The New York Times
May 1, 2008

Fewer Latino Immigrants Sending Money Home

By JULIA PRESTON

In a sign that the economic downturn is hitting hard among Latino immigrants, more than three million of them stopped sending money to families in their home countries during the last two years, the Inter-American Development Bank said on Wednesday.

Growing numbers of Latino immigrants are also considering giving up their foothold in the United States and returning home in response to a slump in low-wage jobs and the crackdown on illegal immigration, the bank reported in a survey of 5,000 immigrants from Latin America.

The survey found that only half of the 18.9 million Latino immigrants in this country now send money regularly to relatives in their home countries, compared with 73 percent two years ago.

“The major dynamic that is holding them back from sending money is fear,” said Sergio Bendixen, a Miami-based pollster who conducted the survey. “They don’t know whether they won’t be able to get a job anymore.”

With fewer people sending money home, money transfers to some Latin American countries have started to decline, reversing five years of often spectacular growth. In the first quarter of this year, transfers to Mexico dropped 2.9 percent from the first quarter of 2007, Mexico’s central bank reported on Wednesday, the first significant decline since Mexico began tracking the transfers in 1995.

For Latin America as a whole, the amount of the money transfers, which are known as remittances, remained virtually flat over the last two years, the development bank reported. It estimated total remittances to the region at $45.9 billion in 2008, an increase of $500 million over 2006.

That contrasts with the period from 2001 to 2006, when the amount of remittances to the region tripled, to $45 billion from $15 billion, according to figures from the development bank, a multilateral organization based in Washington that finances development projects in Latin America. Total remittances did not drop more sharply in the last two years because those immigrants who continued to send money sent larger amounts more frequently, the bank’s survey found.

“The longstanding pattern of increasing numbers of Latin American immigrants sending increasing amounts of money back home has stopped,” said Donald F. Terry, the general manager of the Multilateral Investment Fund at the development bank and the official in charge of the survey. The survey was conducted in Spanish from Feb. 9 to 23, with a margin of sampling error of plus or minus 1 percentage point.

With lower income and less job security, Latino immigrants said they were spending or saving their money here rather than sending it to support children, spouses and parents at home.

Latino immigrants said life had become more difficult for them here. Of those interviewed, 81 percent said it is harder to find a good-paying job. Almost 40 percent said they were earning less this year than the previous year. The largest group of immigrants in the survey — 18 percent — worked in construction, which has been especially hard hit in the slowdown.

As a result of the difficulties, among immigrants who had been here less than five years, 49 percent said they were thinking of returning home, while 41 percent said they planned to remain in the United States. Over all, slightly under one-third of the immigrants said they were thinking of leaving this country.

In 2001, the last time a similar survey asked a comparable question, about 20 percent of Latino immigrants said they were thinking of going home, said Mr. Bendixen, who conducted that survey as well.

However, Mr. Bendixen said that immigrant workers who participated in focus groups as part of the survey said they were not ready to leave the United States quite yet. Before taking the drastic step of moving back home, immigrants said they were taking jobs at lower wages or sometimes working two jobs to try to maintain their income, he said.

“These are resourceful people who will do whatever job is available,” Mr. Bendixen said.

The economic pressure appears to have fallen equally on illegal immigrants and those authorized to be in the United States. Of the immigrants interviewed in the survey, 47 percent said they did not have legal status. The others were legal immigrants and American citizens.

A large majority of those surveyed — legal and illegal — said they experienced increasing hostility as a result of efforts to curb illegal immigration and punish employers who hire unauthorized immigrant workers. In the survey, 61 percent of Latinos who were American citizens and 66 percent of those who were legal immigrants said discrimination had become a major problem for them.

In an interview in Phoenix on Wednesday, Yolanda, a 45-year-old illegal immigrant from Mexico who did not participate in the survey, said that she had started to think of going home, after 13 years in the United States. Before November, she was sending at least $400 a month to Mexico City to support her three children. This year she can manage only $300 every two months, she said.

Yolanda, who asked that her last name not be published because of her immigration status, said her trouble stemmed from the crackdown on hiring of illegal immigrants, fewer jobs and higher prices.

“We can’t keep up with expenses and also send money,” she said in Spanish. “If you can’t even eat, what’s the point? This is the worst it’s been, because we’ve never not had enough for food and our bills.”

Mexico, which received $24.7 billion in remittances last year, will be hardest hit by the decrease. The majority of the families of an estimated 3.2 million immigrants who will no longer receive transfers are in Mexico, Mr. Terry, the bank official, said.

Jonathan Higuera contributed reporting from Phoenix, and Elisabeth Malkin from Mexico.