Fewer Latin Americans sending money home from the United States, survey finds

Immigrants cite economic slowdown, discrimination as top concerns in poll commissioned by the Multilateral Investment Fund Fewer Latin Americans are sending money home regularly from the United States to their homelands, according to the results of a survey on remittances commissioned by the Inter-American Development Bank’s Multilateral Investment Fund (MIF) presented today in Washington, DC.

The poll, conducted in February 2008 among 5,000 Latin American adults living in the 50 states and the District of Columbia, found that only 50% of the respondents were still sending money on a regular basis to their families, down from 73% in a similar poll conducted in 2006.

The principal causes for this drop cited by migrants were the slowdown in the U.S. economy and the harsher climate against immigration in this country, said MIF General Manager Donald F. Terry, who presented the survey’s result in a news conference held at the National Press Club.

“Starting in 2000, remittances from the United States to Latin America grew steadily, as more immigrants sent more money more often to their relatives back home. During the past several months, however, this pattern has changed dramatically,” said Terry.

Most immigrants (81%) said it was more difficult to find better-paying jobs now than one year ago, while 40% said they were making less money than in 2007.

In contrast with the results of the first state-by-state poll on remittances conducted in 2001, when only 37% of respondents said they considered discrimination against immigrants a major problem, in the latest survey 68% said it was a great concern, according to pollster Sergio Bendixen.

“The survey clearly indicates that millions of Latin American immigrants are now fearful about their futures in the United States and no longer feel that they can afford to send remittances to their families,” said Bendixen, who has been conducting polls for the MIF since the year 2000.

Despite the lower percentage of Latin American immigrants sending money home regularly, those who continue to make remittances are doing so more frequently and for larger amounts, according to the survey.

As a result, the volume of remittances from the United States to Latin America would remain largely unchanged in 2008 when compared with the previous two years. According to Terry and Bendixen, the total this year should be around US$45.9 billion.

While the volume may remain steady, the fact that millions of immigrants are not sending money home regularly to their families means economic hardship for millions of households in Latin American countries where remittances are a key source of income.

“If the current trend holds over the next year, we would expect millions of families throughout Latin America who until recently had been receiving remittances to fall below the poverty line,” Terry said.

Typically, immigrants from Latin America are unskilled laborers who did not have full-time jobs before they moved to the United States. Among the survey’s respondents, the average monthly income was about US$160 in their homelands. In the United States they make an average US$1,600 a month.

“The economic magnet that attracts Latin Americans to the United States is still very powerful. Millions can increase their monthly incomes by a factor of six simply by crossing the border into this country,” said Bendixen.

State-by-state estimates - According to the survey’s results, remittances from some states to Latin America will drop this year while migrants in other states are due to send more money home than in previous years.

The largest drops, in percentage terms, would take place in Pennsylvania, Texas, Georgia, Maryland and Virginia. On the contrary, states with the largest expected increases are Nevada, Colorado, Washington, Massachusetts and California. (See state-by-state map of remittances)

Remittances to Latin America will top US$1 billion in 10 states (California, Texas, New York, Florida, Illinois, New Jersey, Georgia, Arizona, North Carolina and Virginia). California, by far the state with the largest population of Latin American-born adults, will send about US$14.6 billion south of the border this year.

The 2008 survey on remittances to Latin America was conducted by telephone and has a margin of error of 1.4 percent.

About the MIF - The Multilateral Investment Fund, which is administered by the Washington, DC-based IDB, promotes private sector development in Latin America and the Caribbean, with an emphasis on microenterprises and small businesses.

The MIF started studying remittances in the year 2000 to gauge their economic impact. Through its work, the MIF has encouraged competition among service providers. Over this decade, the cost of making money transfers to Latin America from the United States, Europe and Japan has dropped significantly, allowing migrants and their families to keep a larger portion of their earnings. | Pollster Sergio Bendixen (L) and MIF General Manager Donald F. Terry presented the results of a survey on remittances from the United States to Latin America at a news conference held at the National Press Club in Washington, DC.