As you may already be aware, America's colonial possession Puerto Rico is in a downward spiral toward sovereign debt default. The vicious cycle has growing debt as one of its causes.
"The economy is in a vicious cycle, where unsustainable public finances are feeding into uncertainty and low growth, which in turn is raising the fiscal deficit and the debt ratio," the report says.
But the growing debt is not the only cause or even main cause of the weak economic growth. Another cause (or two): Puerto Rico also has a horrible school system. Really, not just lower ability students.
But wait. There's more (and appropriately reported in Foreign Policy): Puerto Rico Has the Same Problem as Greece: Its People Donít Want Reform. We can't help people who do not want to change. I've got enough personal experiences with this problem that I know this one well. Adoption of the US federal minimum wage is part of the problem:
The same thing is happening in Puerto Rico, except the controversy surrounds the issue of the minimum wage. It has the same pay floor as the rest of the United States ó $7.25 per hour. But unlike the United States as a whole, where this amounts to about 28 percent of the $49,803 per capita income, the minimum wage in Puerto Rico amounts to about 77 percent of the per capita income of $23,840.
But the unemployed in Puerto Rico don't want to admit their labor isn't even worth $7 per hour. That labor is worth so little for multiple reasons and those reasons are going to grow worse with time. This can't be turned around. The Democrats are going to be tempted to increase colonial office aid to Puerto Rico. I say no. Set them free.
Obviously Puerto Rico needs its own currency, its own central bank, and sovereignty. They need all the powers of a sovereign state so they can at least tackle some of the root causes of their problems.
|Share |||By Randall Parker at 2015 July 05 08:21 PM|