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

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But inflation isn’t affecting people equally. For migrants with relatives relying on money they send back, higher prices are pinching families twice: at home and abroad.

Migrant workers who send cash to loved ones overseas are often saving less because they’re forced to spend more as prices rise. For some, the only option is hustling harder, working weekends and nights, taking on second jobs. For others, it means cutting back on once-basic things like meat and fruit so they can send what’s left of their savings to family back home, some of whom are struggling with hunger or conflict.

“I used to save something, about $200 weekly. Now, I can barely save $100 per week. I live by the day,” said Carlos Huerta, a 45-year-old from Mexico working as a driver in New York City.

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

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

Economies reeling from the shocks of the COVID-19 pandemic and effects of climate change were hit again by Russia’s war in Ukraine, which sent food and energy prices soaring.

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

When food and fuel prices shoot up, the money people can send to relatives doesn’t go as far as it once did. The International Monetary Fund estimates that global inflation will peak at 9.5% this year, but in developing countries, it’s much higher.

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

He said inflation is “pouring fire” on inequality: “It’s almost like poor people are kind of like a sponge that are meant to absorb the economic shock.”

Mahdi Warsama, 52, came to the U.S. from Somalia as a teenager. An American citizen who works for the nonprofit Somali Parents Autism Network, he sends anywhere from $3,000 to $300 a month to relatives in Somalia, sometimes borrowing money to send what relatives need for medical bills and other emergencies.

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

Thousands of people have died in a drought gripping Somalia, with the U.N. saying half a million children are at risk of death due to malnutrition or near famine.

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

He’s changed his spending habits, is looking for ways to earn more and monitors interest rate hikes and inflation — something he never did before this year.

“I am more determined to work harder and make more money,” Warsama said. “I have to be more mindful, the fact that I have to help my relatives back home.”

In New York, Huerta has been living apart from his wife and kids for nearly 20 years, picking up jobs 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 also learned to paint houses, so if there’s no demand for a chauffeur, he can still earn around $150 a day.

With earnings of about $3,600 a month and rent for his Queens apartment going up, Huerta said he’s switched out steak for chicken, eats less fruit as prices skyrocketed and canceled his cable.

For Jaatas, who has lived in Cyprus for almost two decades, the six relatives she supports in the Philippines are not only facing rising costs but are reeling from the aftermath of a typhoon that knocked out water and electricity.

“We really like to help our family back home regardless of whatever disaster or shortcomings,” she said.

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

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

In developing countries, it’s estimated that lower-income families spend over 40% of their household earnings on food even with government subsidies, said Peter Ceretti, an analyst tracking food security at risk advisory firm Eurasia Group.

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

“Life is expensive and wages don’t cover enough so I took the step of leaving,” he said. “It was a hard decision at first, but the situation left me with no choice.”

With his father deceased, Mohammed is the family’s breadwinner, supporting three sisters and his mother. He hails from Beheira, a Nile Delta province that has seen many of its young men leave, sometimes embarking on deadly voyages across the Mediterranean Sea in search of work in Europe.

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

The rising cost of living in Egypt, though, has made his goals of saving enough to help his sister get married next year or secure his own future even harder. Egypt’s inflation has climbed to about 16% as the currency’s value has dropped, making life for millions of Egyptians living in poverty even more difficult.

“I have a lot of staff whose families rely on the income they make from the restaurant and a big portion of their incomes are sent back home so people there can live,” said Mohamed Younis, manager at Hadoota Masreya.

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

Younis said growing numbers of Egyptian men are reaching out in search of work. Younis manages a YouTube channel called “Restaurant Clinic” that gives advice in Arabic on succeeding in the restaurant industry. He warns that moving to the UAE comes with risks because finding a job takes time and money.

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

With no work authorization in Kenya, his family relies on the money he sends — nearly half of his $2,000 in monthly earnings.

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

Aden tries to visit Kenya each 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 will go back when I get the money.”