Immigrants Pay Lower Fees to Send Money Home, Helping to Ease Poverty Natalie Kitroeff - The New York Times
go to original April 28, 2013

Carmen Gonzalez, who immigrated from Mexico in 1991, says that the cost to send money home has dropped from $12 to $5. (Kirsten Luce/The New York Times)

The first time Carmen Gonzalez sent money back to her family in Mexico, in 1991, Western Union charged her a $12 fee to wire $100. She earned that $12 working for six hours in a clothing factory in midtown Manhattan, which paid her $2 an hour.

These days Ms. Gonzalez pays $5, which she earns in less than an hour, so she sends a bit more. The family is benefiting from a financial transformation propelled by new technology and increased competition that has driven down the average cost of sending money to Mexico by nearly 80 percent since 1999.

The drop in fees saved Mexican immigrants about $12 billion over the decade that ended in 2010 — five times the amount of official United States aid to Mexico during that time, according to data from the World Bank and recent Mexican government figures. The cost of sending money to other countries has also declined sharply, though not by quite as much.

The benefits are far-reaching, development experts say, providing a powerful means to chip away at poverty in other countries and expanding the hard-won earnings of immigrants in the United States.

The lower costs may be one reason that remittances have held steady even as fewer immigrants from Mexico have come to the United States and the recession has cut into incomes. Overall remittances to Mexico declined during the global recession but picked up again after 2009.

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