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Transnationalism: El Salvador – Los Angeles
UCLA June 5, 2010
Introduction • L.A/CA – U.S. & E.S. Economy
Where are the Salvadorians?
• Vicious Cycle - Current Situation
Banking the UnbankedExploitation Enforcement Policies
• Policies Implication - Scenarios
Legalization VS Deportation Empowering the Diasporas via New
Technologies
El Salvador foreign born population in the US
Salvadoran Immigrants in Los Angeles
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UCLA
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Downtown Los Angeles
United States California Los Angeles El SalvadorSalvadorians in U.S.
Salvadorians in
California
Salvadorians in Los
Angeles
Population (m) 307.374 37 9.86 7.2 2.5 1.4 1.0
GDP(bn) 14,256.275 1,847 339 22.3 72.5 44.94 32.0
GDP per capita (us) 46,380.912 38,956 48,610 3,547 29,567 32,050 32,050
Remittances (m) 4.6 2.6 2.0
Comparison of the United States, California,
Los Angeles and El Salvador According to GDP and Population
Sources: U.S. Department of State (2007-2009), International Monetary Fund (2009), Econpost.com (2008), bea.gov (2006), U.S. Census Bureau, Population Division (2008), citymayors.com/statistics (2008). Hinojosa, Empowering Globalization from below: New Technologies, Remittances and Micro-Finance, March 25, 2009
Population GDP (VA) GDP/ per capita
Remittances
El Salvador 7.2 m 22.3 bn 3,547 us + 2.83 bn
ROW Salvadorians
3.3 86.13 26,100 35
U.S. Salvadorians
2.5 72.5 29,567 15
California Salvadorians
1.4 44.94 32050 10
Source: IMF, WB, El Salvador Ministry of Foreign Relations. Data estimated for year 2005
Comparison of the El Salvador, Global, United States, and California According to
Population, GDP and Remittances
Dutch Disease
Increase poverty for Migrant’s family in
the US and In El
Salvador
Lack of financial
institutions and
legalization for
immigrants
The Vicious Cycle
Banking the Unbanked
Background: The Unbanked Population
Hinojosa-Ojeda, Raul. “Reforming Financial Services for the Under-banked: Moving from a High-Cost/Cash-Based Limited Services Model to Low-Cost/Electronic Payments Multi-Service Empowerment” (UCLA: North American Integration and Development Center).
Identifying the Problem
-
Too many Americans lack the resources to build a stable foundation for financial success, where three-fourths of the unbanked are Latinos.
Pastor, Manuel. “Banking on LA” (University of Southern California) March 2009.
“It's expensive to be poor”
The unbanked resort to high cost financial alternatives, such as:
-pawnshops-payday lenders: charge 25-30 times the
average rate of credit cards-check cashing outlets: a regular user
loses $1,000/year from their salaryPastor, Manuel. “Banking on LA” (University of Southern California) March 2009.
The exploitation of immigrants in the work force.
•Undocumented workers are facing- Low wages- Harsh working conditions- Negative living conditions
• Income. The median annual personal earnings for Salvadorans ages 16 and older were $20,368 in 2008
•15.4% of Salvadorans in America live in Poverty.( From: Hispanics of Salvadoran Origin in the United States, 2008 )
• High financial service fees cause- A strain on the family sending remittance- A dependency on remittance for the
Salvadorian side.
• The lack of banking for Salvadorians in both America and El Salvador has caused - The poor to get poorer- A dependency on high cost financial services.
The Exploitation of immigrants – Financial Services
Temporary Protected Status (TPS)
• Salvadoran migration to U.S. mainly began during their civil war from 1979-1992.
• Salvadoran Population seen as “illegal” immigrants that needed work not refugees.
• Salvadorans who were granted “TPS” were allowed to stay temporarily to work legally.
• Reasons for the grant of TPS: 1990 Immigration Act (1st nationality granted TPS, TPS members can apply for DED (Deferred Enforced Departure) similar to TPS.
• 2nd reason: American Baptist Church (ABC) class action suit against Attorney General Thornburgh.
Gammage, Sarah. “Exporting People and Recruiting Remittances: A Development Strategy for El Salvador?.” Sage Publication, Inc. Latin American Perspectives, Vol. 33, No, 6 Migration, the Global Economy, and Latin American Cities (Nov. 2006), pp. 75-100. 26 Feb 2010.Bailey, J. Adrian, Wright, A. Richard, Mountz Alison, Miyares, M. Ines. “(Re)producing Salvadoran Transnational Geographies.” Taylor & Francis, Ltd.: Association of American Geographers. Annals of the Association of American Geographers, Vol 92, No. 1 (Mar. 2002), pp. 125-144. 26 Feb 2010.
ENFORCEMENT-ONLY POLICY
Today U.S. also enforces the “Enforcement-Only Policy,” but it failed it not only raised the “wage floor for U.S. economy, is also costly i.e. border patrol expenditures and still immigrant population of the United States has roughly tripled in size over the past two decades, from an estimated 3.5 million in 1990 to 11.9 million in 2008.
Figure 5: Unauthorized Immigrants in the United States,1990, 2000 & 2008
11.9
8.5
3.5
0
1
2
3
4
5
6
7
8
9
10
11
12
13
1990 2000 2008
Mil
lion
s
Source: Estimates by the Pew Hispanic Center; Office of Immigration Statistics (U.S. Department of Homeland Security); U.S. Immigration & Naturalization Service.
Hinojosa-Ojeda, Raul. “Raising the Floor for American Workers: The Economic Benefits of Comprehensive Reform.” January 2010.
El Salvadoran Contributions to the U.S.
Salvadorans are transnational's: ferrying goods, serving as couriers of money, and making purchases and investments that span national borders, even Salvadoran government reach out to U.S. Salvadoran communities through embassies and consular services to stimulate interests in investments.Remittances – Household survey data revealed that more than 20% of households in El Salvador have at least one family member overseas; In 2004, remittances to Latin America reached a little over $40 Billion U.S.2001 El Salvador was granted Dollarization of money : the International Monetary Fund and the World Bank helped.
Gammage, Sarah. “Exporting People and Recruiting Remittances: A Development Strategy for El Salvador?.” Sage Publication, Inc. Latin American Perspectives, Vol. 33, No, 6 Migration, the Global Economy, and Latin American Cities (Nov. 2006), pp. 75-100. 26 Feb 2010.
Immigration Reform Vs. Deportation
•Legalizing the nation’s unauthorized workers
Benefits:• Raise Wages
• Create Jobs
• Generate Additional Tax Revenue
• Transfers Vast Wealth
• Opportunity for Economic Development
Comprehensive Immigration Reform:
More Benefits:
• Increase in U.S. Gross Domestic Product .84%
•A cumulative $1.5 trillion in additional GDP.
•Help meet U.S. labor market needs◦24.7 million jobs ◦85% of the gap in the labor force.
-(U.S. Bureau of Labor Statistics, 2002)
Huge economic boom does result from legalization
Wages grew by 20%
Spending on their own education rose by 200%
“Sweat Shops”
Undocumented crossings
•Reduces U.S. GDP by 1.46 percent
•Deport over 4 million immigrant workers and their dependents
• ≙ cost to deport = between $206 billion and $230 billion over five years.
Mass Deportation
Legalization Can help lay the foundation for robust, just,
and widespread economic growth.
Virtuous Cycle
Micro- Credits
Global Capital Markets
E- Mobile Transfers
Receiving Remittance
s
Productive Investment
s
Growth
Global income
Widening Middle
Shrinking Bottom
Widening Middle
Questions
THANK YOU