How a Lack of Economic Opportunity in Guatemala Drives Migration 

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Lack of Economic Opportunity” is the main rationale given by 77% of Guatemalans intending to migrate to the US. This makes it the largest given reason for irregular migration with insecurity and family separation reasons following second.

In this blog, we analyze the historical, economic, and social factors underpinning an environment that drives high migration. We look at the solutions being implemented to address the lack of economic opportunity and how nonprofits play a role in this process.

How the Economy and Labour Market in Guatemala encourages Migration

To understand what “lack of economic opportunity” means, the Guatemalan economy and labor environment need to be understood. With this information, we will be able to see how it links to migration.

Despite reductions in poverty and increases in GDP prior to the pandemic, the Guatemalan economy is still largely informal and unequal. This means that high economic instability is experienced by most Guatemalans with little to no safety nets in place.

Employment by Industry 2014
Despite most Guatemalans working in Informal Agriculture, it provides a very small amount of GDP and economic opportunity.

As you can see from the graphic above, agriculture employs 33% of the population and is more informal in nature. Despite this sector employing ⅓ of Guatemala’s labor force, it only contributes 13.5% to GDP. Therefore, limited opportunities for prosperity result making it difficult for most Guatemalans to attain a better quality of life.

Economic growth that benefits all sections of society is necessary for poverty reduction and therefore increased economic opportunity in Guatemala. If economic growth rates continue without improvement, it would take almost 60 years to reduce poverty to the MDG of 31.4% of the population.

There also aren’t enough formal job opportunities to match labor market supply in Guatemala. Its economy is only creating 20,000 jobs for 200,000 people who are entering the labor market each year. Furthermore, Guatemala has the youngest population in Latin America which has struggled to obtain sufficient education, training, and job opportunities. 

In part due to the abundant labor supply, incentives for companies to provide good working conditions are lessened. For example, 2% of Guatemalan workers are unionized vs. 12.4% of workers in the US. Due to this and other factors, Guatemala is the 2nd most dangerous country in Latin America for trade unionists. 

Lastly, approximately 46% of household income in Guatemala comes from remittances sent from migrants in the US. Although remittances reduce poverty, this cash flow tends to encourage more migration from the communities that benefit from these remittances.

Social, Historical, and Political reasons for a Lack of Opportunity

Although economic reasons explain some of the direct, symptomatic reasons for irregular migration, the reality isn’t so simple. There are many underlying, structural, socio-political factors that influence poverty levels that drive Guatemalans to leave their country. A more nuanced concept of poverty goes beyond income to include capabilities, human capital, and human rights.

man in square selling candy
There are many reasons that lead to low economic opportunity in Guatemala.

Some challenges that keep poverty and economic opportunity low include; weak governance, corruption, food insecurity, violence, poor education quality, citizen insecurity, a shrinking civil society space, lack of human rights, and inequitable access to social services. These challenges are all contributory drivers of irregular migration.

Almost 50% of Guatemalans identify as indigenous, a section of society that still suffers the continued effects of institutionalized racism. Employers invariably hire non-indigenous individuals over their indigenous counterparts. This is one of the systemic factors causing 75% of indigenous people to live in poverty. Indigenous people are more likely to be victims of violent crime and cases are frequently dismissed due to institutionalized racism. This perpetuates the cycle of violence and discrimination towards indigenous people. It is therefore, unsurprising, that most migrants are young and indigenous people seeking a steady income. 

The UNDP’s definition of poverty is more than income based. It is defined as “the process of broadening people’s choices, allowing people to live long and healthy lives, and giving them access to the knowledge and resources needed for a decent standard of living”. Therefore, improving areas such as education and health underpin and encourage more opportunities to overcome poverty.

Guatemala still has a way to go in order to lower poverty rates and create more economic opportunity through improving the standard of living. For example, the country has one of the worst illiteracy and education rates in the western hemisphere and has one of the highest infant mortality rates, and one of the lowest life expectancies at birth. Common causes of death include treatable diseases, such as diarrhea, pneumonia, cholera, malnutrition, and tuberculosis.

Current efforts creating more economic opportunities to reduce migration

So what economic opportunity promotion efforts are happening in Guatemala in order for irregular migration to be reduced?

Well, as unpacked earlier, due to poverty (therefore lack of economic opportunity) having multiple drivers, there are myriad of initiatives being carried out by different actors

Partnership for Central America

PCA table meeting for Economic Opportunity
The Partnership for Central America aims to mobilize and convene foreign direct investment in the Region. (Credit: PCA)

In response to the Biden-Harris Administration strategy to address the root causes of migration in Central America, this organization was created. It focuses on the economic sphere and “works with a multi-national coalition of private organizations to advance economic opportunity”.

Some of their activities include mobilizing foreign direct investment to create one million new jobs. They aim to “facilitate the enabling environment for investments through seven multidimensional pillars, including digital access, financial inclusion, and job skilling.”

Some of their corporate partners include Microsoft, Meta, Pricesmart, and Pepsi.

USAID / IOM – UN Migration programs

IOM youth awareness program
An awareness raising program about irregular migration (Source:IOM)

In 2021, the International Organization for Migration (IOM) and USAID commenced the Addressing the Root Causes of Irregular Migration Project in Guatemala. The two organizations committed to addressing the multitude of interconnected causes with a focus on certain regions and vulnerable groups.

Compared to the Partnership for Central America, these programs have a more balanced  approach. They also focus on the social and political causes of the lack of opportunities leading to migration. For example, some of the project proposal themes include promoting women’s rights, improving health, and increasing access to education.

Guatemalan Government Programs

Government Program for economic opportunity
Training programs are aimed at providing more skills and economic opportunity to at-risk youth. (Source sbs.gob.gt)

As the drivers of migration cut across many areas, most Government programs for example in health and education assist in encouraging Guatemalans not to migrate. However for the purposes of this article, we will focus on specific and more direct economic opportunity creation programs.

One of these programs is called “Quédate” which are specific job training programs for returned and at-risk adolescents. The first Center opened in 2016 with the support of the Ministry of Education, the Technical Institute for Training and Productivity (INTECAP), the United Nations Development Program (UNDP), the International Organization for Migrations (OIM) and Buckner Guatemala.

These Training Centers provide formal and technical training to returned adolescents, or those who are at risk of migrating. The idea is that tools and possibilities for employability are provided in their regions of origin. Training courses are free and can be adjusted according to the needs of the group of adolescents. 

How Nonprofits play a role in creating more economic opportunities to reduce migration

So can Guatemalan nonprofit organizations contribute to creating more economic opportunity and a reduction in irregular migration? Well, the answer is an overwhelming YES! 

Of course, every nonprofit has a different mission and focus, however they all contribute towards better social, economic and/or political outcomes for their communities. These better outcomes improve overall quality of life and reduce the drivers of migration. Here are some examples:

Mayanza

mayanza logo and health work
Mayanza is an outstanding nonprofit operating around Lake Atitlan that is an exemplary member organization (credit: Mayanza)

This nonprofit organization is located in Santiago, Lake Atitlan and provides key health services for the local community. Programs include Oral Health and Hygiene, Health Education, a Healthy Mothers Program, and a Community Outreach Program. As mentioned previously, allowing communities to live healthy lives are key underlying factors that improve poverty outcomes and economic opportunity. This nonprofit is a stellar example of community based organization that makes a tangible difference. Mayanza is one of our highest scoring nonprofits that we recommend to any interested donors or partners.

De La Gente

three coffee growers
De La Gente opens more economic opportunities through engaging foreign markets to buy the coffee cooperative’s delicious coffee (Credit: De La Gente)

This organization works with coffee cooperatives providing improved market access while delivering high quality coffee to roasters and consumers. DLG offers more stable prices to farmers thus providing them improved and steadier incomes compared to farmers working alone. The nonprofit also hosts tours to attract more income and attention to their high quality coffee.

Limitless Horizons Ixil

2 girls smiling
Limitless Horizons Ixil operates in the migration vulnerable region of Quiché. They provide educational opportunities to help break the cycle of poverty. (Credit: Limitless Horizons Ixil – Anna Watts)

Limitless Horizons Ixil (LHI) is another stellar member nonprofit of Pionero Philanthropy with a Silver Seal of Excellence. They work in the Northern Highlands in Chajul, Quiché, an area particularly vulnerable to migratory pressures. 

This rural nonprofit opens educational, and therefore economic opportunity for Chajul’s youth. LHI opened a new school in 2022 and has a youth development program, an artisan program, and Chajul’s only community library.

These organizations represent a fraction of the nonprofits operating in Guatemala that are improving economic and social outcomes for their communities. 

Contact us for more information or download in depth reports on member organizations so you can support ongoing efforts to boost economic opportunities so Guatemalans can thrive in their communities.