The value of the U.S. dollar has dropped about 20 percent against a basket of major currencies in the last five years. This decline has been especially tough for immigrants who work in the United States and send money to their families back home. As Nathan King reports from New York, these dollar remittances are key for the economies in many developing nations.
Eric Amaoako says he is working harder to send money home to his wife and his parents in Ghana
No weekends off and as much overtime as he can get. Eric Amaoako lives and works in New York, but has four children, a wife and his parents relying on the $200 he sends back home each month to Ghana.
In previous years, life hasn’t been this hard for Amaoako. But because of the continued depreciation of the U.S. dollar, the money he sends home has less purchasing power so he has had to work harder and longer to send more.
“I have to work double shifts, weekends, when I am supposed to take off. I have to work because I need more money now [that] the dollar is falling. I need more money to meet my commitments,” Amaoako said.
Eric is not alone. With the dollar at record lows against many major currencies, millions of people are having to send home dollars that are worth less or work harder to send more money.
That can have a big effect on poorer countries. The World Bank estimates remittances to developing countries totaled $240 billion this past year. The Bank says some countries rely on remittances for up to half their national income.
Dilip Ratha is the World Bank’s Chief Economist on Remittances. He says the dollar’s fall already is leading to calls for wage increases from migrant workers. “They are saying, ‘Look we came here only to be able to send money and support our families so please give us wage increases,’ and that has led to some discontent for some migrant workers.”
Ratha believes that over time this situation may turn the pattern of migration away from the United States. “This is obvious—migrants are looking for greener pastures. A stronger currency helps, [so] they are going to go for countries where the currency is stronger and buy more for their families back home.”
But for those, like Eric Amaoako, who are already here in the United States with a job, each dollar earned and sent home has less value than before.