Puerto Rico's Job Market
Still in the Eye of a Hurricane
The outgoing Governor of Puerto Rico, Ricardo Rossello, who will leave office this Friday, has resigned in the wake of leaked group chats detailing crude and profane conversations, as well as allegations of widespread fraud and corruption. Puerto Rico's government has been suspected of corruptions for many years, as well as mismanagement and nepotism.
What most have seen as the final blow was a pair of hurricanes that devastated the island in 2018. In light of all this, how is it that the island's unemployment rate has gone down to a fifty-year low of 9.3% in June, and continued that decline in July to hit 9.1% (according to the Bureau of Labor Statistics (BLS)?
As reported by Zip Recruiter, the falling unemployment numbers actually paint a very bleak picture. Even before the hurricanes, in the last two quarters of 2017, the number of available jobs was declining, while the number of people looking for jobs had increased by 63%. The spike in applicants brought the ratio of jobs to applicants from one for every six job seekers to one for every 15, which is where it has remained through July of this year. Meanwhile, in the continental U.S., there are more jobs that need to filled than there are applicants.
So why is the Puerto Rico unemployment rate falling? Because not only have -people stopped looking for jobs (Job seekers in the first half of 2018 dropped 40% compared to the previous period and saw more than a 100% decline compared to the first six months of 2017), but people are leaving the island in droves . Even before the hurricane, Puerto Rico lost 100,000 people from July 2016 to July, 2017. A report by Hunter College's Center for Puerto Rican Studies calculates that 135,000 more people left the island in the six months following Hurricane Maria.
If you open a newspaper in Puerto Rico, you will find many jobs advertised that offer "competitive compensation," health insurance, life insurance, tuition assistance, a 401(k), free meals and a $1,000 bonus, in two installments, if you stick with it a year." But - these jobs are not in Puerto Rico. There're in places like Cincinnati, Pennsylvania, New Jersey, Rhode Island, and other off-island locals.
"As long as we keep losing our human capital, the teachers, police, health care professionals, it's going to hurt the possibility of a sustainable economic recovery," says Gustavo Velez, president at CEO of Inteligencia Economica Inc."It's a Catch-22 situation," with people leaving because of the economy and damage, making it even harder for Puerto Rico to repair itself structurally and financially, Velez says.
Closer to home, what does this mean for the North East U.S.? It leaves employers here with a tough choice. If you are seeking talented employees, Puerto Rico is a good place to look for them. However, by doing so, you may very well be contributing to the ongoing mess that is Puerto Rico, and delaying their recovery.
Next week, we will examine the questions should my business invest in Puerto Rico?