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Migrant workers' money critical for growth
By Shihoko Goto
UPI Senior Business Correspondent
Published March 24, 2005

WASHINGTON -- The number of illegal immigrants entering the United States from Latin America continues to reach record levels, which has renewed concern about the current state of U.S. immigration laws. But while the number of those calling for stricter border control to ensure homeland security as well as to keep government spending on social services under control, there is no denying that migrant laborers provide a critical role in the U.S. economy, regardless of their legal status. What's more, they are playing an ever-increasingly important role back home.

The Inter-American Development Bank, an international financial institution that specializes in lending money to some of the poorest countries in Latin America and the Caribbean, reported earlier this week that Latinos living outside their native country send back a record $45.8 billion to their homelands in 2004. That was nearly 20 percent higher than the amount of money they sent back home in 2003, when the figure reached $38 billion.

While the average worker usually sends only about $100 to $300 at a time to family members, about two-thirds of the 25 million Latin Americans and Caribbean-born adults living abroad send money home on a regular basis. That sum adds up, and as a result, remittances actually "exceeded the combined totals of overseas aid and foreign direct investment received by the region," the IDB reported.

Of the total remittances sent back to Latin America and the Caribbean, about 75 percent came from migrants working in the United States. Meanwhile, Mexico was the top destination for the U.S.-made money, receiving $16.6 billion last year alone. In second place came Brazil with $5.6 billion, while Colombia was third with $3.9 billion.

The IDB's multilateral investment fund manager, Donald Terry, pointed out that such significant sums of money was flowing from richer nations to poorer ones not because of some government incentive, but purely from family ties.

The workers who send money back to Latin America "are transitional families, living and contributing in two countries, two economies, and two cultures at the same time."

Terry added that the surge in remittances was a clear indication that new political and economic rules had to be drawn up "to match new realities."

Certainly, the importance of money repatriated to Latin America by lower wage earners is being widely recognized by governments across the region. Indeed, one key factor for Mexico's President Vicente Fox to push for greater flexibility by U.S. authorities to accept Mexican workers into the country is precisely because money made by Mexicans working in the United States plays such a key role in the Mexican economy.

But the economic importance of Mexican workers is far from a one-way street. Those pressing for more open immigration policies point out that migrant workers, especially those who are working illegally under brutal conditions play a key role in U.S. industry and keep overall costs low, thereby boosting productivity in the United States.

As a result, President Bush too reaffirmed his commitment to change the current immigration regulations which he himself has acknowledged are not keeping up with the reality of the situation. So it came as no surprise when both Bush and Fox, together with Canadian Prime Minister Paul Martin, agreed at a joint summit meeting this week to reform the immigration system.

The problem, however, is that illegal immigration in particular has a number of considerable downside risks as well, especially when it comes to securing the nation's border. Indeed, there is increasing concern about the porous nature of the U.S. border with Mexico, as the number of people who cross the line illegally continues to rise, which in turn has heightened concern about drug traffickers as well as terrorists crossing the border along with the economic migrants.

For instance, the Pew Hispanic Center reported earlier in the week that there are currently nearly 11 million illegal immigrants in the United States, of which six million come from Mexico. The center added that between 80 and 85 percent of those born in Mexico currently in the United States came to the country illegally.

The center's study also found that the illegal immigrant population is now far more widespread across the United States than it was 15 years ago, with almost 40 percent now living outside of the six states that have traditionally attracted the most immigrants. Moreover, illegal aliens make up 29 percent of all immigrants in the country, while 61 percent are legal permanent residents, and three percent are in the country temporarily but legally.