Influx Has Everything to Do with Remittance Culture

July 25, 2014
By

The idea that the streets in America are paved with gold has always been a nearly undefeatable idea in the Third World.

The hope that if one can just get to the promised land – the American land of opportunity – that earning money will be easy and relative riches will literally be handed over. I’m sure it’s a belief that brings about the necessary hope that is required to make it through a difficult life of poverty; in fact, I’m certain that’s the case because I have personally heard those laments over the telephone and in e-mails or Facebook postings.

However, the reality is that once one arrives in an American place like Chelsea, the streets are not paved with gold.

The harsh reality for so many that came here illegally (and some legally) from Central America over the last 10 years is that things aren’t easy. Many came here with the belief that they would live comfortably – changing the prospects of a family overnight. In large part, millions of those that came were men, husbands, breadwinners, responsible people looking to nab a few golden streets to send back home via Western Union or Ria or whatever new multi-service center is popular/cheap.

But a hard journey northward led to even more difficult times once here as these men struggled to make very little money and could ill afford to live. Some became estranged from the very families they had come here precisely to support, and inflation back home made their dollars less valuable.

Some of these men eventually re-married once here for awhile; or they fell into a life in the fast lane; or they just become lost in a far away place.

And they didn’t send as much money as they had hoped.

But make no mistake, they did and still do send money.

The Record reported last year that in 2012, nearly $250 million cash left the communities of Chelsea, Revere, East Boston and Everett in the form of remittances (money sent back to one’s home country). Some $2 billion left the state of Massachusetts alone in 2012. That’s a fortune, and most of it went to Central America – specifically El Salvador and Guatemala. The paper is still waiting to get those same numbers for 2013 from the state, but early reports are that even more was remitted.

Consulates from those countries told the Record in that very same report last year that their countries are deeply dependent upon money sent to family members from American relatives. It has become an important part of life in their countries.

And so what about those countries?

If you talk to assimilated natives of those particular countries – and really any country with a large remittance culture – they will tell you (maybe only secretly) that sending so much money home has ruined the society. People who keep residences in their home countries will tell you that they cannot find anyone to hire in order to maintain those properties. So many formerly hard-working people prefer to just wait for the weekly remittance from America. Why work when money just pours in from Western Union regularly?

This isn’t only in Central America, again. It’s the status quo wherever large sums of remittance money make up a significant portion of a country’s Gross Domestic Product (GDP).

Then there’s the problem with what happens to a poor economy when so much money starts rolling in without anything being produced or anybody earning said money. Prices skyrocket for food and housing. Land prices go through the roof. Heavy taxes are imposed. Everything all the sudden costs way more than it did, and the money that rolls in suddenly isn’t enough. The more money that is sent, the shorter it stretches.

Then the frantic phone calls begin to come – the money you sent isn’t enough. We need more.

What once cost $1 is now $10.

Now, there are hundreds of first-person reports of dangerous, blood-thirsty gangs that have emerged and are terrorizing the population – especially the women and young girls, so we’re told.

Is it no wonder?

All the men, husbands and responsible folks left years ago in order to make money in America and send it home. They are not there to protect their wives or ex-wives, their mothers and daughters. As is commonly said on the farm: when no one is guarding the hen house, the fox has a field day.

Those left are criminals who have run afoul of American laws and have been deported home, or young men whose father’s have not raised them and for whom the remittance wagon has lulled them into a stupor. Worse yet, organized drug cartels take over entire cities – operating their illicit organizations and stealing remittance money.

To get away from it all, right now we have hundreds of thousands of young adults and older teens pouring over the border to get to America by whatever means necessary. They are certainly fleeing violence, but there is also an aspect of them fleeing in order to get a job and send more money home.

That was expressly said by two women who spoke last week at the Collaborative – one of which who said she needed to send money home to her mother as soon as possible. Naturally, $1 doesn’t go as far as it used to and people need to eat.

The remittance culture needs to be addressed within this debate, but no one wants to talk about it. Just like Broadway Chelsea seems to be ground zero for the unaccompanied minor debate, it is also ground zero for cash leaving the country. Millions upon millions of dollars leave the community via Broadway Chelsea every year. Just a million of that money would transform the outlook of business on Broadway. That’s why this system cripples the community – puts local business out of business because any and all disposable income is being sent instead of spent.

A few months ago, I asked Gov. Deval Patrick about this very issue when he came to Chelsea. In a one-on-one conversation with him, I told him this is threatening all the Gateway Cities in the state and also the countries where the money is going.

He had no answers, and didn’t seem to like the subject, but he did turn the conversation around on me in order to ask what I would do.

Here’s what should be done. Tax every remittance transaction with a $5 surcharge that goes directly back to a community fund that would pay for the increased services demanded by the arrival of unaccompanied minors and other malleable populations. People keep asking how are we going to pay for this influx; here’s the answer. Where there are lots of remittances, there will be lots of unaccompanied minors. Additionally, the remittance system is by and large used by the folks who need this help. Those paying property taxes to the City that support schools/services are not the folks that typically are going to need these expanded and expensive services. Is it really fair to lay it all on them?

Mr. Governor, that’s one thing I would do – and now.

If we do not address this culture, it will only become more of a vicious circle and even more people will suffer and die. The remittance culture is a phantom; a lie that really only enriches the companies that ship the money and the governments/criminals where it ends up. It might help the people for a time, but not ever as much as they had hoped. Central America is now feeling this pain of what happens when an economy imports billions of dollars a year without producing anything; what happens when families are broken up by thousands of miles via an immigration system that is complicated; and most importantly, what happens when the streets don’t turn out to be paved with gold.

  • Gordon501

    The influx also has a lot to do with the high levels of benefits that Massachusetts pays to illegals. I frequently travel to Costa Rica & Dominican Republic on business; on several occasions when I have told hotel employees there that I am from the Boston area they reply by saying that “Boston has very good benefits”. Don’t think that the very generous befits that our state pays to illegals isn’t part of the equation for them to decide to come here.

  • tom

    outstanding piece of analysis

  • Emily V

    I really doubt people here without papers can get on government assistance. That comment sounds to me like it is based in bias against immigrants. Also, people who are on assistance are not living high on the hog. Just saying.

Real Time Web Analytics - Buzz Stat
Get Adobe Flash player