More wages sent to Latin American homelands

The Miami Herald ^ | 12/01/03 | Richard Brand

[Holly_P]

Posted on Mon, Dec. 01, 2003

More wages sent to Latin American homelands Remittances from the United States have nearly doubled in two years, according to a report by the Pew Hispanic Center. BY RICHARD BRAND rbrand@herald.com

When the workweek ends in Homestead, lines of immigrants, mostly from Central America, form at the town's many money-wiring businesses to send part of their paychecks to loved ones back home.

It's a ritual that has been repeated for decades in South Florida, with its massive international population. And it's becoming increasingly common throughout the country.

In the past two years, the amount of remittances sent to Latin America and the Caribbean from the United States has almost doubled, according to statistics released this week by the Washington, D.C.-based Pew Hispanic Center.

Remittances to the region have jumped from $18 billion in 2001 to an estimated $30 billion this year, eclipsing foreign direct investment for many receiving countries as a source of capital, the report said.

The jump underscores recent shifts in the country's booming Hispanic and immigrant population.

Immigrants today are more likely to be from urban areas and tend to be more educated, partly explaining why many are earning more and sending more money home, according to experts. Also, because of stricter immigration laws, undocumented migrants tend to stay longer. The increase in remittances also reflects a growing need in Latin America, according to the report.

''The numbers have increased dramatically. It's a combination of factors,'' said Roberto Suro, director of the Pew Hispanic Center. ``This is not anything that anybody should be celebrating. In an ideal world, people wouldn't feel obliged to leave their home countries in order to support their families.''

HARDSHIPS AT HOME

Indeed, it is difficulties at home that often lead to a decision to leave and send remittances back.

Omar Motta, 18, and his brother-in-law Walter Alvárez, 30, are two of the six million immigrants across the United States who send remittances home. Unemployed in Guatemala, they say they spent 15 days traveling by foot and bus across Mexico, the New Mexico desert and on to Homestead. Now they work for a construction company.

At the Servi America on Washington Avenue in Homestead, the pair unroll $250 in cash to be wired to a mother and sister in Guatemala who they haven't seen since they arrived in South Florida seven months ago.

IN THE HUB

Along Washington Avenue -- the epicenter of Homestead's Central American community -- shoe stores, groceries and travel agencies carry neon signs offering envios. Rates for money-wiring services tend to range from 3 percent to 10 percent per transfer.

''One dollar here is seven pesos over there. It's worth more there. You can buy sodas and bread,'' Motta said.

The remittances have a profound effect on the economies in Latin America. According to the Pew survey, which included interviews with 11,000 people in the United States and abroad, 18 percent of Mexican and 28 percent of Salvadoran adults receive remittances. The majority of receivers are women.

Remittances to households in Cuba are a special case -- limited to $300 per quarter and $200 for authorized goods by the U.S. government because of the embargo on the island. Despite those limits, the total remittance to Cuba, according to various official estimates, is believed to be between $600 million and $1 billion.

The Pew report suggests that remittances may actually drive migration trends. People interviewed who receive remittances were far more likely than the general population to say they wanted to move to the United States.

'We asked people in Mexico, `Are you thinking about emigrating to the United States?' The one largest predictor of whether someone will say yes to that question is whether they are remittance receivers,'' Suro said.

The remittances also reflect the strong emotional bonds that exist between senders and receivers, who are most often family, and the sadness that comes with being separated for a long time from a wife, a parent, a child.

Alvárez says he talks on the phone every two weeks to his wife, Alzira. He says he doesn't expect to see her for another two years.

''It's difficult to leave her behind, to not see her,'' Alvárez said.

[1stFreedom]

I think Western Union transfers should be subject to taxation -- say 15%.

I suspect much of the money is cash which means someone got paid in cash and didn't pay taxes, etc.

[PeterPrinciple]

I am willing to be corrected but my logic says these are US Dollars that eventually will have to be spent here in the US. The only question is when they will be spent.

[1stFreedom]

It may be US dollars, but remember, the is NO federal sales tax (outside of Gas) on consumer goods.

So, they aren't paying a share of the Federal Burden -- but may be recipients of such tax dollars (roads, etc).

[Libertarianize the GOP]

ping

[gubamyster]

ping

[tkathy]

This is very hard on our fragile economy, not to speak of the drain on social services.

[HiJinx]

the drain on social services.

Too true.

Someone did the math the other day on education alone. Assume a per student outlay of $5,000 - low in most cases - and an average of 4 children per illegal family - also low.

That's $20,000 per year per family. The cost to taxpayers for 12 years of education is nearly a quarter of a million dollars for each illegal family.

But they pull their own weight, right? Yeah, right.

[FITZ]

There is nothing saying those dollars must be spent in the US --- they can work their way through the Mexican economy --- bus drivers, electric companies, store owners ---- on up to the wealthy who can vacation in Spain or import goods from China.

[JustPiper]

Remittances to the region have jumped from $18 billion in 2001 to an estimated $30 billion this year, eclipsing foreign direct investment for many receiving countries as a source of capital, the report said.

The jump underscores recent shifts in the country's booming Hispanic and immigrant population.

They are draining our economy! Can you even phantom how prosperous we would be if this stopped?!