While the jobless rate in the United States has dropped to 4.9%, it is 12.2% (based on December numbers) in Puerto Rico, which is worse than it was in America at the depths of the Great Recession. As governments and financiers look for resolutions for the Puerto Rican debt problem, the job situation cannot be dodged. Consumption and tax issues have been undermined by raging unemployment.
The jobs rate has not gotten much better in a year. The December 2014 jobless rate was 13.7%. Over the course of the year, an average of 150,000 people have been out of work. The island’s civilian labor force numbers 1.14 million.
It would be simplistic to say that the jobless rate is the only reason for Puerto Rico’s problem, particularly as measured by the $73 billion in debt, as the portion due now may go unpaid.
The Washington Post said about Puerto Rico’s debt problem:
While Puerto Rico’s government should certainly share the blame, this approach ignores an important contributor to the commonwealth’s problems: the United States government’s economic and tax policies and the island’s status as a colony. Being neither an independent country nor a state constrains the Puerto Rican government’s economic development policy options.
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Regardless of the economic and debt problem, one thing is certain. Puerto Rico cannot tax people without jobs. The explanation for one of the most vexing problems seems too uncomplicated, but it is true.
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