contraction. There is talk that the Salvadoran economy will fall -7.5%. This represents an economic setback of more than 30 years, going back to the early years of the civil war (1980-1992). Figures from the Central Reserve Bank are alarming as well. The situation also affects the country’s public debt, which is estimated to reach 92.1% of the Gross Domestic Product (GDP) by the end of 2020, and will continue to grow according to a proposal presented by the Treasury. Ironically, this proposal was described as the start of a Salvadoran “miracle,” falling in line with the ambassador’s statements. The economic decline is compounded by concerns over the government’s own attacks on the rule of law.
A similar situation is observed in Honduras, where an expected 3.5% increase in the economy has now changed to a projected -7.5% decline. In addition, by the end of 2020, poverty is also expected to increase dramatically 4.2 points in comparison to 2019. Further evidence of the dire economic situation is evidenced by a new exodus in “caravans” heading towards the United States. Many people’s journeys have already ended, revealing how the anti-immigrant rhetoric of the United States has been externalized, in this case with the complicity of the Guatemalan government.
In the United States, the economic situation has also been impacted by the pandemic. There were expectations that economic reactivation would be faster, but economic indicators show otherwise. Of the 22 million people who lost their jobs at the start of the pandemic, only 11.4 million people have found employment since May of this year. The unemployment rate was 7.9% at the end of September, which is an improvement compared to 15% in April. Nevertheless, the growth rate of employment is slowing down. Racial and ethnic Inequality is growing, as Latinx and Black communities respectively make up 23% and 21% of the unemployment rate. At the same time, there are wide gender disparities in the labor market. Women have had to assume care responsibilities in the context of the pandemic, and they have been disproportionately affected by unemployment in the service sector. Many women stopped looking for work due to having more tasks related to care. The percentage of women participating in the labor market dropped from 56.6% to 56.1%, a return to figures dating back to 1987.
This is a hard blow to the workers of the U.S., who continue waiting for a new economic stimulus package like those approved previously. Anguish in the face of a slow economic recovery is taking over North American society. Reduction in income was temporarily cushioned by an increase in unemployment benefits (US $600 weekly), but as the additional benefit came to an end, the impact on consumption and the economy in general is being felt.
The current worldwide economic contraction has a disproportionate impact on workers, especially harming women, as well as Latinx and Black communities. The prospect of ending TPS and DACA makes the situation even more difficult for more than one million migrants. The economic situations in El Salvador and Honduras make it clear that if before the pandemic conditions were inadequate for the return of more than 250,000+ Salvadoran and Honduran TPS recipients, the situations today are even worse. An economic vision and plan is required – one that includes progressive tax reforms that encourage reactivation of the economy, reduce poverty and inequality, and include an environmental perspective. Each society should face this challenge understanding that it is critical to create opportunities for all people, that leave no one behind, and that the work and contributions of migrants are part of the solution.