He gets a job within the first week of illegally entering this country, yet the story is -sob-sob-sob! Kleenex must be making a fortune.

Poor workers scrimp, send money home
$45 billion will be shipped back to families this year, survey says

Daniel González
The Arizona Republic
Dec. 11, 2006 12:00 AM


The immigrants who send money home to family in Latin America are a frugal lot.

Take Martin Armenta, for example. The Phoenix resident takes home $380 a week after taxes from his job as a cook. Yet he sends more than a third of his paycheck to his wife and two children in Sonora.

How does he do it? With some serious scrimping. Armenta, 31, shares a three-bedroom house with seven other immigrant men, watches TV for entertainment and never goes out to eat.

Latino immigrants such as Armenta will send $45 billion home this year, up from $30 billion in 2004. Yet they tend to be poor by American standards, with the majority earning less than $30,000 a year, according to a survey by the Inter-American Development Bank.

The survey sheds light on the explosive growth of remittances and the role they play in alleviating poverty, influencing migration and shaping economic policies in developing countries. It also underscores the tremendous potential remittances hold for fostering economic development in the U.S. and abroad.

Experts have known for years that immigrants send wads of cash to relatives back home. But the Inter-American Development Bank study found that the average amount sent per month has climbed to $300, up from $240 in 2004, even though the average sender earns only $900 a month.

"They are hard-working people trying hard to improve their families' lives, hardly the people anti-immigrants groups describe . . . as people who cross the border to take advantage of this country," said Rodolfo de la Garza, a political science professor at Columbia University who has studied remittance behavior.


Remittances as baseline
Remittances help alleviate poverty in poor countries like Mexico, which receives about halfof the $45 billion Latino immigrants send home. But the money also absolves governments in developing nations from investing in the poor, "and that's really criminal," de la Garza said.

Some experts believe remittances help slow illegal immigration to the U.S., by providing family members with enough money to pay for food, clothing and other necessities.

"It reduces some pressure for migration," said Louis DiSipio, political science professor at the University of California-Irvine.

Others, however, say remittances may actually accelerate illegal immigration by financing trips north. What's more, every dollar sent to Mexico or somewhere else in Latin America is one less dollar spent in U.S. communities, where the economic loss is felt most in places with fast-growing immigrant populations like Phoenix.

About one in 7 Mexican workers, or about 14 percent of Mexico's workforce, lives in the U.S., according to the Migration Policy Institute, a research center in Washington, D.C. The challenge ahead, experts say, is harnessing the untapped economic development potential of remittances in ways that could benefit both sides of the border.

The key to creating jobs and other forms of economic development in Mexico and Latin American countries will be using remittances to finance micro-loans and mortgages. Those types of banking tools are currently unavailable to most poor people in Latin America, said Sergio Bendixen,a Miami-based pollster who surveyed 2,511 Latino immigrants for a study of remittances commissioned by the Inter-American Development Bank.

Communities in the U.S. also stand to benefit from remittances by creating co-ops that encourage immigrants to invest money here instead of sending it home, de la Garza said.


Sending more home
The Inter-American Development Bank survey found that between 2004 and 2006, the percentage of immigrants sending money regularly increased from 61 to 73 percent.

Still, the majority of immigrants who send money home earn wages considered working-poor or lower-middle-class by U.S. standards. About three-fifths earn less than $30,000 a year. A third earn less than $20,000, according to the survey, which was released in October.

About half of Latino immigrants find a job within a month of arriving in the U.S., the survey said. The first jobs they find tend to pay low, about $900 a month. But on average that is six times the amount they were earning in their home country.


Frugal lifestyle

Armenta was luckier than most. He landed a job cooking barbacoa, carnitas and other Mexican food at a carnicería just a week after arriving in Phoenix in September.

The undocumented immigrant said he walked for two days through the desert after crossing the border illegally near Douglas. Before coming to Phoenix, he was earning about $170 a week in construction in Mexico but had recently lost his job.

In Mexico, incomes vary widely, but government information suggests that the vast majority of Mexican workers makes less than $21 a day.

Armenta said he sends money home to his wife and two children, ages 9and 3, every week to help them buy food, clothing and medicine. The family owns its home in Ciudad Obregón, the second-largest city in Sonora.

He pulled out several receipts wadded up in his pocket. One, dated Oct. 2, was for $160. Another, dated Oct. 9, was for $130. A third, dated Oct. 16, was for $160.

"How much I send depends on what my expenses are that week," said Armenta, sliding a pot of water over a gas burner.

His biggest expense is a $150-a-week car payment for the 1990 Ford pickup truck he bought shortly after arriving in Phoenix. The remainder of his $380 weekly paycheck goes to pay for auto insurance, gasoline, rent and food. Armenta's monthly share of the rent, split eight ways, is about $230, including utilities. The only furniture in the house he rents is a sofa and a few chairs. For entertainment, Armenta watches TV. He doesn't have cable. He also doesn't have a bed. He said he sleeps on the floor.

Armenta said he never goes out to eat.

"It's cheaper to cook at home," he said.



Reach the reporter at daniel.gonzalez@arizonarepublic.com or (602) 444-8312.

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