Poverty in Puerto Rico and the Implication for Statehood

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SAN JUAN — On June 11, Puerto Rico held a plebiscite on the status of its relationship to the U.S. While voter turnout was only about 23 percent, 97 percent voted in favor of statehood. The results of the vote highlight the growing issue of poverty in Puerto Rico.

Puerto Rico became a U.S. territory after the Spanish-American War, which occurred in the late 1800s. As U.S. citizens, Puerto Ricans pay in full for Social Security and Medicare but can only collect on a restricted amount of benefits. The island receives less than half in Medicare and Medicaid funds compared with the 50 states.

In 2006, the U.S. government closed a tax loophole that benefitted businesses in Puerto Rico. This, partnered with the Great Recession of 2008, considerably hurt the island’s economy. While the U.S. has recovered from the recession, Puerto Rico has not. Its economy has had negative growth the past decade, and unemployment is more than double U.S. unemployment.

Puerto Rico has also had a net population loss since 2005 with most emigrants moving to Florida. Poverty in Puerto Rico is a cause of this migration. Fifty-eight percent of Puerto Rican children live below the poverty line compared with 22 percent of mainland U.S. children. In 2014, 54 percent of Puerto Rican children’s parents lacked a secure source of employment. Overall, nearly half of Puerto Ricans living on the island are in poverty.

Currently, Puerto Rico has a debt of $74 billion that its government is unable to repay. Due to Puerto Rico’s territorial status, it cannot declare bankruptcy. Instead, the U.S. government passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) to ameliorate the economic crisis.

PROMESA has led to austerity measures and spending cuts for public programs such as education, pensions, healthcare, transportation and infrastructure. Though the cuts help stabilize the country’s debt crisis, they have not aided poverty in Puerto Rico. Massive protests took place against the spending cuts in spring 2017. When the Zika virus broke out in 2016, Puerto Rico’s Department of Health did not have the money to combat the virus until the U.S. government provided the funds.

Puerto Rico’s precarious financial situation also affected congressional budget negotiations. The most recent budget announced in May, which averted a government shutdown, included funds to support Puerto Rico’s Medicaid program so that 900,000 Puerto Ricans did not lose healthcare.

Puerto Rican officials believe that statehood is an option to stabilize their economic woes. Democratic governor Ricardo Rossello has said that statehood would give Puerto Rico equal footing with the other states. Republican Jennifer Gonzalez, the resident commissioner who acts as Puerto’s Rico non-voting representative in Congress, also supports statehood.

However, the U.S. government is unlikely to act on the results of the most recent plebiscite. In 2012, Puerto Rico held a plebiscite with a similar outcome. The Justice Department stated that the 2012 vote did not have high enough voter turnout nor was the ballot language approved by the Justice Department prior to voting. Similar issues are likely going to come up with this vote.

Nevertheless, public officials in both Puerto Rico and the U.S. from both political parties remain committed to finding a solution to poverty in Puerto Rico, whether it be admitting the fifty-first state or maintaining Puerto Rico’s territorial status.

Sean Newhouse

Photo: Flickr

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About Author

Sean Newhouse

Sean lives in Greensburg, PA. His academic interests include Political Science, Communication and Public Relations. Sean spent two weeks on Standing Rock Lakota Indian Reservation this past May.

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