SAN JUAN, Puerto Rico– An island whose name means “Rich Port” in Spanish and a territory—although not a state—of the world’s last superpower, Puerto Rico’s economic situation cannot be more ironic. Having been an American territory since 1898 after a war with Spain, Puerto Rico remains the poorest region of America. It is estimated that the poverty rate in Puerto Rico is 44.9% while the figure in Mississippi, the U.S. mainland’s poorest state, is placed at 24.2%.
More shockingly, 56% of Puerto Rican children—U.S. citizens—live in poverty while the U.S. average is 22%. After a non-binding referendum in 2012 in which 61.11% of the voters expressed their wish to become the 51st state, Puerto Rico is essentially a state-in-waiting. But what are some of the problems that cause poverty in Puerto Rico, especially in comparison to the rest of the United States?
Having the peculiar status of an un-integrated territory, Puerto Rico is governed separately from the rest of the U.S. It has its own government and its inhabitants who, although technically American citizens, are not able to vote during the U.S. presidential elections. However, Puerto Rico uses the American dollar. Thus, the relationship between the rest of the U.S. and Puerto Rico is similar to that of the European Union and its member states concerning financial and economic policies. In a recession since 2006, Puerto Rico cannot simply make the American dollar cheaper (inflate it) just to solve its own financial problems.
Furthermore, the island’s mounting debt crisis is also warding off investors, aggravating poverty by raising unemployment. The rising living cost and the stagnant wages are also a problem. Even those who are employed are living in precarious situations. Of more than one million Puerto Ricans in the workforce, nearly 450,000 people work less than 40 hours a week, part time and with minimum salaries. In addition, another vexation of the island is the astronomic income gap between men and women: nearly $8,000 on average per year. This inequality presents a critical generation income inequality and socio-economic difficulties.
The island’s awkward legal status as an un-integrated territory also presents another problem: it cannot file for bankruptcy protection like Detroit. Therefore, the island is stuck in a monetary and financial limbo. While Greece may choose to leave the EU, shift back to the drachmae (its old currency), and attract investors with cheaper currency, Puerto Rico cannot simply leave the U.S. Neither does it have the dubious “luxury” of filing for bankruptcy.
As a consequence of Puerto Rico’s financial woes, the society itself is also facing a crisis: as the island is running out of money and resources, so are its communities. The penury suffered by the island causes it to have infrastructural issues uncommon in the rest of the country. These issues include polluted water, teens and young adults who do not go to school, inadequate sewage system and the high teenager drop-out rate, which is at a staggering 18% while the overall national figure is around 9%.
Puerto Rico’s predicaments sound eerily like a microcosm of what is happening in many de-industrialized but globalized countries. Although it may be facing problems much more difficult to solve than the crisis-stricken countries of Europe or Detroit, they also all share many similar challenges. What, then, should be the territory’s solution? Would becoming the 51st state solve poverty in Puerto Rico, while many states on the mainland themselves are experiencing a similar—although at varying degrees of severity—circumstance? Should Puerto Rico—with an overwhelming majority consenting to officially become part of the U.S.—solve its socio-economic disarrays as an a priori sine qua non or should it hope that its prospective statehood would come to its salvation?
– Peewara Sapsuwan