Legal and illegal immigrants in the U.S. are sending more of their money back to their native countries. According to the latest World Bank report, total remittances from the U.S. back to Mexico and Central America amounted to $53.4 billion in 2018. Remittances to Mexico alone jumped 21 percent from a record level in 2017, while the amount of money sent back to Central America has increased 25 percent in just the past two years.
The numbers contradict a common argument from immigration advocates that immigrants are a boost to the economy. "People aren't importing American goods with this money that is sent back to Central America or Mexico or elsewhere, so it really is a loss to the American economy," says Mark Krikorian, director of the Center for Immigration Studies. He tells KTRH that most of the remittance money goes to relatives or to pay debts back home. "That's not a benefit to the United States, and it's not a benefit to the poor and working-class communities that immigrants are generally in," says Krikorian.
While their communities are losing out on that remittance money, American taxpayers are also subsidizing much of it. "The fact is that a significant proportion of people who send remittances home also get U.S. taxpayer-funded benefits--welfare," says Krikorian. "Frankly, if you can afford to send remittances you shouldn't be getting any welfare, but that's not the way the system works now."
With President Trump in a budget standoff with Democrats over funding for a border wall, these billions in remittances could be a possible solution. "It would be a way of generating revenue for border security to tax remittances," says Krikorian. "Because a lot of these remittances aren't taxed at all."