A corridor of small enterprises lines Broadway in Chelsea, yet it has also become a conduit for transferring substantial sums to destinations abroad. During 2012, Money Transfer establishments operating along Broadway moved $42.6 million out of the community.
Residents of four economically disadvantaged Massachusetts municipalities—East Boston, Revere, Chelsea, and Everett—used money transfer stores to send $247.08 million to foreign nations in 2012.
While transferring funds internationally is neither novel nor unlawful, the magnitude of capital departing the local economy raises concerns about its effects on regional commerce during economic hardship. This becomes particularly significant given that these substantial transfers originate from statistically impoverished neighborhoods.
A contrasting perspective holds that remittances—as the practice is known—provide essential support to family members remaining in developing nations who would otherwise face severe hardship. Numerous international bodies, including the World Bank, view remittances as instrumental in strengthening economies in the developing world and alleviating poverty.
SUBSTANTIAL OUTFLOWS FROM LOCAL AREAS
The Independent News Group (ING) examined state data regarding money transfers in 2012 across East Boston, Revere, Chelsea, and Everett. The state Division of Banks compiles these statistics annually, documenting each location’s address, annual transfer volumes, transaction counts, and recipient nations.
The four-community region saw $247.08 million transferred internationally, with El Salvador ($71.6 million), Brazil ($47.6 million), and Colombia ($45.45 million) receiving the largest shares.
East Boston led in both transaction frequency and total amounts transferred. The figures were distributed as follows:
•East Boston, 293,853 transactions, $112.32 million
•Everett, 142,654 transactions, $59.56 million
•Chelsea, 162,544 transactions, $52.79 million
•Revere, 63,631 transactions, $22.39 million
According to ING estimates, over $2 billion annually leaves Massachusetts communities. A 2010 Boston Globe report documented that Massachusetts residents sent $1.8 million abroad in 2009.
Superley (21 Bennington St.) and Teleonda (202 Bennington St.), both operated by Humberto Grajales, ranked among the top transfer businesses locally on Bennington Street in East Boston. These two establishments combined to transfer $25.62 million overseas, predominantly to El Salvador and Colombia.
Despite visiting both locations and leaving messages for Grajales, the paper received no response by publication. Similarly, visits to seven leading transfer businesses in the area yielded no willingness to comment or return messages regarding their operations.
All four cities share characteristics of severe economic distress, including elevated poverty rates and substantial public assistance enrollment.
Chelsea’s public school data shows 88.9 percent of students classified as low income, while Revere reports approximately 76 percent in this category.
According to the state Department of Transitional Assistance (DTA), 23,961 residents across the four communities receive public assistance: Chelsea (6,995), Revere (6,353), East Boston (5,636), and Everett (4,977).
MONEY AS AN EXPRESSION OF FAMILY BONDS
Money Transfer establishments are ubiquitous throughout the region’s municipalities, typically occupying retail spaces with supplementary services and frequently emitting floral incense aromas.
Some, like Chelsea’s Spectrum Communications, operate as simple corridors featuring gumball machines and a transfer agent positioned behind protective fiberglass.
Others, including East Boston’s Aries Communications, present more sophisticated layouts with flat-screen displays, jewelry retailers, cell phone vendors, and comfortable seating. Revere hosts large-scale check-cashing operations providing comprehensive services—check cashing, remittance transfers, and bill payment in one location. Still others, such as Everett’s Petionville Bakery & Restaurant, function primarily as dining establishments with transfer services available in a separate area.
Signage advertising ‘Envios Dinero (Send Money)’ appears throughout these businesses, displaying service charges for various destinations. Massachusetts and federal authorities currently impose no fees or taxes, though transfer operators typically charge flat rates per transaction—for example, $8 per $1,000 sent to El Salvador.
Posters from major transfer companies emphasizing emotional connections for those far from home appear in most locations, such as the prevalent MoneyGram advertisement reading, “Our feet may leave, but our hearts are always home. Send cash to mom on Mother’s Day, arriving the same day.”
Though many Money Transfer stores operate independently, the underlying wire services come from major corporations including Western Union, Continental Exchange Solutions, MoneyGram, and New Age Financial Services. While immigrants have historically sent money home, these companies have modernized the process to make it remarkably convenient, dependable, and swift. Typically, cash deposited at a local store in the morning reaches a family member’s residence in a foreign country by afternoon.
Fatou Fatty, who directs Women Encouraging Empowerment—an immigrant education and civic engagement organization in Revere—noted that remittances rarely surface in her classes, describing it as a topic that generates discomfort.
“Most don’t even talk about it because it’s very sensitive,” she explained. “Once you start talking about money, you will drive people away and we don’t want that to happen. A lot of people are sending money and mostly it’s because they have families and kids they leave behind. There are a lot of positives that come from sending money, like investing in businesses.”
Lucy Pineda, a Revere resident managing the Latinos United in Massachusetts (LUMA) office in Everett, holds a contrasting viewpoint. Having resided in the United States for 26 years, Pineda believes the extensive remittance transfers from America have negatively transformed her native El Salvador.
“My family was from the country and they worked really hard on a farm, getting up at 3 a.m. every day and working until night,” she stated. “Right now, the new population [in El Salvador] dresses better than me. They look like they don’t want to work. They are just waiting every week for our money to come to them. People say we don’t work hard in America, but people there don’t want to do anything anymore. That’s the bad part of it. I built a house there and I can’t get anyone to clean it or paint it because they don’t want to work. They just wait every month for the money to arrive.”
She further observed that American immigrants frequently sacrifice significantly to remit these funds home.
“People don’t have a better life – a better life for themselves here,” she noted, suggesting typical monthly family transfers range from $300-500. “Maybe they don’t buy furniture or take very good care of themselves because they are sending all of their money back home.”
INTERNATIONAL FINANCIAL SUPPORT SYSTEMS
International institutions like the World Bank commend remittance flows from these four communities and throughout the developed world to recipients in developing nations.
“Remittances, the money sent home by migrants, are three times the size of official development assistance and they provide an important lifeline for millions of poor households,” stated a 2012 World Bank report. “Remittances to developing countries are estimated to reach $372 billion in 2011. The overall economic gains from international migration for sending countries, receiving countries, and the migrants themselves are substantial. Remittances can have profound implications for development and human welfare. Remittances can contribute to lower poverty and to the building up of human and financial capital for the poor.”
The publication approached the Colombian and El Salvadoran Embassies regarding remittances’ significance to their nations and populations. New El Salvadoran Ambassador Ruben Zamora characterized remittances as vital to his country.
“Remittances to El Salvador not only represent an economic phenomenon, but also are an element that has social and political implications,” Zamora noted. “They are important for our country because they generate cash flow to the people that need it most. We could say that this is a kind of social security for these people, with the advantage that this money does not go through any red tape. Of course that remittances have enabled a consumption capacity in the sectors of the population who receive them, but also imply that El Salvador is exporting labor, usually the most capable, the most qualified, who is in search of a better situation for their family. Due to the large number of Salvadorans living in the United States, we can say that remittances are an element that greatly configures El Salvador.”
ECONOMIC IMPACT ON LOCAL COMMERCE
While some view remittances favorably, critics question the consequences for local communities and their Main Street businesses. The substantial disposable income leaving immigrant communities through remittances represents money unavailable for local retailers, dining establishments, and markets.
“People have a right to do what they want with their money, but this aspect should be and is an important consideration in immigration policy reform,” observed Ira Mehlman, spokesperson for the Federation for American Immigration Reform (FAIR), a Washington, D.C.-based conservative organization. “You do have this when there are a large number of foreign workers in the economy. You will see a large portion of money is sent out of the country. That money sent out has a negative consequence. It doesn’t help the local economy because that’s money that is no longer in circulation in the local businesses. It’s money that isn’t stimulating the job market and creating local jobs at local businesses. It is also depriving state and local governments of revenues from sales taxes…While the money earned here is flowing out of the country, if the worker brings their families with them, the community also has to pay for education for the kids, and if they need medical attention, pay for the health care also. Both are huge costs to the community. Communities are losing revenue on one end with remittances and having to pay for all the social costs at the same time.”
Pineda countered that immigration reform might reduce remittance volumes, since undocumented workers typically send everything home due to their inability to access banking services.
“If you’re an undocumented worker, you work and send money to El Salvador because you don’t have any legal documents to open a bank account,” she suggested. “You wouldn’t trust a bank to give you your money back if you have no documentation. This community sends all their money there because they can’t open an account. If we have immigration reform, they will leave the money here and buy houses, buys cars and other things – really have a life here.”
Several local Chambers of Commerce were approached for commentary, recognizing that their members potentially lose millions in annual business due to remittance volumes—an often-overlooked drawback of substantial new immigrant populations. While these workers generate millions within the local economy, they frequently redirect most earnings abroad rather than spending locally.
The Everett and East Boston Chambers are examining the matter and developing positions on it.
Revere Chamber of Commerce President Bob Upton stated his organization maintains no formal stance, though personally he would welcome greater retention of these funds in Revere.
“Obviously, we wish they were spending their money in Revere – spending it locally,” he remarked. “If in fact that is going on, that they’re sending so much money out of the country, then it’s not helping local commerce. I think it’s part of an education process. In Revere, we encourage the Spanish-speaking population, the Arabic speaking population and the Portuguese speaking population to learn about the Chamber and do business with Revere businesses. We really do that and have a grant from Speaker Bob DeLeo to help with that. Here, just the sheer volume of dollars is certainly something for businesses to pay attention to.”
PROSPERITY AMID ECONOMIC CHALLENGES
Last Thursday, near Broadway in Chelsea, a continuous flow of people entered Spectrum Communications and Latino Express—two Money Transfer outlets positioned on opposite sides of Everett Avenue.
At Spectrum, conversations occurred primarily in Spanish as individuals successively handed hundreds of dollars in cash to an attendant stationed behind a fiberglass partition in what amounted to an empty hallway.
By day’s end Thursday, that money had likely reached recipients at various international destinations.
Nearby, however, a promising restaurant that closed quickly sits vacant, and several blocks up Broadway, an award-winning BBQ establishment that relocated to South Boston now operates successfully in its new location.
Sidebar –
Top 5 Money Transfer Locations in Chelsea:
Spectrum Communications, 18A Everett Ave., $10,692,300
Broadway Laundry, 899 Broadway, $8,408,676
Caribbean Liquors, 399 Broadway, $8,271,382
Latino Express, 7 Everett Ave., $8,254,447
Telepage Corp., 132 Pearl St., $6,865,152