Thread: Remmittances spawn mini-industry in United States

http://www.sbsun.com/Stories/0,1413,208 ... 62,00.html

Remmittances spawn mini-industry in United States
By Mason Stockstill
Staff Writer


Sunday, July 10, 2005 - Which costs more: sending $200 via Western Union to Ohio, or sending the same amount to Mexico? The fact that it costs 27 percent less to wire money to Mexico, even after calculating the unfavorable exchange rate offered by the agency, shows how important the tens of billions of dollars sent overseas by immigrants living in the United States can be.


Immigrants in America were responsible for the vast majority of the $16.6 billion in remittances that flowed into Mexico in 2004. Billions more went to other countries. According to the International Monetary Fund, the United States is the source of about a third of the $140 billion in annual worldwide remittances.


On the national level, that money is a drop in the bucket for the $12 trillion U.S. economy. But for the immigrant communities where millions of dollars are sent home rather than being spent here, the remittance flow can have a negative effect.


"Money that would otherwise go toward saving for children’s educations, buying a second hot dog cart, fixing up a house in a dilapidated immigrant neighborhood – that money isn’t being spent on those things," said Mark Krikorian, director of the Washington, D.C.-based Center for Immigration Studies. "It’s going home."


Krikorian said dozens of studies have analyzed the impact remittances have on the developing countries they’re sent to, but very few look at how that loss of income affects the sending countries.


While it’s true that funds sent to impoverished family members across the border go a lot further than they would in America, Krikorian said the money could be put to good use here.


For example, for each Mexican immigrant in America, about $1,600 is delivered to friends or family every year – almost enough to pay the tuition for one student at a California state college.


In California, the U.S. Census Bureau estimates only one in 10 children of Latino immigrants obtains a college diploma. The statewide average for all ethnicities is one in four.


Additionally, more than 40 percent of immigrants lack health coverage, according to the census, though many insurers offer basic family plans for $200 a month or less.


"It is a drain in terms of the resources that Latino communities have to build up with their own resources in the U.S.," said Louis DeSipio, a professor of Chicano/Latino students at UC Irvine. "Individuals have the right to do with their money as they please . . . but at the same time, it’s a shame that there is not a way that those resources can be spent in the U.S."


Meanwhile, the money transfer industry has found a way to take a cut of the more than $100 million sent out of America every day. Those millions are part of a hotly contested battle for market dominance that pits huge banking conglomerates against a 154-year-old telegraph company, its smaller rivals, and a handful of locally owned firms that cater to the Latino community.


Until recent years, the cross-border flow of money went unnoticed by financial institutions like large banks. It was only in 2002, when remittances to Mexico had swelled to $9.8 billion, that banks such as Wells Fargo and Bank of America began to allow Mexican immigrants with only consulate-issued ID cards to open bank accounts – paving the way for easier money transfers.


Since then, several different ways of transferring money from America to Mexico and other countries have cropped up, including binational credit cards and ATM accounts where deposits can be made in the United States for withdrawal elsewhere.


Still, those banks only account for about 3 percent of the 45 million U.S.-Mexico electronic transactions each year, according to the Central Bank of Mexico. The rest is handled by money-transfer firms such as Western Union, MoneyGram and smaller, locally owned companies.


The fees charged by those companies for sending money abroad vary greatly, but considering the United States was the source of $38 billion sent from immigrants to family and friends in Latin America in 2004, that means at least $4 billion in transfer fees are up for grabs each year.


Those fees have dipped in recent years, following a successful class-action lawsuit against Western Union and efforts by the presidents of both the United States and Mexico to lower the cost of remittances.


"Our two countries have made it a priority to keep hard-earned money in the hands of those who need it most," President Bush said at a news conference in Mexico last year.


Krikorian said he’s heard a few suggestions for how to keep more of that money in the local economy, such as creating a tax on remittances. But as long as the money is needed for family members overseas to survive, immigrants will continue to send it home.


"I’m not sure that there’s a policy response for that," he said. "If anybody has any ideas, I’m eager to hear them."

Originally Posted by Brian503a

"Money that would otherwise go toward saving for children’s educations, buying a second hot dog cart, fixing up a house in a dilapidated immigrant neighborhood – that money isn’t being spent on those things," said Mark Krikorian, director of the Washington, D.C.-based Center for Immigration Studies. "It’s going home."

Let's see. My family lives in a house with no electricity or plumbing. My nephew would starving. My mother has a bleeding ulcer and other problems that would lead to severe suffering followed by death if she didn't get basic medical care. What should I do with the extra $500 I have?

This is what's commonly referred to as a "no brainer".

Let's see. My family lives in a house with no electricity or plumbing. My nephew would starving. My mother has a bleeding ulcer and other problems that would lead to severe suffering followed by death if she didn't get basic medical care. What should I do with the extra $500 I have?

This is what's commonly referred to as a "no brainer".

Yawn....

Originally Posted by Virginiamama

Let's see. My family lives in a house with no electricity or plumbing. My nephew would starving. My mother has a bleeding ulcer and other problems that would lead to severe suffering followed by death if she didn't get basic medical care. What should I do with the extra $500 I have?

This is what's commonly referred to as a "no brainer".

Yawn....

O really. I'm telling you like I said it's not that interesting. It doesn't require much thought at all. No Brainer!

Let's see. My family lives in a house with no electricity or plumbing. My nephew would starving. My mother has a bleeding ulcer and other problems that would lead to severe suffering followed by death if she didn't get basic medical care. What should I do with the extra $500 I have?

This is what's commonly referred to as a "no brainer".

A "no brainer" is right Jose! Your sick and starving family members are living with no electricity or plumbing....in a homeland which is raking in BILLIONS via it's natural resources (not to mention the buku "aid" the U.S. sends). Where is it all going Jose?

The BRAINY thing to do Jose, would be to TAKE BACK YOUR OWN COUNTRY! I have no respect for spineless wimps that would choose to flee (and leech from a foreign host) rather than to stay and FIGHT for their own motherland.

These illegal invaders can fly their flags (so PROUD of the country that they are compelled to leave?) and huff & puff all they want. The truth is...they are nothing more than cowardly deserters...BIG TIME.

Originally Posted by greyparrot

I have no respect for spineless wimps that would choose to flee (and leech from a foreign host) rather than to stay and FIGHT for their own motherland.

Many of those that, in the past, did stay and try to take back their own country ended up having to fight terrorists sponsored by the USA.

The truth is...they are nothing more than cowardly deserters...BIG TIME.

You're certainly not in a position to judge these people so your judgement should be taken with a grain of salt. Our country was founded by people that you call "cowardly deserters". "Cowardly deserters" as you call them left their families, left their homes, left everything that they knew and risked everything including their lives to go to a distant unknown land seeking freedom. Some people call them pilgrims. You call them cowardly deserters.

Jose....what are you talking about?

Are you pro-illegal immigration into the United States?

No one can come here now just because they seek "freedom".

If that were legal, there would not be a square inch of the United States left for a blade of grass or farmland to grow our food or forests to cleanse the air we breath.

AND, Americans are in EVERY POSITION to judge these people.

This is our country and we decide who comes here.