The Human Cost of Globalism: New York Nannies and Georgetown Slaves

The grave of Cornelius Hawkins, one of 272 slaves sold by the Jesuits in 1838 to help keep what is now Georgetown University afloat. Source:thenewyorktimes

The grave of Cornelius Hawkins, one of 272 slaves sold by the Jesuits in 1838 to help keep what is now Georgetown University afloat. Source:The New York Times

New Orleans   The argument changes when the global economy acquires a human face. Rarely has that been clearer than in two recent stories, one about a Filipino nanny in New York City and the other tracing the descendants of slaves sold by Georgetown University to their graveyards and relatives in Louisiana.

We talk about the predatory nature of remittances frequently because they bleed immigrant families and migrant workers of critical financial resources that they are sending their families and communities in their home countries as well as the quality of living and employment conditions where they work. The New Yorker ran a long story about a woman they called “Emma” from the Philippines, college educated in accounting with nine daughters and a husband. At forty-four years old with her oldest two daughters in college she came to the realization that there was no way on the wages paid in the Philippines that they would be able to pay for seven more to also go to college. She then made the wrenching decision to join a migrant “mother’s march” of sorts, joining a sister, women from her church, and a former home economics teacher in illegally migrating to the US to work as a nanny and caregiver.

The article points out that more than half of the workers surveyed several years ago by the Domestic Workers Alliance were undocumented. It also makes clear that the new, 21st century migrant is more likely to be a women and someone employed in the service industry as a caregiver than in older migrations of construction and factory workers. A huge export from the Philippines is workers, known as OFW or Overseas Filipino Workers since “a tenth of the population now works abroad, supporting nearly half of the country’s households and leaving some nine million Filipino children missing a parent.” And, it’s usually the mothers now, since “in the past decade, three-quarters of OFWs have been women.” Emma has not seen her children or husband or been home in 16 years. She has missed her mother’s funeral, though she and her sister paid for it. She has gotten her daughters through college but the exchange has been living on $20 per week and afraid to go home because she could be prevented from returning and now doesn’t have enough money yet to retire in the Philippines either. Besides the predatory exchange rate on remittances, she now has lived the bad bargain of trading hoped for opportunity for her family with her own life and a list of payments in small tragedies of loss in her family.

The story of Georgetown University’s reckoning with the its actions as a slaveholder and slave seller is the same type of story except under a more coercive commerce when globalism was even more ruthless in finding labor for jobs few wanted at unconscionable pay rates. Prices were put on human life, families were ripped apart, children and adults were chattel. The New York Times detailed how the Catholic priests presiding over Georgetown sold 272 slaves from plantations no longer able to fully support the school to “save” the university and pull it out of debt. The records of the sale and the work of genealogists have allowed them to track down relatives of many of the families that ended up in Louisiana. A great-great granddaughter of one who was sold as a child was able to find his burial place, and she and others are demanding Georgetown do right in partial exchange for its historic wrong by offering scholarships to descendants of that horrid sale. It would seem to be the least they could do.

At the end of these articles, detailing the terrible costs of exploitation, forced or voluntary, it was almost impossible not to have tears in your eyes for them, for ourselves, and for the wretched waste of people ground up in the gears of our unfeeling global economy and the unequal price paid for the wealth of nations and the people who spend it so freely.

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Why is it so Hard for Policy Makers to Separate Access from Affordability?

981207_10156731174555570_8112977795619686083_oNew Orleans    Life, work, and the world are full of mysteries, but after years of hitting my head against various walls, I’m finally connecting the dots in trying to understand the peculiar responses we sometimes get in trying to change public policies and private pricing strategies.

Remittances are a prime example. Talking last week to a professor who teaches a course at a local university on personal finances, she was excited when I told her about ACORN’s Remittance Justice Campaign, because she wanted her students to understand the complicated world of money transfer systems. When she understood the topline demand of our campaign was to cap the pricing at 5% to stop remittance costs from being so predatory, her face almost deflated. Of course she supported our position, don’t get me wrong, but affordability had not occurred to her as an issue in the way that it is of course paramount to immigrant families and migrant workers trying to send money home to relatives and communities in their home countries.

ACORN Canada members are testifying this week before the CRTC (Canadian Radio & Television Commission) about the high price of internet in Canada. Quoting from an early copy of their prepared testimony:

…the organization released a report summarizing 400 testimonials from low-income Canadians about how vital yet unaffordable home internet is.

A recent CRTC survey suggests that many Canadians think home internet is essential, but too pricey. Half of the survey’s 29,000 respondents are dissatisfied with the price of their internet service. ACORN Canada members view affordable access to the internet as essential to improving low-income Canadians’ ability to succeed in the digital economy.

“How can low-income families get out of poverty if they can’t apply for jobs, or access government services? Our kids can’t even do their homework,” says ACORN Canada President Marva Burnett. “Access to the internet is a right, and going to the library or coffee shops are not practical solutions.”

The same dilemma was faced by the FCC in the United States and, as we recently discussed, and the FCC duck walked around the issue by subsidizing the cost of internet ostensibly for lower income families by around $10 per month, rather than tackling head on the fact that affordability is the barrier to access, rather than availability of the internet.

This is an old saw. In the housing collapse from 2007, the supposed “reform” was trying to force lenders, many of whom were overtly predatory in the subprime mortgage field, to have to assure the loan was affordable to the family before issuing the money. When they were just churning loans, there was more than enough access to mortgage lending capital, but whether it was affordable within an honest reckoning of family income was a diminished factor in pumping air into the bubble.

Why do policy makers refuse to routinely address the issue of affordability when dealing with the question of access of services and implementation of programs? This is where the divide of experience between the one-percenters and big whoops from the rest of us and especially from low-and-middle income families becomes so pronounced and creates such tragic results. They just don’t get it, and too often these days, seem unwilling to do the “homework” and listening to understand the issues from any other point of view, especially from the perspective of our people.

Simple suggestion: consider affordability first, and access later down the list. Make stuff work by understanding that pricing pushes people as a primary concern.

Duh!

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Finally Remittances is a USA Political Issue, but for the Wrong Reasons

indexNew Orleans     For several years ACORN members have kicked at the doors of government officials and financial institutions around the world in our Remittance Justice Campaign seeking to stop the predatory cost structure of money transfers from immigrant families and migrant workers back to their families in their home countries. For all of the talk from the World Bank and the G-8 and its moralizing about reducing the cost of remittance transfers to 5%, it has missed its target dates and done actually nothing to achieve the goals, leaving the poorest workers in the world paying billions to transfer one or two hundred dollars to help their families, while corporations and the rich transfer millions through the same computer networks for fractions of a penny. Remittances exist in a regulatory wasteland of uncoordinated country rules and central banks allowing money transfer organizations and banks to charge pretty much whatever they can get away with to individual customers.

Now, suddenly remittances have their almost front page moment thanks to an unlikely advocate, the irrepressible and uninformed Donald Trump who has now stumbled onto remittances the way someone might run into another drunk while trying to make your way out of a bar while a fight is going on. Turns out his plan for paying for the preposterous border wall between the United States and Mexico that would supposedly stop illegal immigration is to somehow try to shakedown the Mexican government for “a one-time payment of $5-10 billion” to pay for the privilege. Mexico’s central bank estimates that $25 billion in remittances comes into their economy annually, so Trump’s bluff is that he would somehow use executive orders to threaten new amendments to the Patriot Act that would somehow stop the flow of remittances and Mexico would rush the money to pay for the wall to keep the cash flowing.

President Obama derided the notion by taunting Trump and saying essentially, “good luck” tracking every Western Union transaction. Sadly, his statement, though scoring points politically and rhetorically, also reveals the level of impotence and indifference the US government has shown in moving Western Union, MoneyGram or any of the other players, large or small, to deal seriously with the issue of any kind of regulations or control of the money transfer business. Basically, Trump’s plan targets the poor of Mexico overtly, rather than the current public policy on remittances which targets the poor indirectly by ignoring the issue. The Consumer Finance Protection Bureau has made noise about stepping into the issue of pricing and transfers since the Federal Reserve has abdicated any interest protecting the users from predatory practices so that their real concerns, the financial institutions, can keep milking this cash cow, but there has been no follow-up yet.

Competition and international ownership of the largest Mexican banks has forced the fees down in the Mexican market, even as they have remained exorbitant in many other remittance channels globally. Most reporters on this issue who are as oblivious about remittances as Trump and his campaign, and simply say there would be legal and political challenges. In reality after some momentary inconvenience and disruption the transfers would simply go black market and informal, like hawala systems. There would be thousands legally “muling” money across the border legally within days. The Mexican government would protest formally, but informally would simply yawn, while financial institutions on both sides of the border, desperate to keep the rip-offs running, would be screaming like stuck pigs at not being able to milk this cash cow.

Regardless, now that Trump has raised the issue, is there any chance we might finally get politicians, the press, policy makers, and the general public to really understand remittances and put a stop to the predatory feasting of financial institutions on immigrant families and migrant workers?

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African Internet Barriers Dropping for Commerce not People

water for sale

water for sale

Nairobi    My first visit to Nairobi was more than a decade ago. Where I stayed claimed access to the internet on a dial-up modem so slow that each email would take fifteen minutes or more to send, if it didn’t timeout before completion. Doing the least amount after a day of work meant staying up until the wee hours to do the bare minimum to keep up and hold on the rest of my job. There’s improvement without question. There is more wireless access and at better speeds even at Shalom House, where they wisely have multiple routers. On my last trip to Nairobi, we met with an NGO managing an elaborately funded tech space who touted the city as the future Silicon Valley of Africa. Now three years later, the evidence is still hard to find.

The bright shining star of tech in Kenya has been via mobile phones and money transfers and payments via cellphones. The competition between Vodafone, AirTel, and Safaricom continues to be intense and, relatively speaking, costs have stayed down somewhat. There are signs everywhere in the malls claiming they accept mobile payments. There are more smartphones in evidence, but largely that means in the malls of the middle class. Talking to ACORN Kenya organizers the dominant phones are still the basic “burner” models often requiring a switch of SIM cards to access one or another of the dominant networks.

Cyber cafes are still the standard access, if any, for most people, and they are heavily metered. Most computer terminals are little more than typewriters with a screen so that work can be done off the grid, and then loaded up quickly through a thumb drive to keep the cost down. One of my organizers had worked out an off-the-records deal at a cyber café to be able to get on the internet in the low demand, after hours to cut the cost. They were signed up on Facebook, but didn’t really use it, because “time is money.” YouTube was unknown to my team though they were fascinated that ACORN International had its own YouTube channel. The notion that they would pay the tariff to listen to their interview on my radio show for thirty minutes was remote given the cost. The small Acer computer I had muled over to them on my last trip had expired long ago. A used computer donated to the office had been serviceable but on the eve of my arrival failed to turn on. The idea of surfing the web for research or information was a mirage for these capable and adept organizers. They looked over my shoulder with enthusiasm and interest as I fulfilled their request to create an ACORN Kenya Facebook page.

The much touted cellphone based money transfer system is also a mirage outside of commercial applications that benefit the carriers and commerce. Their bank now charges a fixed fee of 600 Kenya Shillings or $60 USD to handle the transfer from ACORN International to cover their expenses, taking a huge bite of every remittance. Meeting with the bank they explained they charge the same fee no matter the level of the remittance whether a hundred dollars or ten thousand, making a classic case for low-end exploitative, predatory pricing.

We spent some time trying to find a workaround with PayPal where the fees would be significantly cheaper. Kenya was prominently displayed on their website, so with Sammy and David over my shoulders spelling the street names and watching in wonder, I enrolled the ACORN Kenya Trust as a new member and successfully navigated the clunky site until the point where we would enter the bank account for ACORN Kenya. After hitting a score of links that seemed to lead that way and being returned as often to the original site, I was never able to enter the Kenya Commercial Bank and ended up sending a message to the Help site. I was troubled by seeing Equity Bank listed as perhaps a “preferred” receiver of transfers for PayPal, so I fear this much touted “solution,” is captive of yet another commercial transaction established with only one Kenyan banking institution.

The rest of our day was more productive but the lessons of high barriers to internet access and continuing predation for money transfers cast a cloud over many of the day’s plans and conversations.

mosquito net

mosquito net

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Smartphones Might Accelerate Lowering the Cost of Remittances

spNew Orleans   For so many smartphones have only meant an even bigger time suck on Facebook, an easier way to play games while waiting for the bus, and a chance to watch YouTube videos of cats or people tripping on sidewalks or whatever. For those people who still think the whole world is only their personal oyster, there might have been some head scratching as they heard that a must-have tool for migrants, fleeing conflicts in the Middle East and trying to navigate their way across Europe to promised lands, is a smartphone. Smartphones? They don’t hardly have two cents and the shirts on their backs, but they have a smartphone? What’s up?

Well, the migrants fleeing for their lives is a huge issue and a humanitarian crisis, but maybe there’s a way to see a silver lining in the increased ubiquity and the obvious affordability of smartphones, especially when it comes to the drum that ACORN International and its affiliates continue to beat about the vital necessity as well to lower the cost of money transfers or remittances from these same migrants and other immigrants to each other and their home communities. Cheap smartphones flying off the shelf from China are part of the clue here, but there are also hopeful signs in Africa as some companies finally are making it easier – and cheaper – to use mobile phones to make bi-national money transfers. Google’s entry into the market in Africa and other developing countries could – and should – accelerate this as well.

London-based Vodafone and South Africa’s MTN, the largest telecom in Africa, are moving forward to facilitate mobile payments between their two huge networks. Vodafone’s Safaricom subsidiary in Kenya through its 14 million customer M-Pesa network already facilitates mobile phone payments for a huge number of purchases and services. Finally central government banks in Uganda and Rwanda have approved telecom transfers. The network of partnerships these companies are building in East Africa is expected to lower the transfer costs of remittances from the current 20% to only 3% or less. The ACORN International demand to the companies has been 5%, so this would be huge. The toothless World Bank even says that reducing prices for the $48 billion worth of remittances in Africa by even 5% say from 20% to 15% would save desperate families $16 billion!

Small, old school “burner” type mobile phones with dual SIM card slots are all over Kenya to allow transfers across networks, but new market entries in large, developing countries could also make a difference. Google’s Android One phone, using its software and Chinese and other manufactures came out last year in India and ten other countries including Pakistan, Indonesia, Turkey, and Philippines. An upgraded model of Android One was announced by Google a couple of weeks ago for Nigeria with all the features needed from dual SIM slots to software lengthening battery life and speeding internet access where connections are weak. The phone is also available on-line in Egypt, Ghana, Ivory Coast, Kenya, and Morocco.

For smartphones to become the handsets of choice and tools for forcing the cost of remittances down and the predatory costs to plummet, pricing is still an issue. Many of the Chinese phones, that also use older versions of Android software, sell for $50, and African and other developing country customers, not unlike many of us non-I-Phone people, purchase on price. Google’s phone is now set at $89 in Nigeria and almost $100 in India. MTN offers $62 smartphones in South Africa and various models between $47 and $57 in Nigeria. Google is likely going to need to get the price down to $30 to $50 to play head-to-head. But, that’s their problem.

Ours continues to be how to put billions of more dollars into communities for their own development and to families to improve their living standards. Moving closer to a system that gets rid of the bankers, Western Union’s, and MoneyGram’s, and lets money move hand to hand through your phone at a fraction of the cost, is our big problem, and smartphones and even the Googles and almost equally predatory telecoms may help us get there, whether that was their intention or not.

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The “Venmo Line” and Moving Cash More Cheaply

venmoNew Orleans     We are making progress on our Remittance Justice Campaign. A federal bill has now been introduced in Canada to cap fees and other costs at 5%. Provincial bills have now been introduced in British Columbia and Ontario. Reports from Honduras indicated that there is movement in Tegucigalpa at capping the fees finally. A report from France indicates that the giant telecom, Orange, has announced lowered costs for transfers to French speaking African countries. These may be baby steps though compared to what is possible with newer technology, startups, and other tools, if we could get our members over the digital divide.

A Wall Street Journal column recently began with a story about a US viewer of a news report on a demonstration in the Ukraine last year where a protestor held up a sign with their bitcoin transfer information and the savvy techie sent him $10 in bitcoin. That is NOT what I’m talking about, because even while repeating that story, I feel like I’m talking a foreign language.

On the other hand in Canada, we tried to figure out if Venmo worked there. Oh, you don’t know Venmo? Then don’t call yourself hip, though my tongue is solidly in my cheek, because I only know Venmo since one of my closest living relatives is on the proper side of what the company calls the “Venmo line,” which is people 30 years old and under. The cost of transfers through Venom is nada, zero, zilch! Venmo can do this for free because they are moving bits of data around with permissions from one bank account to another. Sadly, Venmo, when we checked, is no-go in Canada and only works in the USA now because of complicated banking regulations, similar to what is hampering us on remittances. Electronic payment methods using credit cards aren’t better. In fact we have a strange bedfellow ally in Walmart that is suing Visa for more than $5 billion “alleging the fees it charges when customers use plastic are unreasonably high.”

The Wall Street Journal agreed with ACORN as well, saying that Western Union, MoneyGram and the like charge fees that “run as high as 8%, not including the less-than-favorable exchange rates….” They cite some potential competitors like TransferWise that “matches pools of people in two different countries who want to send money to the opposite country, thus eliminating the need to actually transfer money at all.” What they seem to have done is apply technology and a matching service to the age old hawala system still popular in the Middle East and frequently used in South Asia, though technically illegal there. In fact a company with a similar name, Dwolla, has “built a federally approved payment network, called FiSync, that allows any connected institution to instantaneously send any amount of money.” And, yes, they also do this for free!

It’s hard to tell what the tipping point might be that stops the predatory money exchangers from muscling up on transfers from migrant workers and immigrant families back to their home countries, especially given the persistence of the unbanked, but the gap is closing on these rip-off artists whether politically or technically as they get driven to either change or die.

***

Wang Feng In the Spring

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