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“Commonwealth” Party Leader: Lower Wages in Territory

The “commonwealth” party leader behind Governor Garcia Padilla’s proposal for Puerto Rico’s future political status has called for the territory’s exemption from the Federal minimum wage so that there can be lower salaries paid to Puerto Ricans.

Former Governor Rafael Hernandez Colon issued the call in a speech to the municipal assembly of the western Puerto Rico city of Mayaguez.

The former Governor also made two other proposals for U.S. congressional action.

  • One would exempt income that companies in the States attribute to manufacturing in the territory from taxes due from companies that manufacture in the States.
  •  The other would exempt shipping between the States and Puerto Rico from the laws that require the use of U.S. built, owned, flagged, and crewed vessels for transporting goods between U.S. ports.

Hernandez Colon argued for the exemptions on the grounds that the measures are needed to improve Puerto Rico’s underdeveloped and depressed economy. When told of the lower minimum wage proposal this week, a member of the U.S. House of Representatives asked how the proposed exemption would help the economies of the many workers in Puerto Rico currently paid at the minimum wage?

Millions of Puerto Ricans have moved to the States, many for more and better jobs. The rate has increased so much during the last decade that the population of the territory is shrinking. The rate of relocation has grown in recent years from about 100 a day to 1,000 per week to, last year, 3,000 a week.

Although Hernandez Colon identifies himself as a national Democrat and supported President Obama’s election, each of the proposals he made in his speech conflict with the positions of Obama and most Federal officials who are Democrats.

The corporate tax exemption and ocean freight shipping exemptions also are contrary to the views of leading Republicans in Congress.

The Federal government has rejected all of the proposals before. The tax and shipping exemptions have been repeatedly rejected.

Obama and national Democrats have made increasing the Federal minimum wage a priority.

The Republican-majority U.S. Senate turned away an amendment for a shipping laws exemption for the States of Alaska and Hawaii as well as for Puerto Rico on a bipartisan basis just a few weeks ago. A few years ago, President Obama’s Task Force on Puerto Rico’s Status even rebuffed “commonwealth” party lobbying for a study on exempting Puerto Rico.

The U.S. Government Accountability Office subsequently extensively researched the issue. Its findings did not substantiate the claim that shipping between the States and the territory on foreign vessels would be economically beneficial to Puerto Rico.

Federal tax reform proposals by leading congressional Republicans and Democrats have not included the tax exemption for corporate income from Puerto Rico that Hernandez Colon proposed despite lobbying by Governor Garcia Padilla. The exemption would also be incompatible with the tax reform plan outlined by President Obama last month.

In 1996, the Republican controlled Congress repealed the tax reductions for corporate income attributed to Puerto Rico that Hernandez Colon specifically proposed be replaced.

Although Hernandez Colon is one of four former “commonwealth” party presidents charged by its Governing Board with developing a new proposal for the territory’s ultimate status, he also declared that the “challenge” for improving Puerto Rico’s economy “is to not excessively channel our energies toward a change in political status.”

“Thinking that we are going to solve the [economic] crisis with a change of status is not real,” he added.

This assertion also contradicts the findings of Obama’s Puerto Rico Task Force and congressional leaders such as Senator Ron Wyden (OR), the senior Democrat on the Senate Finance Committee. They both have reported that resolving the question of the territory’s ultimate status is the most effective way to improve an economy that began to deteriorate nine years ago after lagging that of the States since the 1970s.

Puerto Rico’s status issue can be resolved by the territory becoming a U.S. State or a nation, either independent from or in an association with the U.S. that either nation could end.

Hernandez Colon himself included the corporate tax and shipping laws exemptions in Garcia Padilla’s proposal for an unprecedented “commonwealth status” for the territory. The “commonwealth” party’s Governing Board did not approval the proposal because a substantial minority of its members insisted on nationhood in an association with the U.S. instead.

The rejection led to the appointment of Hernandez Colon and three other former party presidents to a committee to develop a final new status proposal for the party six months ago. Hernandez Colon recently included the tax and shipping laws exemptions in a revised proposal.

The four party leaders, however, have not been able to come close to reaching an agreement yet.




1 thought on ““Commonwealth” Party Leader: Lower Wages in Territory”

  1. This RHC scumbag wants Puerto Rico to have sweatshops. They constantly laugh at the fact wages are less that 1/3 those of Mississippi and proudly claim it as a reason PR “Isn’t ready for statehood.”

    Meanwhile they continue to Bankrupt the Island to disqualify it from statehood.

    The “commonwealth” Populist democratic party seeks exclusion and econimic discrimination for Puerto Rico in order to benefit the corporate benefactors that support that filthy institution.

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