You think Mitt Romney sends a ton of money overseas? He does of course, but the humblest of Mexican day laborers and his hardworking colleagues can easily compete with Mitt and his posse dollar for dollar. It’s done in the form of remittance. Every year an estimated 20 – 26 (the record) billion dollars make their way from the U.S. to Mexico via wire transfers from banks and Remittance Transfer Providers (RTPs) like Western Union and Xoom. So for roughly 5 bucks, you can send family members in Mexico nearly $3,000 or about 42,000 pesos. That’s not too far removed from what the average Mexican worker makes annuallly in his/her home country. An estimated 20% of the Mexican population is on the receiving end of money from the United States. Generally sent in $100 increments or so, a number of times a year. The total is usually a bit more than $2,000.
Another 50 – 60 billion lands in Latin America and the Caribbean, most of it from the U.S. Amounts can vary fairly significantly with the American economy and the recipient country yearly totals. Mexico is pretty stable; India fluctuates wildly. But even at the lower end of the remittance scale that’s major, major $$$ saying bye-bye to the stars and stripes.
A frustration of those who keep track of such things is the inability to make accurate dollar estimates. In addition to the Western Union types and banks, there are numerous other sources of difficult to trace remittance pathways that include cash, returning relatives and shipping hard goods. Then there’s the illicit drug sales where U.S. authorities estimate that anywhere from $15 Billion and up slips over the border to Mexican drug lords, not counting legitimate remittance transfers. And there are other drug lords in South and Central America not to mention the Italian and Russian Mafias who tinker in the drug trade. An additional $50 billion could easily find its way into bad guy hands globally. Side note: Worried about terrorists with nuclear weapons? Keep your eye on the Russian mob as likely potential suppliers.
Add up the damages and U.S. migrants and their ne’er-do-well cousins probably send at least a 1 or 2 trillion to global destinations over a decade’s time. Now, I do want to stay true to my democratic roots here. The impact on underdeveloped nations can be virtually life saving. The hundreds of billions in annual worldwide remittances are far in excess of any international redevelopment assistance organization and a number of countries would sink into inhuman oblivion without those monies. A New York University study of the question spearheaded by Philosophy Professor and Lecturer, Christian Berry and Social Science Researcher, Gerhard Overland spelled out the benefits for these otherwise desperate countries.
The men start the study by citing the advantages to the host country. There are extra nationalistic and family incentives for migrant workers to work long and hard for their newly adopted country. Therefore, they are not only good and productive workers, but their work product will be of benefit to their employers and the U.S. As for those receiving the benefits of remittances, the most obvious is that they have a bigger bottom line. More money for the necessities of food, clothing and shelter with presumably healthier families as a result. A simple supporting comparison was made from Sri Lanka where the weight of children under five in families receiving remittances was greater than the same child living in a non-recipient home.
A World Bank study found that the more people who live abroad from a particular country, thereby increasing remittance, the less poverty in that home county. The exact correlation was a 1.9% decrease for every 10 percentile increase in international migration. Not everybody is wild about coming to the U.S., Europe is a popular destination as well. Many remittances are sent conditionally to family members who must promise to put the money to its best use like education and creating small business enterprises. That seems to be the case in most instances.
On a macro-economic scale, in certain countries, the money can even have the effect of shoring up currencies, as in Nepal and El Salvador. In total, it’s hard to disagree with the NYU findings. Nobody is saying that remittances are a bad thing. What some Americans are saying is that it might just be cheaper to provide direct foreign aid (dozens of Tea Partiers just fainted) and keep more of that money in the U.S.
One thing that needs to be said and acknowledged is the true story behind this phony push for stronger immigrant laws. There’s enough law-breaking by U.S. businessmen in the hiring of so-called illegals to double the current prison population. If you’re in the farming, construction or landscaping business chances are probably better than 50/50 that you’ve cheated like an SOB in the hiring of illegal immigrant labor from Mexico and a surprising total from Central America. There are enough fake SS cards floating around this country to fill Yankee Stadium. How much tax money do you screw the government out of?
And you talk about ‘soft’ on crime. Read deeply into some of these tough on illegal immigration state laws and you’ll see that the enabling farmers, construction companies and landscaping businesses are basically given a pass the first few times around and even when their crime can no longer be ignored they’re fined a few bucks and told to get back to their illegals.
So that’s the story of remittance. Much of the outgoing billions are strictly legal and meet all the requirements of the law. Too much of it is embarrassingly and expensively unaccounted for over time. It’s costing us way too much potential revenue and right now, we’re too politicized to fix it.