One objection of some critics of immigration is that immigrants, both legal and illegal, send substantial amounts of money back to relatives and friends in their country of origin. These monies sent are called “remittances.” Their main objection is that the money is lost to the U.S. economy where it could have been used to buy goods and services from Americans.
That objection does not hold water.
But before getting to what’s wrong with that objection, it’s important to note what’s so right about immigrant remittances. They are a large, voluntary, and effective form of foreign aid.
These are the first 3 paragraphs of my latest article for the Hoover Institution’s Defining Ideas. The article is titled “Immigrant Remittances are Private Foreign Aid,” June 26, 2019.
I lay out what’s so great about them and then address an objection of 3 authors at the Federation for American Immigration Reform site:
You might think that all these characteristics of private foreign aid—they are large, voluntary, and effective—would be seen by everyone as virtues. But some members of the anti-immigration lobby see an apparent cloud that goes with the silver lining. Exhibit A is a short study published in May by the Federation of American Immigration Reform (FAIR), titled The United States Loses $150 Billion Annually in Remittances. (The whole study has suddenly been made unavailable to the public; a friend managed to pull down the full study before FAIR put it off limits.) The authors, Matthew O’Brien, Spencer Raley, and Casey Ryan, find a number of faults with remittances. In a short section titled “Why Should You Be Concerned About Remittances?” they answer that question.
I end with this:
I’m an American who became a naturalized citizen after growing up in Canada, eh? When my sister was alive, I sent her checks for Christmas and for her birthday. I’m incensed that a fellow American would advocate taxing me for doing so. We Americans should hold on to our freedom—and that of our fellow residents—to give our money to fellow Americans or to foreigners.
Note to fellow Canucks: In the second sentence, that should be “cheques.” 🙂
Read the whole thing.
READER COMMENTS
Floccina
Jun 26 2019 at 2:56pm
When people talk about charity, often they say it’s to small to be significant but, they tend to ignore people being charitable to family and friends.
john hare
Jun 26 2019 at 5:49pm
The argument against remittances would apply equally well to my signing paychecks every Friday. Those employees hardly ever spend money on my companies product. so why should I give them money. Earned money should be under the control of the one that earned it, not the ones trying to score debate points at the expense of others.
Matthias Görgens
Jun 29 2019 at 8:02am
It seems to be really hard for people to understand that with a modern central bank that has clear nominal targets, no change in real behaviour will have nominal effects.
So even if those pesky foreigners burn the cash we send them, that won’t lead to shortage of money. (In practice, of course, those foreigners spend the money eventually, so the central bank doesn’t need to print extra money one-for-one in line with remittances.)
In a real sense, the sending country does lose out on real resources they could have consumed. But I don’t see how anyone can criticze a local for spending real resources on people in Canada vs eg going to the cinema.
BC
Jun 29 2019 at 1:32pm
So, according to immigration opponents, one downside of immigration is that immigrants use some of their income to take care of their families and many of those family members live in foreign countries? Sounds like an (unintentional) argument in favor of chain migration!
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