A recent survey by the Inter-American Development Bank found that over the past two years, the number of Latino immigrants sending money home from the U.S. has dropped by more than 20 percent.
Though the amount of money transferred from the U.S. to Latin America has increased by about 1 percent to $45.9 billion, the Bank estimates that more than three million Latin American workers no longer send remittances to their home countries. Higher prices, fewer low-paying jobs, and a crackdown on illegal immigrants were cited as reasons.
The survey should be cause for concern in Latin America, where remittances have played a significant role in reducing poverty and promoting economic growth. Indeed, Professor Rafael Pampillon of Spain’s Instituto de Empresa business school notes that the total amount of remittances to Latin America is greater than the combined amount of foreign investment and development aid to the region. A May 4 editorial in the New York Times spells out the potential negative impact:
Immigrant workers are not just vital to the American economy, their money transfers are a critical bulwark against poverty for millions of people south of the border. Cutting off that lifeline will lead to more misery in some of the poorest parts of the hemisphere — and it will feed the desperation that sends more migrants to the United States.