Fazendo América. Is the Dream Over?


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Brief discussion about the brazilian community and the impact of the economic crisis and political climate on their decision of staying or living the United States.

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Fazendo América. Is the Dream Over?

  1. 1. Alvaro Lima has been in the United States for 22years and is the Director of Research for the Cityof Boston. He is an economic adviser for theMayor of Boston, Thomas M. Menino. Recently heserved as Senior Vice President, Director ofResearch of the Initiative for Competitive InnerCity (ICIC), a non-profit organization founded byHarvard Professor Michael Porter. An economistby training, he is the former chief of theEconomic Department of the Ministry of Industryand Energy in Mozambique and coordinator ofRegional Development Projects at the Institutefor Social and Economic Research—IPARDES, inhis home country Brazil.Mr. Lima serves on many Boards and Committeesincluding the Office of New Bostonians, theGovernor’s Adv ivory Council for Refugees andImmigrants and the Federal Reserve Bank ofBoston ‘s Community Investment AdvisoryBoard.
  2. 2.   Brazil has long seen itself as a destination for immigrants from across the globe   Large-scale immigration from Brazil is a relatively recent phenomenon   Today, there are approximately 2.5 million Brazilians living outside Brazil Main destinations for Brazilian immigrants:   U.S. – 42%   Paraguay – 23%   Japan 12%Source: Jose Alberto Magno de Carvalho, CDRP, Federal University of Minas Gerais
  3. 3.  According to the Brazilian Ministry of Foreign Affairs, between 1.3 and 1.5 million Brazilians live in the United States distributed as follows:Source: Brazilian Ministry of Foreign Affairs, 2007.
  4. 4.  Brazilian immigrants contribute to the economy as workers and consumers: •  $28 billion in annual spending •  $58 billion contribution to the regional product •  $7 billion in state and federal taxes •  625 thousand indirect jobs created •  31% of all housing units occupied by Brazilians in the U.S. are owner occupied.Source: Boston Redevelopment Authority (BRA) Research Division. (2005). (REMI) calculations based on the 2007 American Community Survey U.S Census Bureau; Public Use Microdata(PUM) 5% Sample 2000, U.S. Census Bureau, BRA Research Division Analysis.
  5. 5.   They contribute also as entrepreneurs. Brazilians own more than 3,700 small and median size businesses   Brazilian businesses are concentrated in retail trade, accommodations & food services, and other services:   Annual Sales - $3 billion   Direct and Indirect Jobs – 24,000   Direct and Indirect Wages - $952 million   State and Federal Taxes - $240 million (direct and indirect)Source: U.S. Bureau of Census, Public Use Microdata (PUM) 5% Sample 2000, BRA Research Division Analysis; Fazendo America, Alvaro Lima and Pete Plastrik, 2006
  6. 6.  Most Brazilian immigrants are employed (85.6%). The majority, in service occupations followed by management, professional and other related occupations Employment   90.0%   85.6%   80.0%   70.0%   60.0%   50.0%   40.0%   30.0%   20.0%   12.4%   10.0%   0.8%   0.4%   0.4%   0.4%   0.0%  Source: U.S. Bureau of Census, Public Use Microdata (PUM) 5% Sample 2000, BRA Research Division Analysis; Fazendo America, Alvaro Lima and Pete Plastrik, 2006
  7. 7.   Most research on remittances point out a monthly average of $400 for Brazilians: Beneficiary  States   60   51.6%   50   40   30   20   9.6%   10   6.4%   6%   5.2%   4.4%   3.6%   3.6%   2.4%   0   Beneficiary  Ci@es   8   7.6%   7.2%   7   6%   6   5.6%   5.2%   4.8%   5   4   3.6%   3.2%   2.8%   2.8%   3   2.4%   2   1   0  Source: U.S. Bureau of Census, Public Use Microdata (PUM) 5% Sample 2000, BRA Research Division Analysis; Fazendo America, Alvaro Lima and Pete Plastrik, 2006
  8. 8.   Brazilians have an average number of people with bank accounts in the U.S.: Bank Account in the U.S.by Nationality 90.0 84.5 Above Average 80.0 75.5 75.0 70.4 70.0 Average = 61.1% 58.3 60.0 53.0 Below Average 50.0 39.5 40.0 33.0 30.0 20.0 10.0 0.0 Monthly  Payments  to  Credit  Card  by  Na@onality   $800.00   $714.74   $700.00   $600.00   $500.00   $413.21   $400.00   $341.00   $317.65   $301.51   $300.00   $265.45   $217.76   $212.52   $200.00   $100.00   $0.00  Source: U.S. Bureau of Census, Public Use Microdata (PUM) 5% Sample 2000, BRA Research Division Analysis; Fazendo America, Alvaro Lima and Pete Plastrik, 2006
  9. 9. Credit/Debit  Card  by  Na@onality  70.00%  60.00%  50.00%  40.00%  30.00%  20.00%  10.00%   0.00%   Both   Credit   Debit   None  of  them   Financial  Accounts  in  Country  of  Origin   37.6%   40.0%   35.0%   28.9%   30.0%   26.0%   25.0%   20.0%   15.0%   10.0%   5.5%   5.0%   1.6%   0.3%   0.0%   Does  not   Checking   Savings   Credit  card   Investment   Foreign   have  /  NR   account     account   account   currency   savings  
  10. 10.  Between 2005-2006 U.S. immigration increased 3.8% while the Brazilian flow increased 4.3%. During the next period, 2006-2007, the Brazilian flow decreased slightly (-1.1%) while the national increased only 0.7%: Welfare Reform Act of 1996 1982 deadline for US Patriot U.S. residence Immigration Act of Reform and 2001 Control Act of Immigration Act 1986 of 1965Source: U.S. Census Bureau, BRA Research Division Analysis
  11. 11.  High levels of immigration (the 1990s ranks numerically as the highest immigration decade in American history - over 14 million legal and illegal newcomers) creates serious anxiety on the American population;  Deep divisions and genuine differences of opinion help explain why the country’s elected officials have been unable to produce solutions:   The House of Representatives passed a bill in December 2005 that calls for though new enforcement measures at the border and in the interior of the country. Its logic is that immigration is fundamentally an issue of national sovereignty and the rule of law;   The Senate legislation that passed in May 2006 also adopts stringent enforcement measures. Bipartisan and comprehensive, it also expands legal immigration, including the opportunity to earn legal immigration, including the opportunity to earn legal status for most of those currently in the country illegally.  The 2006 “Independent Task Force on Immigration and America’s Future,” co-chaired by Spencer Abraham and Lee H. Hamilton,* sets immigration levels of approximately 1.5 million (actual levels are 1.8 million) annually as a starting point, however. Why?Source: Jeffrey Parsel, Pew Hispanic Center, 2008. Spencer Abraham is a former U.S. Senator from Michigan; Lee H. Hamilton was the vice chairman of the 9/11 Commission and currently serves onthe President’s Homeland Security Advisory Council, having previously served in the U.S. House of Representatives for thirty-four years.
  12. 12.  They recognize that immigration is critical to sustaining the vitality of the U.S. economy:   The workforce is aging, there are fewer new native-born workers entering the labor market (more than 10 million skilled workers will be leaving the workforce by 2010);   They also recognize that the Baby Boom generation just hit 62 and is filing for Social Security benefits and that the ratio of seniors to prime- working-age adults is expected to grow from 240 to 411 per 1,000;   For them, immigrants will be expected to fill this growing gap in the labor market;   They also understand that past experiences have been notoriously ineffective:   The 1952 legislation imposing sanctions on those harboring or abetting unauthorized immigrants did not work and ended up exempting employment from being considered as “harboring;”   The passage of the 1986 Immigration Reform and Control Act (IRCA), should, supposedly, correct the short-comes of the 1952 legislation by making border enforcement, employer sanctions, and legalization key elements of the new strategy, has been notoriously ineffective;Source: Jeffrey Parsel, Pew Hispanic Center, 2008; Report of the Independent Task Force on Immigration and America’s Future, 2006.
  13. 13.   Again, the Homeland Security Act of 2002 reinstates these same principles but proves to be ineffective;   The Task Force asserts that “the United States lacks the capacity to enforce the departure of a significant percentage of the millions of unauthorized immigrants, many of whom have lived and worked in the U.S. for years and have U.S. citizen children;   Their core conclusion is that “the benefits of immigration significantly advance U.S. national interests in the 21st century. However, harnessing those benefits over the long term requires fundamentally re-thinking U.S. policies, and overhauling the nation’s system for managing immigration;   Brazilian activists and the Brazilian immigrant press continue to push the “exodus” story line. The main stream press repeats it ad nauseam…Source: Jeffrey Parsel, Pew Hispanic Center, 2008; Report of the Independent Task Force on Immigration and America’s Future, 2006.
  14. 14. With  the  dollar  falling  and  the  economy   in  Brazil  booming,  Brazilian  immigrants   in  the  United  States  are  returning  home   by  the  thousands.  Dan  Grech  reports.  Fausto Da Rocha, executive directorof the Brazilian Immigrant Center,said the weak dollar is just one of “In Brazil the economy isseveral reasons Brazilians are booming,” said Fausto Da Rocha,returning home. Brazilians are the executive director of the Braziliansecond-fastest growing group of Immigrant Center based inillegal immigrants in the United Allston.  “There are 160,000 newStates, and many were deeply jobs every month and the cost todisappointed last summer when live in the United States is tooCongress failed to pass a bill that high.”would have given millions ofimmigrants a chance to apply forlegal residency.
  15. 15. Fausto Da Rocha, executive director of the Brazilian Immigrant Center, said theweak dollar is just one of several reasons Brazilians are returning home.Brazilians are the second-fastest growing group of illegal immigrants in theUnited States, and many were deeply disappointed last summer when Congressfailed to pass a bill that would have given millions of immigrants a chance toapply for legal residency.  More recently however, the “exodus” has become a little more difficult to explain as such. Why?  The main reasons explaining the “exodus,” are:   Economic downturn in the U.S. - makes more difficult for immigrants to find well-paying jobs;   Inflation in the U.S. - the rise in price of food and fuel which makes life more expensive reducing the capacity of immigrant to send money home;   Value of the dollar - the appreciation of the real against the dollar reduce the value of remittances;   Migration climate – aggressive immigration enforcement reduces immigrants ability to find jobs and to send money home.
  16. 16.   Economic downturn in the U.S. may imply downturn in Brazil, particularly Brazilian immigrant-sending cities - or, a boom in Brazil may not touch these areas. Middle-class jobs, particularly in Brazilian immigrant-sending cities, continue to be hard to find even with the actual boom ;   Inflation in the U.S. does not imply return to Brazil, because despite the fast depreciation in real terms, the U.S. informal wage paid to foreign workers exceeds the legal minimum and even that available for skilled workers in Brazil ;   Depreciation of the dollar forces Brazilians to work longer or harder to remit the same amount as before;   Migration climate , that is aggressive immigration enforcement may force Brazilians to live but the decision is not as simple as it appears; Finally, most people do not emigrate to escape perennial unemployment or destitution in their homeland but to attain or maintain a lifestyle
  17. 17.   Curiously enough, the recent article (October 14, 2008) on the right features Silvana Soares, the Director of Communications for a center in Governador Valadares, in a interview to the MetroWest Daily News of Framingham explaining how difficult it is for family members left behind while their loved ones work overseas… NOT HOW THE EXODUS HAVE DEVASTED THE COMMUNITIES IN VALADARES…
  18. 18.  The current economic slowdown coupled with aggressive immigration enforcement has forced some Brazilian immigrants to return to Brazil. It has also “locked-in” the majority of Brazilians in the U.S. because the cost of living, and trying to return later, particularly for illegal immigrants, is very high; As shown before, some Brazilians have left, but there is no “exodus.” the reasons they emigrated are still here. The actual economic crisis cut both ways as the recent article in the Milford Daily News below attests: In 2003, when he came here, the rate was $3 real (Brazils currency) for every dollar, and in August, when he thought it was better to leave for good, the exchange rate was $1.5 real for every dollar. But after the dollars value went up in Brazil this past week, a result of the worldwide financial crisis that pushed its price up, Vidal decided to stay. When the markets closed on Friday, the exchange rate was $2.3 real for every dollar. "Im not going back now," said Vidal, 27, who works in construction. "Ill stay one or two more years, but I may change my mind depending on what happens. I know two friends of mine who have canceled their trips back home because the dollar went up."