US economic slowdown affecting remittances sent back to region

WASHINGTON DC, United States, May 1, 2008 – A recent survey on remittances has shown that fewer Latin Americans are sending money home regularly from the United States to their homelands and they’ve pointed to economic slowdown as one of the reasons for holding back.

The results of the poll, commissioned by the Inter-American Development Bank’s Multilateral Investment Fund (MIF) and presented yesterday, indicated that only 50 per cent of the respondents were still sending money on a regular basis to their families, down from 73 per cent in a similar poll conducted in 2006.

MIF General Manager Donald Terry who presented the findings said the principal causes for this drop cited by migrants were the slowdown in the US economy and the harsher climate against immigration in this country.

“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 Mr Terry.

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

Pollster Sergio Bendixen added that in contrast to the results of the first state-by-state poll on remittances conducted in 2001, when only 37 per cent of respondents said they considered discrimination against immigrants a major problem, in the latest survey 68 per cent said it was a great concern.

“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 Mr Bendixen, who has been conducting polls for the MIF since 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. It is projected that the total this year will be around US$45.9 billion.

But 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,” Mr Terry said.

Typically, immigrants from Latin America are unskilled labourers 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 poll, conducted in February 2008 among 5,000 Latin American adults living in the 50 states and the District of Columbia, was conducted by telephone and has a margin of error of 1.4 percent.