Please send money

Immigrants in Las Vegas send home estimated $447 million per year

By Larry Wills

The influx of Latin American immigrants to Las Vegas is putting a new wrinkle on the local economy. Nearly a third of them aren't spending all their money here, but are sending cash back home.

Donald Terry, an officer with the InterAmerican Development Bank in Washington, D.C., estimates that of the 400,000 Latinos living in Las Vegas, about 160,000 of them are sending checks to families in Mexico or Central America, to the tune of $447 million a year. That may explain the proliferation of cash transfer services in Las Vegas, from cash machines to local banks.

But he cautions that the money leaving the city is just a drop in the bucket compared with the total economic output. "There's no effect on the U.S. economy," he says. Terry says that nationally the outflow of cash amounts to $30 billion a year, as 10 million workers try to raise their families' standards of living. They still spend about $450 billion a year on living expenses, boosting the $1.5 trillion U.S. economy. "That would be less than 0.03 percent of the U.S. economy," Terry says of the cash outflow.

But it's a big boost to economies south of the border. "For the 20 million households in Latin America, it amounts to 50 to 80 percent of the household income," Terry says. "We're talking about remittances of about $3,000 a year. That's the difference between destitute poverty and a better life. It's important for those families."

Terry based his figures on a survey of 3,800 people in 37 states and the District of Columbia conducted by the bank whose shareholders are European, Asian and American countries, operating much like the World Bank. The study showed 85 percent of workers are from Mexico and 15 percent are from Central America.

And he insists the benefits from immigrant labor far outweigh the loss of dollars. "They make a contribution to the U.S. economy and without them, the place essentially collapses," he says. And two-thirds of those interviewed were living legally in the United States.

Most of the money isn't being sent by newcomers. "Of those who send money, more than half have been here more than 10 years," Terry says. Forty-five percent of that group transmits funds south. Those who have been in the country a year or less send the least, while the figures jump among those living here from one to 10 years. The key lies in how much the workers earn, but even that's not much compared to skilled jobs in Southern Nevada.

"Most who are making about 50 percent less than $20,000 are sending money home," he says. If so, workers earning slightly more than $5 an hour live frugally enough to set aside money for their families. That money provides relatives with homes, schools and health care in areas where the costs are beyond most people.

Workers may be loyal to their families, but Terry sees little inclination for them to eventually return home. Instead, economic disparities will keep luring Latin Americans across the border.

"So long as there are substantial wage differentials between the United States and Central America, people are going to come," Terry says. He also sees a growing acceptance of Hispanics in the labor force as less of a threat to jobs. "It's not an issue now. Unions are trying to recruit these people."

He said 40 percent of the work force repairing the Sept. 11 damage to the Pentagon was Hispanic. "They were 100 percent in the country legally."

But in Nevada, the cash-flow figures seem higher than elsewhere, where the state economy is estimated at about $70 billion and nearly 1 percent of that is leaving town. The average being sent from Nevada is $245 a month.

The survey also didn't measure the workers paid under the table, bypassing income taxes. "It's an underground economy," says Bob Potts, a researcher at UNLV's Center for Business and Economic Research. "We have no idea how much it is." However, he suspects it may be three times the national average. But even that amount may not have an effect on Southern Nevada's economy. "With only 1 percent, there's essentially no impact," he says.

Ted Wehking executive director of the Nevada Banking Association, agrees. "We have not had any negative feedback. No one's getting too excited about it."

Some see the overall effect as positive for Las Vegas and poverty-stricken families in Central America. "I think it's great that we're able to help families," says Eloiza Martinez, president of the Latin Chamber of Commerce. "They pay their taxes. The majority of the money is spent here. We're winning in both situations."

She says Wells Fargo was one of the first to provide the cash transfer service, which allows up to $3,000 in daily transactions for $10. "It's a great opportunity and it's helping the community." Western Union, private transfer machine vendors and other banks also offer transfers.

But Potts wonders about the economic impact if the cash outflow increases. He says Southern Nevada's growth has been boosted by the influx of retirees, bringing with them cash to invigorate the economy. The export of wealth to Central America could offset that.

"In essence it's a tax. If it's 5 percent of the total income, then you've got an issue," he says. "But it would be a hardship on that population to get to that percentage." Potts estimates the Nevada cash outflow to be 0.62 percent, or 20 times the national estimate. "That's not going to hurt us."

He sees similarities with poverty-stricken Americans during the Depression when fathers left home to take jobs elsewhere to support their families. It's like the Grapes of Wrath, he says, "where you'll do anything to bring food to the table."