Hawaii and Puerto Rico: Different Paths, Different Economies

The Republican Party Platform of 1940 considered two territories: Hawaii and Puerto Rico.

Hawaii
Hawaii, sharing the nation’s obligations equally with the several States, is entitled to the fullest measure of home rule; and to equality with the several States in the rights of her citizens and in the application of our national laws.

Puerto Rico
Statehood is a logical aspiration of the people of Puerto Rico who were made citizens of the United States by Congress in 1917; legislation affecting Puerto Rico, in so far as feasible, should be in harmony with the realization of that aspiration.

The two statements are not identical. Puerto Rico is specifically identified as a logical candidate for statehood, while Hawaii was identified as deserving of equality and home rule.

However, it was Hawaii that became a state in 1959, and Puerto Rico continues to be a territory.

How have the islands done since then?

Wages

In 1940, Puerto Rico had 25 cents an hour as the minimum wage. Hawaii also set its minimum wage at twenty five cents in 1942. The federal minimum wage was also 25 cents in 1938, but it rose to 30 cents by 1939. The State of Hawaii’s first minimum wage requirement following statehood was $1.00.

Now, Hawaii’s minimum wage is $7.75, and it will be $10.10 in 2018. Puerto Rico’s minimum wage for employees is generally dictated by the Federal Fair Labor Standards Act (FLSA), which is currently $7.25/hour, with no increases pending.

Economic growth

In Hawaii, real income per capita rose 21% from 1948 to 1958, and by 52% between 1958 to 1968, according to Robert Schmidt. According to economist Thomas Hitch, Hawaii’s tourism industry increased 15 fold following statehood, and outside investment was stimulated by statehood to a degree that he would have expected to take “a generation or two” to accomplish. By the 1970s, growth had slowed to match the rest of the U.S. and now Hawaii’s annual economic growth is a stable 3%. Per capita income was $44,442 in 2012.  (For additional data about Hawaii’s economy since statehood, see our previous post.)

The annual growth rate in Puerto Rico reached an all time high of 13.80% in 1971 and a record low of -3.80 % in 2009. The “growth rate” was actually negative in 2007, 2008, 2009, 2010, 2011, and 2013. Per capita income is now $23,840, according to the World Bank. Puerto Rico is now suffering under a load of debt greater than that of any state, and is seeing bank failures, junk ratings for its bonds, and a variety of other economic woes.

Federal support

Hawaii received $10,671,056,309 from the federal government in 2014. With a population of 1.42 million, this comes to $7,514 per person.

Puerto Rico received $21,303,425,932. With a population of about $3.54 million, this comes to $6,017 per person. That is, though Puerto Rico’s need is apparently greater than that of Hawaii, Puerto Rico receives less in federal funds.

Self determination

Residents of Hawaii can vote in presidential elections.  They are represented by two U.S. Senators and two Representatives in Congress. Residents of Puerto Rico cannot vote for President.  They have no Senators.  Their representation in the government that makes the federal laws that they must abide by consists of a single Resident Commissioner who cannot cast a vote on final passage of any bill considered by the U.S. Congress.

 

8 Comments

Javier

Puerto Rico should not aspire to be a state like Hawaii. First, today, the Hawaiian people are 9% of the population, minorities in their own country. I do not want Puerto Ricans to be a minority in PR.

Second, Hawaiians that did not speak English were not allowed to vote in the referendum, but any new American resident and visiting navy sailor could vote. That’s ‘democracy’ for you. Amazing that statehood supporters either omit that info or do not know it. Thank you

Chris

Native Hawaiians became a minority long before 1959 … they became a minority when Hawaii was still a Polynesian kingdom.

You cannot compare Hawaii to Puerto Rico … it’s two very different set of circumstances. It’s highly unlikely that millions upon millions of Enlish speaking people from the mainland will move to Puerto Rico and come to outnumber the native population. It’s impossible, the “oh noes they will get rid of our culture” is a tired cliche trotted out by the colonialist establishment in a desperate attempt defend the failed status quo.

“Puerto Ricanness” is in NO WAY threatened by equality under the American flag. Come 2042 almost 40% of Americans will be Hispanic.

Zealot 51

The “Puerto Rico Report” is WRONG: Hawaii did NOT become a U.S. State in 1958; Hawaii became State #50 on 21AUG1959. Attention to detail is crucial for any medium that aspires to being deemed credible!

Jeff Boyd

Wonder why Puerto Rico tourism has never risen to the same level as Hawaii?

One objection to the economic contribution from Federal government that I would raise is that the people of Hawaii never campaigned to have military bases removed from the island. Wonder how much was lost Vieques and other posts were closed following the protests?

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