The Puerto Rico Economic Development Bank reported an increase of 3.3% year over year for August. That means that there have been six months of year-over-year improvements. Month over month there was a small gain, for the second month in a row.
Federal funds have made it possible for Puerto Rico to invest in the infrastructure, creating jobs. Unemployment has fallen to 8% — which is still nearly twice the rate for the U.S. as a whole — and household income has increased.
Tourism is on the mend. While it is currently providing just 5% of the Island’s income, compared with 7% in 2019, Puerto Rico’s tourism industry is recovering from the pandemic shut downs faster than the rest of the country, according to the U.S. Travel Association.
If the Build Back Better Bill passes in Congress, Puerto Rico will receive significant support for families. The poverty rate could fall by 7 points, economists estimate, and the proposed improvements in housing, healthcare, nutrition, and education could strengthen families, get more parents back into the workforce, and prepare the next generation for better employment in the future.
Temporary improvements?
As a territory, Puerto Rico is under the plenary power of Congress. The current Congress cannot obligate a future Congress, and any benefits Congress awards Puerto Rico today can be taken away again tomorrow.
This is one of the most important reasons Puerto Rico needs to become a state. Any agreement made with Congress now can be changed at any time. So the current plan to provide Child Care Tax Credits for Puerto Rico and to fund Medicaid as if Puerto Rico were a state can be very helpful for Puerto Rican families in the short term.
However, the next Congress may decide to return to the old funding formulas and to remove the tax credit.
As a state, Puerto Rico will be treated like all the other states.
In any case, it is essential that Puerto Rico look toward the future. Federal funds providing jobs to rebuild the infrastructure will not continue beyond the period of rebuilding. However, they could provide a foundation for building new businesses and increasing investments.
As a state, Puerto Rico will have the stability to draw businesses to invest more heavily in the Island’s economy. E try territory which has become a state has seen this kind of investment skyrocket.
With that level playing field, Puerto Rico’s advantages for business — including a skilled, educated bilingual workforce — will be able to come to the fore.
Puerto Rico should also take advantage of the opportunity to build a foundation for future employment through education and improved healthcare for the rising generation.
With these good choices, Puerto Rico can see lasting improvement arising from the current temporary benefits.
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