The median age in Puerto Rico is now 40 years, the highest ever since that information has been collected. The median age is the age which divides the population into two equal groups: half the people in Puerto Rico are under 40 and half are over.
Why does this matter? Simply, with more older people needing care and fewer younger people to care for them, Puerto Rico is looking at higher health costs and lower tax revenues. Puerto Rico has $46 billion dollars in unfunded pension liability already. They’ve increased worker contributions and raised the retirement age to try to keep this under control, but PROMESA requires that pensions be paid, so this cost is hanging over the Island.
With fewer younger workers paying into the system and more older people reaching retirement age, the problem will increase.
The main reason for the aging of Puerto Rico is the number of young families leaving the territory. Puerto Rico has more than $70 billion in debts that it cannot pay, and the money spent on debt service goes off the island. The government of Puerto Rico has put austerity measures in place, and PROMESA would allow (not require) the governor to lower the minimum wage for young workers.
As the quality of life decreases and opportunities for the future seem more limited, Puerto Rico’s young families and college graduates are moving to the States. Living in a State, they have more benefits and better job prospects — without the threat of lower wages or lost pensions.
There are now more Puerto Rican people living on the U.S. mainland than in Puerto Rico. Increased austerity measures will only push more people out of the territory. In general, it is younger working people who are leaving, along with their children.
The birth rate in Puerto Rico is also down. Uncertainty about the future and the threat of the Zika virus (which can cause birth defects if pregnant women contract it) have caused couples to think twice about starting families.
Fewer new babies, fewer graduates staying on the island, and more young families leaving — it’s a recipe for continued economic trouble.
Japan, the country with the oldest population in the world, now has a median age of 46.5. The United States as a whole has a median age of 37.8. Puerto Rico, with a median age of 40, is in the same category as Cuba and Romania.