Beyond relief, PR needs a path to prosperity. - nm Posted: Oct 1st, 2017 - 4:24 am In Reply to: Trump on Puerto Rico - Would he just quit talking...pls
Even before Hurricane Maria devastated Puerto Rico, the island was in big trouble. So while the federal government will surely shell out billions to help rebuild, national and local leaders need to grapple with the larger issue of long-term stability.
One in 10 Puerto Ricans moved away in the decade before Maria hit. The government was in receivership, having run up debts far beyond its ability to repay.
Badly neglected maintenance is a major reason the electrical grid is entirely down: The also-bankrupt, publicly owned power company had devoted too many resources to keeping people employed at the expense of getting its core work done.
And the island’s medical system depends on special subsidies from Washington that soon expire.
Gov. Ricardo Rosselló, a reformer looking to clean up the government and win US statehood for the island, only took office in January. Now he has to not only manage the immediate crisis but lead the way in ensuring that Puerto Rico has any real future.
Notably, some mainlanders are now obsessing about ensuring that Puerto Rico’s power system be more green when it’s rebuilt, when the urgent need is plainly to make it more storm-resistant.
Of course, outsiders often miss key issues. Last week began with lots of noise on the mainland about the need to suspend the Jones Act so that non-US-flagged ships could deliver relief shipments.
As it happened, President Trump agreed to suspend the act right after Rosselló requested it. But then it turned out that cargo has piled up on the San Juan docks because so many roads are out and so few truck drivers are available.
There’s a good case for exempting Puerto Rico permanently: The Jones Act restrictions clearly hit the island commonwealth harder than the mainland.
But that’s not the only law to look at. Back in the 1970s, Congress decided to impose the federal minimum wage on Puerto Rico, though average wages are far lower there. A later National Bureau of Economic Research analysis found the change “substantially reduced employment on the island,” prompting mass migration of lower-skilled workers to the mainland.
On the flip side, Congress in the ’90s ended most of the tax preferences that had attracted pharmaceutical companies to the island. Now it’s an open question whether Big Pharma will rebuild its remaining plants there post-Maria, or shift the work to Ireland. Some incentives to preserve those jobs for Americans may be in order.
Then, too, a comprehensive recovery plan must consider the work of the bipartisan Congressional Task Force on Economic Growth in Puerto Rico, which noted a host of perverse ways federal law applies to the island — usually because it’s at most an afterthought to most lawmakers.
We’re sure the president, on his coming visit, will commit to a better future for the 3.5 million American citizens living in Puerto Rico and the US Virgin Islands. The rest of Washington needs to wake up to the fact that fostering long-term prosperity is about more than just writing checks.
LINK/URL: Beyond relief, PR needs a path to prosperity.
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