Latinos sending more money back home

Two young men from El Salvador are regulars at a money-wiring business called Los Gallos 10 on the west side of St. Paul. Charlie Garcia waits while his cousin confirms his transaction at the teller. His cousin is sending money to his mother. This is what they do at least once a month. They aim to send money home every 15 days.

Charlie Garcia says there's a lot of poverty in El Salvador and unemployment rates are high. At one point, he was earning only $40 a month.

"I'm a college graduate in El Salvador. I have my degree and I spent almost two years job-hunting and I never found anything," says Garcia. "So that's why I decided to move here."

Garcia is like many immigrants surveyed in a recent report by the Inter-American Development Bank (IDB), one of the biggest lenders to Latin America. Garcia moved to the United States seven years ago to work, send money home, and save. His mother is sick and can't work. So his money is her major source of income.

The IDB report shows seven out of 10 immigrants in Minnesota will have sent almost $300 million to Latin America by the end of 2006.

Greg Watson, consultant for the bank's multilateral investment fund, says more immigrants are sending money, and the average amount sent is also going up.

"New immigrants tend to send home more money than immigrants who have been in the country for two to three years," says Watson. "So you've got $300 now as opposed to $200 in the past. And so if you've got a new immigrant population, they're also going to be sending a higher proportion of their income as remittances."

Worldwide, wiring money is one of the most popular ways to help alleviate poverty.

The Latino population in Minnesota grew by almost 20 percent from 2000 to 2004. Watson says the report shows immigrants are becoming drawn to states with strong economies, instead of states with large Latino populations.

Art Rolnick, vice president and director of research at the Federal Reserve Bank in Minneapolis, says even though Minnesota is far from the border, immigrants still move here for better wages than in other states.

"As the jobs that are available -- or are created -- in some of these states like California or Arizona dissipate, you could see where a state like Minnesota, even though it's farther away, would be very attractive," says Rolnick.

For all the money that's leaving the state, the IDB's Greg Watson says the real story is 90 percent of immigrants' income stays here.

"That means that immigrants are purchasing foods and services locally," says Watson. They're paying rent, they're going to the supermarket and buying food, and that's creating jobs and creating income in their local communities in the United States."

Even the money immigrants send home can come back when countries purchase goods from the U.S. For example, Minnesota has recently started to court Mexico with its soy products. According to an association called the Mid-America International Agri-Trade Council, Mexico's health market has been growing and their fastest growing sector is soy products.

For the receiving families in Latin America, the money is a decent source of income to pay for bills, buy groceries and medicine, and so on.

Greg Watson says lower wire fees put more money in the families' pockets. He says worldwide, wiring money is one of the most popular ways to help alleviate poverty. The report also shows about one-third of immigrants have started investing in real estate in their homeland.

Charlie Garcia was able to pay for two surgeries -- one for his mother, one for his aunt. Although he'd rather be in El Salvador, he has no regrets about coming to Minnesota for now.

"I've come here to work a job I've never wanted to do. One day, I'd like to go back to my country and pursue the career I've always wanted," says Garcia. "But with my wages here, I'm helping my family and I'm helping myself."

Garcia's money not only pays for his family's basic necessities. Part of the money is also going toward the construction of a house -- the house he plans to live in when he moves back.

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