Cost of remittances: too high

Global remittances are a $600B a year business. (The term is commonly used for personal, fairly low amount, person to person transfers.) Remittances from the U.S. to other countries costs way too much.

“Fintech” (technology transformation of finance) is bringing in new players to the remittance field, such as Linxo and other firms. But I see to evidence that they are making a big impact on remittances at this time.

According to World Bank estimates, $69B were remitted from the U.S. in 2020. At the average global cost of remittances (about 6.5%) the charges would be  $4.5 billion; at the typical costs of lowest costs remittance firms (3%) it would come to $2 billion. A cryptocurrency transfer would cost about zero (but entail current volatility). These comparisons don’t take into account days or hours of transfer time.

The global average remittance price (i.e., average based on all countries for which price data is available) declined was 8.96% in 2012. By 2020, the global average remittance charge was 6.56%; the weighted average (adjusted for volume) was 4.82%. Bank transfers were the most expensive at 10.73%. The UN wants these charges to go down to 3%.

One of the leading services for personal transfers between countries is Remitly. (Monito says it will let you compare charges, but I don’t see how it does this.) Remitly will get money into a bank account within two to three working days.

Say you want to transfer money vis Remitly from the U.S. to Ecuador. The company’s website says that an “express” transfer of $400 will cost $8.99, or 3%. This is about the average — for non-bank managed transfers. However, the World Bank asserts that the prevailing rates are much higher – though per the World Bank they have declined by about one third over the past 5 – 8 years, and overall cost 6% .


Republican Immigration proposal of February 2022

Some Republican House members, led by Freshman Maria Elvira Salazar, filed on February 8 a Dignity Act bill for immigration reform. The bill is summarized here and here. The bill highlight a labyrinthian process of normalization of unauthorized persons which includes levies on most, a kind of reparations, admitting to having committed a felony. Legalization can be held up if a political committee decides that more than 10% of persons crossing the Mexican border escape apprehension (apparently ignoring visa overstays).

Salazar was one of nine House Republicans who voted in March 2021 for the Democratic-created The American Dream and Promise Act. Democratic legislative proposals for immigration reform in 2021 included Biden’s Citizenship Act of 2021, the Farmworker Modernization Act, the Citizenship for Essential Workers Act, and the Dream Act of 2021 (go here for them all).

To add to the confusion, Salazar was a co-sponsor of a Republican reform bill in early 2021 which was also called the Dignity Act. 

The last congressional reform bill which had bipartisan co-sponsorship was likely one introduced in 2018 (go here).

And, the 2020 Republican Party platform ignored any serious effort to normalize legal status and focused on the border wall and draconian measures.

Russian aggression = ethnic wars = refugees

The Russian incursion into Ukraine and Putin’s irredentism harken back to ethnic-based hostilities which lead to refugee flight. A large share of refugee movements in the past 100 years have as their origin the breakdown of empires – imperial, Russian, Austro-Hungarian, Ottoman.

The Permanent Representative of Kenya to the United Nations, Martin Kimani, at the U.N. Security Council, February 21, 2022 explains how people across Africa understand Ukraine, and what the Kremlin’s acts of aggression mean in our post-colonial world.

Kenya and almost every African country were birthed by the ending of empire. Our borders were not of our own drawing. They were drawn in the distant metropolises of London, Paris and Lisbon with no regard for the ancient nations.

Today across the border of every single African country live our countrymen with whom we share deep historical, cultural and linguistic bonds. Had we after independence chosen to pursue states on the basis of ethnic racial or religious homogeneity, we would still be waging bloody wars these many decades later. Instead, we agreed that we would settle with the borders that we inherited. We looked to economic and legal integration rather than to nations which look backward into history with a dangerous nostalgia. We chose to look forward to a greatness, to follow the rules of the Organization of African Unity and the United Nations charter, not because our border satisfied us but because we wanted something greater forged in peace.

We believe that all states formed from empires that have collapsed or retreated have many people in them yearning for integration with peoples in neighboring states. This is normal and understandable. After all, who does not want to be joined to the common purpose with them?

However, Kenya rejects such a yearning from being pursued by force. We must complete our recovery from the embers of dead empires in a way that does not plunge us back into new forms of domination and oppression. We rejected irredentism and expansionism on any basis including racial or cultural factors. We reject it today.

The Special Immigrant Visa crisis explained

The New York Times ran this column on February 16 about the perils of Afghans due to failures in the SIV program.

What is a Special Immigrant Visa?

The “special immigrant” category was first instituted in 1965 as an amendment (and later amended) to the Immigration and Nationality Act (INA) of 1952, includes many classifications, including the following: An immigrant employed by the U.S. government overseas who “performed faithful service” for 15 years and those whose lives have been put in danger as a result of their employment with the U.S. government or its affiliates. Each need for an SIV involves a special act to approve more visas,

Here is a summary of the SIV programs specifically created for Iraqi and Afghan conflicts. Note that the size of these programs were initially set in the low 1,000s. By the end of 2019, some 18,000 visas were issued. An August 23, 2021 WSJ article includes an estimate that some 100,000 persons (including dependents) might be eligible. Last year, I showed here that past evacuations in similar circumstances indicated a 100,000 level effort.

Problems in the Iraq and Afghan SIV programs were well documented. Here is an Inspector General’s report dated June 2020.

This month (February 2022) Republican members of the Senate Foreign Relations Committee criticized the evacuation. Focusing on the SIV program the report said that the administration failed to correct well known problems in the SIV program including how employment was verified. The State Dept and Defense Dept did not have a proactive system for tracking employment.

There is no SIV program in place for Syrian and Kurdish helpers in the Syrian conflict.

Private Latino wealth in the US

From a McKinsey study of Latinos in America:Latino wealth has grown by an average of around 7 percent annually for the past 20 years, more than twice the rate of non-Latino White wealth. Wealth is also increasing by generation, especially from the first generation to the second.

Yet — the median wealth of Latino households in 2019 was about $36,000, just one-fifth of the median $188,200 held by their White peers. Latino families are also significantly more likely to have a zero or negative net worth.  Only around 3 percent of Latino families are worth more than $1 million, compared with 16 percent of White households.

Go here for much more information about Hispanic wealth. From here —

Home as financial asset: In 2019, the homeownership rate for Latino Americans was 47.5%, much lower than the national homeownership rate of 64.9% and much lower than the non-Hispanic White American homeownership rate of 73.4%. Latino homeownership fluctuated between 45% and 49% between 2000 and 2020. However, Latinos have accounted for over 50% of US homeownership growth in the past 10 years. Nearly one in three Latinos is within the “prime homebuying years” of 25 – 44, meaning this age group will likely drive the projected Latino homeownership growth over the next 20 years.

Worker shortages: 2 million immigrant worker gap

The Economist reports: For new truck drivers in Portland, Oregon, a $30,000 signing bonus. An end to automatic daily housekeeping at most Hilton and Marriott hotels. Offers by Amazon and Walmart to cover college tuition for their employees. America has about 3 million fewer workers now than on the eve of the pandemic, a 2% contraction in the labor force.  Retirement has greatly expanded due in part to higher private wealth and workforce immigration was shut down due to COVID and Trump policies.

The outflow of retirees has grown by over two times:

Per Pew, Between 2008 and 2019, the retired population ages 55 and older grew by about 1 million retirees per year. In the past two years, the ranks of retirees 55 and older have grown by 3.5 million. The WSJ shows cases involving higher home and stock market valuations.

Foreign-born workforce stopped growing:

Researchers at UC/Davis (Peri and Zalour) report: Prior to 2019, the foreign born population of working age (18 to 65) grew by about 660,000 people per year. This trend came to a stop already in 2019 before the pandemic, due to a combination of stricter immigration enforcement and a drop in the inflow of Mexican immigrants. The halt to international travel in 2020 added a significant drop in the working-age immigrant population. As of the end of 2021, the number of working-age foreign-born people in the United States is still somewhat smaller than it was in early 2019. and, relative to the level it would have achieved if the 2010-2019 trend had continued, there is a shortfall of about 2 million people.

A similar calculation done using Current Population Survey (CPS) monthly data on foreign-born individuals with a college degree indicates that of the missing two million foreign workers, about 950,000 would have been college educated, had the pre-2020 trend continued. This is a very substantial loss of skilled workers, equal to 1.8 percent of all college-educated individuals working in the US in 2019.


Rising contribution of foreign born in our labor force

In 1960 our total national labor force was 61 million; in 2020 (just before the pandemic) 165 million, or 2.7 times. The foreign born labor force grew from 6 to 28 million, or 4.6 times. In this current decade half of the labor force increase (which is about 660,000 annually, removing out the wild fluctuaitons due to the pandemic) will be from increase in foreign born workers. The biggest factors in the changing ratios since 1960 has been the failure to replace the surge boomer workers with another surge of native born workers, and the fairly steady increase in foreign born workers (excepting a surge end of 20th C due to Latino unauthorized workers, which ended with the financial crisis). 

These charts show how the total labor force of the U.S. since 1960 grew, on an annual rate of total numbers, compared with the foreign-born worker segment.

Not revealed in these charts is the increase in formal education of new immigrants. This sharply increased in the 2010s, for reasons I explain here.

These graphs slightly under-estimate the role of foreign born labor, since I used a smaller share of total foreign born persons who are in the labor force (62%) than I could have used (65.6%) because the labor force participation rates have changed a lot over time (here and here).

The data is from here, here, here and here.

More on the soaring immigration court backlog

From the Transactional Records Access Clearinghouse ( TRAC ) at Syracuse University, which closely monitors immigration and border flows, immigration court activity, and other aspects of immigration. The following comes from a study of immigration courts along the Mexican border.

At the start of the Bush administration the backlog stood at just 149,338. The backlog had continued to grow under President Obama. And it only accelerated under President Trump. But in late 2021, the backlog about 1.6 million, having grown in every year.

In 2009, asylum cases took 15 months to be heard. Today, it takes 58 months,

Although the recent surge in the Immigration Court backlog is alarming, it is not as if Congress or the federal government has been in kept in the dark about this problem. Since at least 2008, TRAC has published regular reports and alerts about the growing backlog.

In May 2009 a TRAC study reported on how judges were poorly resourced (for instance, in clerks). Three presidential administrations has failed to correct the situation.

I posted on this problem in December.

“Biden betrayal of Afghan will live in infamy”

This is the title of George Packer’s March 2022 Atlantic article about how Biden abandoned the Afghans who supported the United States during “the endless war.”

I have posted about how the United States has admitted 5% of the internationally displaced persons driven out of their counties due to post 9/11 anti-terrorist American wars. I also posted about a number of evacuations to the U.S. arising from our wars.

Packer’s 20,000-word article focuses on the indifference of the White House to the effects of the impending withdrawal of American troops.

The article is replete with desperate actions by individuals and groups of Americans to rescue their allies. For example, the Iraqi (later International) Refugee Assistance Project (IRAP) founded in 2008, the leading legal-assistance group for Special Immigration Visa applicants. Packer also narrates the harrowing lives of a handful of Afghans seeking to get out of the country in the last days of August, 2021.

Here are a few excerpts:

[In the face of appeals by congressmen and private citizens] the administration countered every urgent proposal with objections so unconvincing that they suggested a deeper, unexpressed resistance [fear of association with the fall of Saigon.]

Human Rights First estimates that 90 percent of SIVs—including some with visas in hand—were left behind with their families. The number of Afghans who remain in danger because of their association with the 20-year American presence in their country must be counted in the hundreds of thousands.

SIV applicants and their families numbered about 80,000 people. But after 20 years, far more Afghans than these had put themselves in danger by joining the American project in their country: rights activists, humanitarian workers, journalists, judges, students and teachers at American-backed universities, special-forces commandos. A full accounting would reach the hundreds of thousands. Many of them were women, and most were under 40—the generation of Afghans who came of age in the time of the Americans.

Some[rescue] groups—West Point alums, retired Special Forces operators, women’s-rights advocates—grew to several hundred and acquired names like Task Force Dunkirk and Task Force Pineapple. They spanned time zones and continents. Other groups consisted of three or four friends working their contacts.

Mike Breen, of Human Rights First, told me that the administration “took the life-and-death decisions that should have been at the highest level of the government and sent them down to the lowest level, which is a pretty good metaphor for the whole war. It ended as it was fought. Same old story.”

Many of the troops quickly realized that escorting a newly orphaned child onto a plane to a new life would be the most important mission of their lives. “This is going to be our legacy,” the paratrooper said, “whether we do two years in the Army, or 20 years, or 40 years.” Representative Tom Malinowski put it this way: “This was a situation where knowing the secretary of state and the national security adviser personally was vastly less valuable than knowing a Marine major on the airfield.”

On July 8, Biden had claimed that “fewer than half” of SIV holders had chosen to leave. This became a persistent talking point, and a false one: Almost all of the remaining Afghans with visas were in official limbo, waiting for the United Nations to put them on flights to the U.S., or for family members to receive passports and visas. The president, echoed by his officials, was trying to blame the Afghans for their own entrapment.

While waiting for Kabul to fall, the administration could have timed the military withdrawal to support evacuations, rather than pulling out all the hard assets while leaving all the soft targets behind. It could have created an interagency task force, vested with presidential authority and led by an evacuations czar—the only way to force different agencies to coordinate resources in order to solve a problem that is limited in scope but highly complex. It could have assembled comprehensive lists of thousands of names, locations, email addresses, and phone numbers—not just for interpreters like Khan, but for others at risk, including women like Hawa. It could have begun to quietly organize flights on commercial aircraft in the spring—moving 1,000 people a week—and gradually increased the numbers. It could have used the prospect of lifting sanctions and giving international recognition to a future Taliban government as leverage, demanding secure airfields and safe passage for Afghans whom the Americans wanted to bring out with them. It could have used airfields in Herāt, Mazar-i-Sharif, Jalalabad, and Kandahar while those cities remained out of Taliban control. It could have drawn up emergency plans for Afghan evacuations and rehearsed them in interagency drills. It could have included NATO allies in the planning. It could have shown imagination and initiative. But the administration did none of these.

On April 14, 1975, as North Vietnamese divisions raced toward Saigon, the 32-year-old first-term senator from Delaware was summoned to the White House. President Gerald Ford pleaded with him and other senators for funding to evacuate Vietnamese allies. Biden refused. “I feel put-upon,” he said. He would vote for money to bring out the remaining Americans, but not one dollar for the locals. On April 23, as South Vietnam’s collapse accelerated, Biden repeated the point on the Senate floor. “I do not believe the United States has an obligation, moral or otherwise, to evacuate foreign nationals” other than diplomats, he said. That was the job of private organizations. “The United States has no obligation to evacuate one, or 100,001, South Vietnamese.”

Governor Abbot’s border ploy

Deployment of Texas state forces to the Mexican border has, even by public statements of the state, resulted in very little. “Gov. Greg Abbott’s Operation Lone Star to arrest Immigrants at the Texas border Is actually helping some asylum-seekers stay In the country” (here). With the estimated cost of personnel deployment at $2 billion, it is hard to see the merit in the arrest of only some 10,000 persons, virtually all for minor infractions of trespass, and the apparently referral of tens of thousands of persons to what may be ayslum applications.

In March, 2021 Texas governor Greg Abbott launched Operation Lone Star, an initiative to deploy public safety personnel to the Mexican border

On June 1, 2021, Governor Abbott issued a disaster declaration along Texas’ southern border. “The Governor is authorizing the use of all necessary and available state and local resources to protect landowners in these counties from trespassers and the damage they cause to private property. ‘President Biden’s open-border policies have paved the way for dangerous gangs and cartels, human traffickers, and deadly drugs like fentanyl to pour into our communities,’ said Governor Abbott. Meanwhile, landowners along the border are seeing their property damaged and vandalized.”

Because states cannot enforce immigration laws, Texas authorities are left to arresting persons for innocently trespassing on private property and handing the vast majority of persons over to the Feds, leading to asylum applications.

In October 2021, one news media outlet reported 7,000 arrests, another 32,000 arrests. The grounds of arrests were usually trespassing on private property without intent or damage to the property – not serious criminal acts such as smuggling or trafficking.

“At the end of the day, my office is not enforcing immigration laws. They’re being charged with trespass,” the Val Verde County attorney said. “What I can tell you is this, as I’ve considered every aspect in those cases we have dismissed, I’m pretty confident those individuals didn’t break anybody’s fence, didn’t cause destruction, didn’t linger, didn’t harass anybody in their home. They’re simply crossing what to them looks like open rural land.” (from here.)

A February 2 article said that the Department of Public Safety said that it made 10,400 criminal arrests, including 2,572 arrests for criminal trespassing, and turned some 100,000 persons over to the CBP (Customs and Border Protection). I can’t find information as to how many so turned over applied for asylum, nor those convicted. (also here.)

The National Guard deployment is expected to cost $2 billion, with about 6,500 troops plus Dept of Public Safety personnel at the border.