Posted on Thu, Oct. 19, 2006

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More money heading home

Latinos to send about $322 million to their homelands in 2006, up from 2004, report says

By NOELLE PHILLIPS

nophillips@thestate.com

Each time Anna Naranjo wires $500 home to Ecuador, she is one of thousands of S.C. immigrants supporting families in Latin America.

This year, Naranjo and the state’s more than 139,000 other Latino immigrants will send home about $322 million, a 117 percent increase since 2004, according to a report released Wednesday by the Inter-American Development Bank.

Once the money arrives in Latin America, families such as Naranjo’s use it to buy groceries and pay utility and phone bills.

“I’m helping a lot,” she said.

Naranjo, who works at Carolina Paint and Body on North Main Street, sends her money through wire transfers. The amount varies, depending on her personal finances, but she tries to send $500 a month, or about 30 percent of her monthly income.

Naranjo, 28, a married mother of one, is part of a trend that has seen Latin America become more reliant on money transfers from the United States.

In South Carolina, the increasing amount of money passing between the state and Latin America reflects the state’s surging Hispanic population, which is one of the fastest-growing in the country, said Doug Woodward, an economist with the USC Moore School of Business.

“It’s another dimension to globalization,” he said.

Woodward has been studying how the flow of money to Latin America impacts the state’s economy, as well as foreign countries.

“It’s $322 million that would have been spent in South Carolina,” Woodward said. “But a lot of that would have been spent in Wal-Mart on goods made in China, so there’s not much of a multiplier.”

South Carolina is a new settlement area for Latino immigrants, and most have been in the United States for less than five years, Woodward said.

New immigrants send more money home than those established in the United States, he said.

S.C. immigrants are sending home about 25 percent of their incomes, he said. As the state’s immigrant population becomes more entrenched, those financial transactions home will decrease, he said.

“Long term, it won’t be a major drain on this side,” Woodward said.

Nationally, 12.6 million Latin American immigrants will send home about $45 billion in 2006. The money sent to Latin America from the United States exceeds the amount of all other foreign aid and investments in the region, said Donald Terry, a manager at the development bank that conducted the national study.

Overall, Latin American immigrants send home about 10 percent of their total earnings, Terry said.

Terry described the flow of money as a simple economic reality: Latin America needs jobs and the U.S. economy needs workers.

Terry doesn’t see the transactions as financial drains because immigrants still spend the bulk of their incomes where they live.

“These people are working and contributing to the local economy as well as the economy back home,” he said.

As for Naranjo, her move to the United States 12 years ago was an academic one. Her mother could no longer afford tuition, so Naranjo moved to the United States to live with an older sister and finish high school.

“We don’t have public schools in Ecuador like you have here. She couldn’t pay for school plus food, uniforms and shoes.”

Naranjo hasn’t seen her mother since she left for the United States and still gets homesick. She said plane tickets are too expensive, especially when she’s sending so much to Ecuador.

“I’m the youngest of six siblings. It makes me feel good to help.”

Reach Phillips at (803) 771-8307.