Businesses are finding it more and more challenging to fill many open positions despite higher wages in Puerto Rico. A decreasing birth rate and significant migration to the US mainland have resulted in a decrease in the number of working-age people on the island, which has led to a decrease in the labor force (Rodríguez-Castro, 2023). Economist Heidie Calero notes that they need to convert roughly 20% of part-time jobs to full-time positions to increase labor participation. Governor Pedro Pierluisi claims that employment has risen above levels seen in 2009, attributing this to higher minimum wages and federal work incentives. However, Calero believes that the shifts in the labor market caused by COVID-19 have given workers more bargaining power, resulting in higher wages that aren’t necessarily matched by improved productivity (Hernández, 2022). The total number of paid employees as of the second quarter of 2023 was 931,718, an increase of more than 83,000 jobs from the beginning of 2021 (Newsroom, 2024). Because of their improvements, healthcare, retail trade, and hospitality sectors can depend heavily on their workforce.
Puerto Rico has experienced a decline in foreign trade recently. Exports decreased by 3.3% and imports by 2.4% between March and February of 2024. The economy has suffered as a result of these decreases. Reduced exports caused the economy to slow down, which raised unemployment. Furthermore, fewer imports may lead to higher living expenses and a worse standard of living for many residents (Benet, 2024). Because Puerto Rico is a territory of the United States rather than a foreign nation, their transactions do not incur tariffs or duties. Despite being a territory, Puerto Rico’s exports for the years 2022 and 2023 placed it 25th and 27th among U.S. entities, respectively, with the majority of its trade activities focused on exchanges with the states. The United States purchases 77% of Puerto Rico’s exports, with a smaller percentage going to Europe and Asia (pr51st, 2024). According to the Jones Act, shipment between U.S. ports has to be carried by ships that are mainly operated by citizens of the United States. It limits the movement of shipment between American ports to vessels that are built and operated in the United States. During a disaster, this restriction may cause the delivery of necessary supplies to be delivered much more slowly (Carey, 2017). Puerto Rico must look into ways to improve trade efficiency.
Fig 10: Dynamics of the Labor Market in Puerto Rico: A Journey Through the Last Decade.
