Hispanic Community Struggles to Maintain Financial Support Abroad


Felix Medrano stepped into the Western Union office, filled out a money transfer form and handed a fraction of his monthly earnings to a cashier behind a smudgy window.

The second day is more cheap, Medrano said, as he dropped the envelope under the tiny hole in the glass.

Medrano, a construction worker living in the Route 1 corridor of Alexandria, is among one of the millions of Latinos in the United States who send money back to their home countries. Virginias Hispanics still send an estimated $1.1. billion, but the amount of remittances in the U.S. has decreased dramatically since the 1990s and the dwindling economy only makes matters worse.

According to the 2006 study by the Inter-American Development Bank and the Multilateral Investment Fund, the amount of statewide remittances has jumped 89 percent since 2004, and because of these remittances, their contribution to the local economy adds up to more than $11 billion.

Latinos use various money transfer methods, including banks, credit unions and, most commonly, wire transfer firms, such as Western Union. According to the study, this particular method has not promoted economic stability for Latinos in the United States. Though the cost of transferring money has decreased dramatically over the years, distrust and lack of the financial system remain.

Despite this, the process of sending money home can combats poverty and economic hardship in Central and South American countries.

There were a lot of problems in my country. La guerra (the war), Medrano said, detailing one of his primary reasons for leaving El Salvador in 1986. They wanted me to fight, and I didnt want to.

His other reason for immigrating to America: money. Medrano was a farmer in El Salvador, a modest job that he says did not pay very well. Now, more than twenty years later, the struggle to survive in one country while supporting the family he left behind is just as difficult.

While Medrano used to send at least $300 every two to three months in the 1990s, he now sends $100 a month back home. Medranos consistency is the norm for the region, as the study indicted that Virginia was one of the top five states in which Hispanic immigrants regularly send money to family back home.

Nevertheless, the downturn of the economy has prevented the realization of an American dream. According to a newer study by the Inter-American Development Bank, the national Hispanic rate of remittances dropped from 73 percent in 2006 to 50 percent to 2008. Additionally, the U.S. unemployment rate among Hispanics rose from 5.5 percent in 2007 to 6.9 percent in 2008.

Jose Gonzalez attributes the downturn to a combination of factors.

In our community, they [Hispanics] struggle, Gonzalez said. They barely have enough to take care of themselves.

I heard stories of people working eight hours five days a week, said Gonzalez, a Community Organizer with Tenants & Workers United. Now, theyre lucky to work two or three days [a week].

In addition to a smaller number of hours, Gonzalez says that many low-income Hispanic families have trouble paying bills and cant afford basic care while here in the United States. However, money sent back home is most often used to pay for such costs.

Common uses of the remittances are food, health and utilities, respectively, and the most prevalent investment aspiration among Latinos is to own a home in their native country.

Medrano rents his home in Alexandria, but in El Salvador, he owns a home.

My family uses the money for our farm. They plant bananas and sugar canes, said Medrano, who has visited El Salvador once since immigrating to America. Im just waiting till I can go back home.