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Fewer Latinos send cash abroad

Experts say many family members in home countries will fall below the poverty line as a result.

May 01, 2008|James Hohmann | Times Staff Writer

WASHINGTON — An aggressive crackdown on illegal immigration and a weak U.S. economy have driven an estimated 3.2 million Latinos to stop sending money to family members in their home countries, according to a survey released Wednesday by the Inter-American Development Bank.

The report confirms the hardships that millions of people from Mexico and other Latin American countries have been feeling. Experts say that people in Latin America who depend on remittances, or money transfers, from relatives abroad will fall below the poverty line as a result.

"I would say the decline has at least as much to do with the fear and uncertainty for the future as it does with the economic downturn because it's so significant," said Donald F. Terry, general manager of the Washington-based bank's Multilateral Investment Fund.

Of 5,000 adults surveyed in February, 50% said they regularly sent money to a family member in Latin America. In a 2006 survey by the bank, 73% of respondents reported doing so.

The 2008 report was released Wednesday, the same day that Banco de Mexico announced a 2.9% drop in remittances. The central bank said Mexicans abroad sent $5.3 billion home during the first three months of this year, compared with $5.5 billion during the same period in 2007.

Kathleen Newland, cofounder of the Migration Policy Institute, a nonpartisan research center in Washington, said remittances reduced poverty in a direct way.

"A slowdown in remittances is therefore going to produce a rise in poverty in Mexico," she said. "That's a particular concern when people are coping with seriously rising prices, especially for fuel and food."

As people fall below the poverty line, Terry said, they feel pressure to pursue better jobs in the U.S.

Eighty-one percent of those surveyed in February said it was more difficult now than a year ago to get a good job in the U.S. About a third said they planned to return home in the next few years.

Critics of illegal immigration said the survey was a signal that increased law enforcement was working.

"That's one more piece of evidence that illegal immigrants respond to incentives just like anybody else," said Mark Krikorian, director of the Center for Immigration Studies, a Washington-based think tank that advocates greater immigration restrictions.

California led the nation in the total amount sent back with $14.6 billion. The percentage surveyed who regularly sent money home dropped from 63% to 52% between 2006 and 2008.

An 11% increase in total money transferred by Latin American immigrants is expected in California this year -- but it will come from fewer people sending more money. The average person sends money home 15 times a year, and the average transfer is $325.

The 5,000 telephone interviews were conducted from Feb. 9-23. The margin of error is 1.4 percentage points.

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james.hohmann@latimes.com

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