Estimated $18 Billion/ Year Flows into US Via Remittances
The United States receives about $5.6 billion a year in remittances from other countries. Eighty-two percent of the money is being sent to U.S. residents who were born abroad.
That’s according to data released last week by the U.S. Census Bureau, which for the first time asked residents of more than 50,000 households about the remittances they have sent and received over the past two years.
The Washington, D.C.-based organization Inter-American Dialogue, believes these are very conservative estimates, since according to its own calculations, which take into account a web of migration networks, the amount of money sent to the United States each year in remittances reaches $18 billion.
In any case, there is no doubt that the world’s largest economy not only sends money to other countries in the form of immigrants helping out their families, but U.S. residents also receive help from their loved ones abroad.
"With this global economy, people move in all directions. It’s no longer just people from rich countries sending money to people in poor countries," said Peter Morici, professor at the University of Maryland’s Robert Smith Business School, who notes that the difference in currency value could be a determining factor in sending remittances.
"The Census has always had a lot of problems counting immigrants," Manuel Orozco, director of the remittance and development program at Inter-American Dialogue, said when asked about the difference in the estimates. "For example, they say there are only two million Americans living abroad, when there are many more."
The organizations and economists consulted by La Opinión agree on two points. One is that part of the remittances coming into the United States are going to college students from other countries who are studying here. An estimated 80 percent of the 600,000 foreign students receive some kind of economic stipend from outside the United States.
The other point is that retirees in the United States often receive money from relatives abroad. Some U.S. workers who work for foreign companies also receive their paychecks from abroad.
Canada and the United Kingdom represent 30 percent and 17 percent, respectively, of the remittances coming into the United States. Among Hispanic countries, Spain and Mexico send the most to the United States, with a combined total of more than $757 million.
"The increase in immigration, both legal and undocumented, and the number of foreign students, along with retirees here and abroad, are what have increased the flow of remittances in both directions," according to Robert Scott, an analyst with the Economic Policy Institute.
Compared to the amount of remittances the United States sends other countries, an estimated $11.7 billion a year according to the Census, the proportion of money that stays abroad drops to $6.1 billion, after subtracting the amount this country receives. But this figure is also too conservative, according to Inter-American Diaologue, which estimates that the United States sends more than $116 billion a year in remittances.
Manuel Orozco, however, dismisses the notion that the economic crisis has forced immigrants living in the United States to ask for money from their home countries. This happens in isolated cases, he says, but is not happening on a large scale.
"People here sometimes send money home to put it into savings or as an investment, and when they need it, they’ll ask for it again for their survival,” said Lidia Reyes Flores, director of Latino Family Services, an organization that helps immigrants in Detroit. "Like now, when people here who work in landscaping are no longer working, and everyone is rushing to get money."
"There are other people who buy a house in their country when things are going well and they make plans that they don’t end up following through with, and they end up selling it to get the money so they can continue to live here," added Reyes Flores, who has seen cases like this when she helps families with their taxes.
This is the case of Adriana García, who lives in Los Angeles. Since her father died three months ago, she has been trying to sell some land that he had bought in Mexicali. Her mother has decided not to go back to the city, so she is now hoping to find a buyer who can help her deposit the money from outside the United States.
"The economy is difficult. My husband works as a day laborer with what work he can get and we need money,” García told La Opinión. "That money is going to go to pay the cost of the funeral, because we had to ask a bank for a loan, and we still have hospital bills because my dad didn’t have insurance."
One percent of U.S. households interviewed in the Census survey said that they both send and receive remittances. "If you just got to the United States, you’re probably going to need to receive money from elsewhere in the first few months so you can pay the rent and get settled. And when you are, then it’s the migrant who begins to send remittances to their country because they are able to make it on their own," said Elizabeth Grieco, one of the authors of the Census report.
"I suspect that this is more common among students, who live here cheaply and send their savings home," said Scott. "It’s the same money; it’s just that the stipend they get from the government is going back to their family."
Translated by Elena Shore.