Money flows across border

Scott Tong Feb 7, 2012

David Brancaccio: Western Union is a 19th-century brand that’s still kicking. Telegrams are no longer big business, but sending money back to foreign relatives is.

With Western Union revealing its profits later today, Marketplace’s Scott Tong has the story.

Scott Tong: The world economy’s limping, but remittances from migrant workers to their families back home are charging ahead. They grew 8 percent last year, to $351 billion, according to the World Bank. That’s an all-time high, following a soft patch in 2009.

To put it all in context, remittances triple the amount sent from governments to other governments via foreign aid. Why the resilience? The World Bank’s Dilip Ratha says when times get tough, migrants find a way to suck it up.

Dilip Ratha: They consume a bit less, or they share accommodation with others. And then they send the savings back home. Because every dollar that you send from here can mean so much more in a place like Bangladesh or in Mexico.

Another reason: the dollar is still strong in places like Mexico and India. And if a dollar goes a long way, migrants here send lots of them home. The U.S. is the world’s largest remittance source: outflows from America last year grew by 8 percent.

In Washington, I’m Scott Tong for Marketplace.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.