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Immigrants from all over the world come here to the U.S., work and send money back to their home countries. That money makes a big difference to their families and communities back home. And as the national crackdown on immigration is heating up, those payments have not slowed down. In fact, they have surged, but only to some countries. Erika Beras from our Planet Money podcast explains why.
ERIKA BERAS, BYLINE: Larisa Vargas (ph) works at Honduras’ largest bank, Banco Ficohsa. She handles the more than $1 billion that come into bank accounts from other countries through channels like Western Union and MoneyGram.
What has been happening this year?
LARISA VARGAS: Well, this year, actually, it’s been quite the year. We have had a growth of 26% increase, which is not typical. So that’s a lot, Erika. I mean…
BERAS: At first, she was curious why people were sending way more money back to Honduras – sometimes $20 extra a month, sometimes more.
VARGAS: I think they’re sending all, like, their life savings, too. We’ve seen, like, you know, remittances for 7,000, $10,000 that we know that they’re not very common and that they definitely had it saved up somewhere else.
BERAS: As of September, Honduras had received about as much in remittances – that’s the money migrants sent back to their home communities – as it did all last year, almost $10 billion. This money usually goes to fund day-to-day economic activities. In Honduras, 62% of the population lives in poverty. These remittances make up 25% of the national economy. Similar surges are happening in Guatemala, El Salvador, Haiti, which is a bit of a puzzle because you might think the opposite would be true – that immigrants would be sending less since some are afraid to go to work because of ICE.
H: (Speaking Spanish).
BERAS: H is a Honduran construction worker in California. He asked us not to use his full name because he doesn’t have legal status, and he fears he’ll get deported. He says he’s changed his behavior. He’s canceled streaming services, is buying less of everything. And he used to fly to Vegas for a fun weekend – not anymore.
H: (Speaking Spanish).
BERAS: He doesn’t want to put himself at risk, find himself in the hands of an ICE agent. I asked him, were you worried about that before?
H: (Speaking Spanish).
BERAS: No, he said, he did not have that worry before. But now he says he’s afraid to even set foot in an airport. And that same fear, he says, is also leading him to start planning for a future back in Honduras.
H: (Speaking Spanish).
BERAS: He says he and his wife are talking about how they can send their life savings back to Honduras. He isn’t yet part of the big uptick in remittances, but ideally, they want to start sending $500 a month. And this right here is the solution to the mystery Larisa Vargas spotted at Banco Ficohsa. She says she’s seen a shift as to where the remittance money is going. Like those 7- or $10,000 money transfers, instead of going to family, more of that money has been going directly to savings accounts.
VARGAS: That’s another clue that – you know, that led us on to what was happening.
BERAS: These are the financial preparations for relocating an entire life. Manuel Orozco, a remittance researcher with a think tank in D.C. called the Inter-American Dialogue, was also surprised by the surge. He says the most likely reason…
MANUEL OROZCO: Now it’s the fear of deportation that is triggering people to send as much as they can in case they are deported. So it’s sort of a precaution.
BERAS: But remittances are only surging to some countries, but not to Mexico. Mexico is the No. 1 destination for remittances from the U.S. And there, remittances have actually been falling in recent months. Manuel says that’s because Mexican immigrants, on average, have been in the U.S. much longer than immigrants from Central America. They’re less worried about deportations and less likely to be sending large chunks of their paychecks back to Mexico.
OROZCO: The longer you are living in the United States, the less likely you will be to continue sending money because there is a life cycle in the number of years sending money, and that’s 30 years. And that’s the top. Mexicans have been on average over 25 years in the United States.
BERAS: Manuel says, for the countries experiencing the remittance surge, there is one big problem. All that money, with new immigration to the U.S. freezing and deportations up, is very likely a temporary blip. These remittances are likely to decline in the near future. Erika Beras, NPR News.
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