Culture Guides

Western Union – Getting Rich on the Backs of the Poor

Western Union make a billion dollars a year off the poorest people in the world.

Disclaimer: Road Junky could do with the publicity generated by a law suit for libel from Western Union but we’d like to advise our readers that is purely an opinion piece and not to be relied upon for factual information of any kind

Take a guess: what accounts for the biggest flow of money transfers in the world?

Could it be the generous foreign aid given by America and Europe to the Third World (ignore for now they often want the money back with interest)?

Could it be the philanthropic departments of multinationals looking to boost struggling countries and ensure future markets?

Or could it be the poor sods living in squalid conditions in foreign countries doing the worst jobs in the world to support their families back home?

Every year around $260 billion is sent back home by immigrants, legal or otherwise, through money transfer services like Western Union, Moneygram and others. These are the people who are picking your fruit, working on the oil rigs that keep your car running, cleaning your houses and doing all the dirty work that people in affluent countries would generally rather not do.

Ok, that’s the way things go. Everyone has to start somewhere and who knows but that in 25 years time we’ll have robots cleaning our bathrooms if only to save the dignity of our fellow humans. But here’s the thing – after working for minimum wage or less and living together in crowded rooms to save money, these immigrants have to get their hard-earned dollars, euros or yen back to their families back home who live in hope that the next installment will arrive soon.

Of course, these workers often haven’t got the legal permits, addresses and other necessary papers to open a bank account and even if they do, banks back in their home countries may be hopelessly corrupt of inefficient. Leave it to the free market to find a way to solve problems though and enter into the picture Western Union – the money transfer service that allows loved ones to receive money in minutes.

So here’s how it works; the foreign worker or traveler goes to a Western Union agent, fills in a bunch of forms and then sends the money off. The recipient on the other end picks it up with a money transfer number and everyone’s happy.

Especially Western Union.

Because though charges vary, it’s not uncommon to pay 8% of the total in transfer charges. In fact, if the amount is low, transfer charges can be even higher. Take Teri, for example, a Filipino working his ass off in a grungy kitchen in London, who now wants to send money back home so his grandmother can afford painkillers for her cancer. He can afford to send the equivalent of $100 and according to Western Union’s online calculator he’d have to pay $28 in fees.

And it doesn’t stop there.

IN ADDITION TO THE TRANSFER FEE, WESTERN UNION ALSO MAKES MONEY WHEN IT CHANGES YOUR DOLLARS INTO FOREIGN CURRENCY – well, at least they’re honest. What does this mean? It means that Western Union makes up its own mind what the official exchange rate is, even if its significantly lower than the going market price.

But it’s a free market so the immigrant doesn’t have to use Western Union if he thinks they’re exploitative. Well, making the dubious assumption that the foreign worker has an education and a head for maths, the other transfer services like MoneyGram and Travelex aren’t much better anyway. There are, however, numerous services offered by companies who have a presence in both the host and destination countries to transfer the money. Often small businesses, they even offer express couriers to deliver the money personally, sometimes only on a trust basis.

Sadly, these services are illegal. Money is only allowed to move around the world with the express permission of governments and the dice are loaded in favour of existing financial institutions like Western Union. Their vested interests are well-protected by the politicians and should anyone protest they can always wave the red flag of terrorism – these immigrants might be sending their hard-earned wages back to buy bombs for Osama!

So the market in money transfers is far from free.

Of course, it’s no crime to make money or run a big, successful company. But when a company makes almost $1 billion a year in profits largely by scraping juicy cuts off the backs of the poor, the immorality of our present economic system is blatant, ugly and entirely avoidable.

After the 2004 tsunami devastated South East Asia, Western Union sent a million bucks to the needy (little of which probably reached them given the tsunami fund scams of the time) – that is, 0.1% of its annual profit to one of its biggest customer blocs.

Road Junky hopes Western Union goes bankrupt due to some terrible hacking intrusion and when they’re dead we’ll do a little cyber-dance on their graves.