A demonstrator holds a sign that reads "Zero layoffs" in Spanish during a protest last month in San Juan, Puerto Rico. Thousands of protesters gathered in the island's financial hub in a rally against Gov. Luis Fortuno and the proposed layoffs of public employees.
(Andres Leighton/AP)Photos (1 of 1)
Big winner on economic stimulus and jobs is … Puerto Rico?
The island territory has been able to add a high number of new jobs per capita. But the stimulus comes at a time of political struggle between public and private labor in Puerto Rico.
By Patrik Jonsson | Staff writer/ October 31, 2009 edition
Atlanta
Not having a voting member of Congress doesn’t seem to have hurt Puerto Rico in its quest for jobs and economic recovery.
In the middle of a four-year-long recession, the self-governing US territory has managed to add 17,000 new jobs for a grand total of over 4,000 per million residents, putting the Puerto Rico third behind Washington and Montana in jobs created by the federal stimulus bill, according to a Monitor analysis of new stimulus figures released by the White House.
President Obama on Saturday morning pointed to the success of the $787 billion stimulus program, saying it has “saved or created” about 1 million jobs from Alaska to, well, Puerto Rico.
“As I’ve said many times, it took years to dig our way into the crisis we’ve faced. It will take more than a few months to dig our way out. But make no mistake: that’s exactly what we will do,” the president said in his weekly radio address.
To be sure, the success of Puerto Rico’s stimulus effort backs up the White House’s promises of fairness and lack of political patronage in doling out grants. But beyond the macro-economic news, the figures also shed some insight into the package’s transformative powers and how the Puerto Rico model could well test Washington’s ability to fundamentally change and improve local, state, and regional economies.
In many cases, state-by-state stimulus job creation has been driven by specific circumstances, such as the cleanup of a decommissioned nuclear power plant driving job creation in Washington State.
In Puerto Rico, school bathroom repairs, road rebuilding, and public housing renovation are among the key job-drivers.
But more critically, the stimulus is playing heavily into the push by Gov. Luis Fortuno to reverse the island’s poor economic fortunes and chart a new economic future, including hopes of creating 200,000 new jobs by 2013. Part of the plan is to use stimulus funds to pare down a bloated public work force and focus on private-sector job-creation.
But after anti-privatization protests on Oct. 15 where protesters wore masks of Fortuno’s face while brandishing fistfuls of money, union leaders say it’s becoming clear that the stimulus money has become a political pawn used to lay off public employees. It’s an issue they plan to raise with the Obama administration .
“The government is betting that the reduced spending, combined with $6.5 billion in combined federal and local stimulus funds, will be enough to get the territory back on solid footing,” CNN reports.
Consistent with Obama’s cautious message this morning, job losses will likely continue near-term in Puerto Rico, and it’s far from clear whether the nearly 17 percent unemployment will come down substantially as the shakeout of the public payroll continues. Coming on the heels of 7,000 public sector workers laid off in March, another 10,000 government employees will lose their jobs by January, nearly erasing job gains from the stimulus.
The US territory is entering its fourth year of recession with a $3.6 billion deficit — the largest per capita in the US, putting its credit rating at nearly junk bond status.
Puerto Rico originally asked for nearly $22 billion in stimulus funds for projects. That’s been whittled down to $6.5 billion, $2 billion of which has been spent so far. While the territory’s job gain is 115 percent higher than the national average, they’ve come at a relative bargain: Puerto Rico is spending $490 per person compared to a national state average of about $516.
So how has Puerto Rico done so well for itself? There’s little doubt that, despite its lack of representation, politics has played at least some role.
For example, powerful Rep. Charlie Rangel (D) of New York, chairman of the House Ways and Means Committee, reminded Americans of Puerto Rico’s importance when announcing that the island’s US citizens would get tax breaks like all other Americans from the stimulus package.
“Both compassion and economics obligates us to remember the ties that bind the United States with Puerto Rico and our territories,” said Mr. Rangel in a press release earlier this year. “The key to this recovery — short-term and long-term — rests on how well we can work together to stimulate all aspects of our economy.”
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Comments
3. Carlos Alberto Velazquez | 11.01.09
As a former candidate for Puerto Rico´s Congressional position in the 2008 election cycle, it is interesting to read about the success of Puerto Rico in creating jobs in the past couple of months, when the unemployment numbers have indeed increased over the same time frame. What the article implies, but does not explicitly tell us is that the jobs that have been created: road repairs, public housing renovation, and school bathroom repair are at best temporary employement that will not improve consumer confidence, bolster personal savings, and cause private investment. Those components, added to an investment in social infrastructure, environmental reconstruction, and a marked shift towards renewable sources of energy is what could possibly move my island towards strong economic self sufficiency and a sustained recovery.
4. Carlos Gonzalez | 11.02.09
I would suggest a more thorough fact check, as Puerto Rico has not created anywhere near 17,000 jobs. That figure probably comes from an announcement by the governor saying that the island could employ 17,000 workers (roughly the same amount of public servants that will be laid off in a week) picking coffee in the mountains. There is a lot of misinformation floating around about Puerto Rico’s actual job market, mainly due to an utter lack of proper statistics.
5. kirk@nextcoastmedia.com | 11.02.09
Increased trade and offshoring by US companies is a contributing factor in the stabilization of Latam/ Caribbean economies. http://www.nearshoreamericas.com
6. tired66 | 11.02.09
bull Pucky ,Big business got the money and no jobs to the little guy.How about putting the money in the 50 states instead of territories that already get millions every month from the states under things like maintaining roads, , that are terrible but monies go to the relatives of the politicians every month instead like they do in St Thomas too.
7. ranter22 | 11.02.09
It does not matter what issue is presented when discussing any of Puerto Rico’s affairs.
The way the stories are written, the unsaid and implied contempt for the people of this island by so many says a lot more than the text. It is such a simple matter to just abstain from unbiased rhetoric, but so many can’t resist that.
The simple fact remains that Puerto Rico is a paradise island, whether rich or poor, and if The US doesn’t want to contribute equally with it’s own citizens, though they be miles away, then by all means say so. And while you are at it go vacation in Afghanistan, Iraq, Cuba or Mexico.
You do not want to embrace the Puerto Rican people? It is up to you. You no longer want the Island, then give it back to Spain. There are no slaves there whether Physical or political. We are either with one country or with another in this process. No one is obligated to do anything, not even the USA. But please tone down your tempo on this American region.
8. Elle | 11.02.09
Being from Puerto Rico, and reading this, does make me want to laugh. The island is at the worst it has ever been, and even though I am hugely patriotic about my home, I will admit that things are not going well there right now. This could be an attempt by the government to “control” the people, so everyone can have some kind of hope for a better future. But even it was, it all cancels out: 17,000 new jobs…17,000 workers laid off, and it’s going to keep rising, unfortunately.
Such a beautiful island, with its main financial income coming from tourism… so much they can do, but it comes down to the chicken and egg questions. Like Obama said, and encourage once, consumer spending is what drives the economy, and it is what will bring it back; but if there are no jobs, then there is no consumer spending; but if there are jobs, then the government just goes deeper and deeper into dept. They though that by implementing tax sales (IVU) at 7.2% (I believe) that it would help the government with its debt crisis, but yet again, the questions of consumer spending arises… though if you go to Plaza Las Americas (the biggest mall in Caribbean, in San Juan), you’d think “what recession…?” people spend like crazy, but where is that money going?
Even though it sells itself as great news, it’s just null. They government hasn’t done much of anything for the people (for the last 16 years or so), that’s why tensions are at an all time high, and the crime rate is rising.
There are so many resources around the world the government can use; renewable energy is probably the number one resource they should seriously consider. But firing employees is simply going to hurt them, than help them.
10. Angel | 11.02.09
¡OH GOD, PUERTO RICAN GOVERNMENT IS LYING TO MR. OBAMA’S ADMINISTRATION AND TO THE WORLD!THESE ARE FUNNY STATISTICS USED TO PUT A MASK ON THE ECONOMIC AND GOVERNMENT DISASTER WE ARE EXPERIENCING RIGHT NOW.
11. Jose | 11.03.09
I’m not sure from where the writer got his information, but I think he has it backwards. Puerto Rico is laying off 17,000 jobs not creating them. Puerto Rico has been on a recesion well over four years now, and it just keep getting worst. I will not critizise the current administration, even if I don’t agree with the current policy, because it is taking a different aproach to the Island Economic Situation from the previous two administrations, where the current resecion started.
12. cher | 11.04.09
I recently returned from a business trip to the island nation and my experience shows me that the writer mixed up the numbers leading to an inaccurate portrayal of the situation. The firing of thousands of individuals is in addition to the thousands previously let go. That there are no jobs for these folks is revealed in that many are being offered 5K to move to the US stateside in order to find jobs.
13. C. Martinez | 11.04.09
I do not know where the Christian Science Monitor came up with the seventeen thousand jobs created in Puerto Rico from the Economic Stimulus law, but they are WRONG.
El Nuevo Dia newspaper in San Juan reported (from PR goverment sources) that less than a thousand jobs had been created from the stimulus funds. At the same time, the goverment just anounced seventeen thousand civil servants will be be layed off in November.
In addttion, Puerto Rico received a much lower dollar amount per capita than any of the States. The same goes for the other “territories”.
14. GeorgeRafael | 11.04.09
Wow. If there were 17K jobs created I never knew it.
(END Sarcasm)
Mr. Jonsson apparently either does not have a journalism degree or he got it from some crappy online program.
Mr. Jonsson, how about double-checking your sources??
Everybody who lives in PR (or lived, since I had to move to the Continental USA) knows this job creation data is false. There is NO JOB CREATION IN PR. NONE.
I was 24/7 seeking any form of employment in PR and these phantom jobs were never ever made public at all. If these jobs were real, I would have applied on the spot.
So please, Mr. Jonsson, be a professional next time and don’t just take some info given by biased sources and publish it without research or double-checking.
15. T.R. Pevey | 11.06.09
Any time Puerto Rico recieves funds from the Federal Government, Puerto Rico is a big winner regardless of what the money is for.
Puerto Rico residents pay no federal income taxes, but yet it gets more annual federal funding than the state of Mississippi. These funds are from fenderal income taxes collected from the rest of the the US Citizens (at least those from the 50 states, I am not sure about residents of the USVI, Guam, or Sol. Islands). Bottom line, Puerto Ricans win and the bulk of American’s lose.
Lets hear it for Puerto Rican Independence!!!
16. Sra. Rosado | 11.06.09
Es increible tanta mentira junta. A quien le pagaron para que escribiera tanto disparate. De cuando aca se puede estimular la economia concentrandose en beneficiar los grandes intereses. De cuando aca se puede ayudar a un pueblo cuando los politicos le roban al pueblo y se hacen cada vez mas ricos. Que tipo de sensibilidad puede haber don de un gobernador pueda ser tan arrogante con una “primera dama” que ni siquiera ha hablado en apoyo de ninguna de las madres y cabezas de familia que han sido despedidos sin justa causa. Todo con la excusa de que estan despidiendo empleados nombrados por la administración pasada, entonces porque despiden a personas con 13 años de servicio o menos, no entiendo, personas que llevan ya casi la mitad de su jornada laboral. NI UNA MENTIRA MAS! ! !
17. Roberto Lopez | 11.07.09
Just guessing but the confusion may be a result of the fact that the Obama administration counts jobs “saved” in its figures. Since PR is using stimulus funds to pay for recurrent government expenses this year, it may have calculated that, were it not for stimulus funds, it would have had to layoff 34000 workers instead of 17000. It should also be pointed out that salaries being much lower in PR than in any state, lower funding to PR (acknowledged in the article) can account for a higher number of jobs.
I don’t discount the article’s slant towards making it appear that PR has taken unfair advantage of the stimulus when such is not the case which brings up the question whether my suggested explanation was a conscious “confusion” on the writer’s part or not. Contrary to what some of the commentators have said, the facts about PR’s economic reality are in the article although the lead paragraph will be the story the typical reader will retain and is the focus of the comments. One has to do a lot of reading between the lines here. Given the fact that PR has little to no political power in Washington, it is ludicrous to argue that politics is playing a part.
As to the strikes against the government and some of the comments here, it seems to me be an extreme overreaction. Given the fact that PR has been in recession for four years, that 120,000 private sector jobs have been lost in that period, we have been living the economic tragedy for a long time now. But people do not seem to want to face reality. The government does not create wealth. It is the private sector that creates wealth. If the private sector does not do well, as has been happening for a while, the government does not have the resources to provide the level of services that we would like. That is just a fact. As much as we would like for the government to provide jobs for everybody, that will not happen unless there is a strong private sector. So what we should be talking about is how to improve private sector development but that is what we never talk about. Instead we blame the government and “big business” for all our ills. The present government did not create our economic hardships. Driving out “big business” will only make our problems much worse. No doubt we have to regulate the private sector to make sure it doesn’t commit abuses, but that is a far cry from the denouncement of “big business” one is hearing from the antigovernment demonstrators these days.
Many people in PR do not seem to want to face the reality that, if our economy has done so badly during the last four years, this will necessarily have an effect on government services. Unfortunately, we cannot print money and continue to run up huge deficits as can be done by the Federal government. We are close to the point of our bonds having junk status and, if that happens, the effect on the government will be ten times worse than the current job losses.
With regards to the comment that PR gets Federal funds and pays no income taxes, several things should be pointed out:
(1) Puerto Ricans pay the Social Security and Medicare tax at the same rates as the US yet receive Medicaid and Medicare aid at lower rates.
(2) Puerto Ricans do not receive the “income credit” otherwise known as negative income tax that is received by millions of Americans.
(3) PR gets LESS Federal funds per capita than any state because the US legistlature imposes caps without there being PR voting representation in Congress.
(4) Not everything life can be measured in dollars and cents. Puerto Ricans have fought in US wars in a HIGHER PROPORTION than any other group.
(5) Puerto Ricans cannot vote for any of the officials in Congress or the White House who make the decisions that affect us daily.
(6) If you do not like PR’s present situation, I would think you would advocate statehood rather than independence. Under statehood, PR would pay income tax that so much worries you. Under independence, millions of the US citizens of Puerto Rico would decide to move to the mainland having a massive impact.
Finally, some of the commentators should take the advice to check their sources. To clarify some misstatements,
(1) Tourism is not PR’s main industry. It is the pharmaceutical industry. (2) Puerto Ricans are not being given $5K to move to the mainland.
18. Juan | 11.07.09
Simple math. US pumps in billions into PR and Subtracts 20 times what it puts in equals land raping.. Own a country’s debt and you own The country and it’s people!!! Mean while PR is indebt because of The US. My ??’s is what are the people willing to do? Then you wonder why people like Pedro Albizu Campos are born!!
19. Roberto Lopez | 11.11.09
The way for economic development is for people to work together for mutual benefit. This is particularly necessary for a small island. PR’s relationship with the US has been beneficial for both. You just have to be objective when you look at the data. Compare PR’s standard of living to the Latin American countries that have not had that relationship. And what do you think PR’s conditions would be if the 4 million Puerto Ricans presently living in the States had been forced to remain on the island? Do you really think PR would be better off by relying on relationships with other nations? Which would you suggest? The Spain that colonized us for 400 years? Hugo Chavez’ Venezuela? Cuba with its tiny economy? If that is really what we want, all we have to do is vote for it in the next plebiscite. But I imagine that what Juan is asking is whether a small group of Puerto Ricans (following Albizu’s example) is willing to resort to violence to force their desire on the majority. I guess we shall see. I doubt it. I hope not.
I certainly would prefer independence to our present undignified political status but I do not want it imposed on us and I do believe statehood is the preferred option. Status for me is above all a question of political rights which we do not presently have. Economics is a secondary issue. Statehood does not automatically improve our economy but it does give us a better chance than independence.
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1. Sandra | 10.31.09
Today i was reading a newspaper from Puerto Rico that laughs out loud at the news that Puerto Rico is a winner when the present puerto rican government is laying off 17,000 employees from the public sector in addition to 6,000 already fired early in the year with a 16% unemployment rate that is supposed to go up even higher by the end of the year and a crime rate that is breaking all records this present year. A winner? This is a joke, Puerto Rico is in the worst crisis of it’s history. The biggest strike in decades happened a couple of weeks ago when 200,000 puerto ricasn took the street against the privatization plans and the massive lay offs conducted by the head of government Luis Fortuño. Even the biggest mall in the caribbean, located in San Juan closed that day.