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Western Union
Migration is so central to Western Union that forecasts of border movements drive the company’s stock. Its researchers outpace the Census Bureau in tracking migrant locations. Long synonymous with Morse code, the company now advertises in Tagalog and Twi and runs promotions for holidays as obscure as Phagwa and Fiji Day. Its executives hail migrants as “heroes” and once tried to oust a congressman because of his push for tougher immigration laws...
With five times as many locations worldwide as McDonald's, Starbucks, Burger King and Wal-Mart combined, Western Union is the lone behemoth among hundreds of money transfer companies... Last year migrants from poor countries sent home $300 billion, nearly three times the world’s foreign aid budgets combined.
Here is the full story, which is consistently interesting throughout.
Posted by Tyler Cowen on November 22, 2007 at 08:18 AM in Economics | Permalink
Comments
I was always curious, and remain curious, about the economic effect of dollars sent out of the US. Do they simply disappear from the money supply, to get replaced by the Fed (in effect a gift to the US government)? Or do they come right back in buying something in the US (thus boosting the US economy)? Or is there in fact some sinister effect, as the popular wisdom has it, as if actual wealth disappeared from the US?
Posted by: Ron Hardin at Nov 22, 2007 11:17:20 AM
Ron,
As I understand it, foreign holdings remain part of the money supply (although not accurately counted) and serve as basically a loan to the U.S. government until they're exchanged for U.S. made goods or services (exports) in some fashion. So that would be answer #2 & half of #1. I'm sure someone else will chime in with a more correct or detailed answer soon.
Happy Turkey Day!
Posted by: Andrew at Nov 22, 2007 11:44:48 AM
Also popular with those who acquire their medication overseas (so I'm told). Positively agorist!
Posted by: cerebus at Nov 22, 2007 2:59:09 PM
Are immigrant remittances just a special case of the "resource curse" that retards the development of countries with rich resource deposits where you get high incomes and consumption but low development?
Posted by: spencer at Nov 23, 2007 9:08:34 AM
Western Union is starting to attract more competition because WU fees are high.
Look for Wal-Mart to eat up a big chunk of the WU business.
Posted by: save_the_rustbelt at Nov 23, 2007 9:19:29 AM
How did they get 3 pages with nothing about hawala? The War on Terror crackdown on hawaladars is almost certainly herding business back to WU and the like.
Posted by: Rimfax at Nov 23, 2007 12:31:12 PM
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