Jobs in Puerto Rico

Since Hurricane Mari hit Puerto Rico last September, the number of people working has increased each month.

This should be no surprise. In September, companies on the island were posting on Facebook, asking their workers to contact them to make sure that everyone was still alive. By October, according to the latest numbers from the Puerto Rico Labor Bureau, 15,300 people had gotten back to work.

Each month since then, the numbers of people working have increased as businesses on the Island have gotten their roofs repaired, their lights on, and their doors open. Most recently, the numbers for March were up by 1,600 compared with February.

Unemployment stands at 10.3 percent, an improvement over December’s 11 percent.

That’s the good news.

The bad news

Puerto Rico had 35,900 fewer jobs in March 2018 compared with March 2017. This reflects the fact that, while there are additional jobs in construction as the Island rebuilds, and hospitality and tourism are beginning to revive, many businesses closed their doors forever after the hurricanes.

Jobs have also been lost in education and health care. Manufacturing has held steady since October, apart from a brief dip in December. Financial services also has shown no recovery of jobs.

The job participation rate stands at 40.1 percent, a .1 percent increase. And the 10.3 percent unemployment rate is an improvement over last year’s 11 per cent rate, but neither of these numbers can really be considered good news.

The unemployment rate for the U.S. as a whole is 4.1 percent. The labor participation rate for the U.S. as a whole is 62.9 percent.

Understanding the unemployment rate

Individual states vary. For example, Hawaii’s unemployment rate is 2.1 percent. 2 percent is considered full employment. That is, economists figure that there will always be about 3 percent of the working-age population choosing not to work. These individuals may have chosen early retirement, they may be in school, or they may be staying at home with their children.

This means, in theory, that there are workers in Hawaii who hold jobs that they don’t want or need.

Alaska, at the other end of the spectrum, has an unemployment rate of 7.3 percent. This means that there are workers there who have no jobs, even though they want and need to work.

Puerto Rico’s unemployment rate has been higher than the current 10.3 percent. However, one reason for the drop almost certainly is the large number of working-age people who have left the Island.

There are also people living in towns which still do not have electricity or passable roads. These people may not have jobs, but they may also not be considered unemployed. People are only counted as unemployed if they are looking for jobs. Individuals who cannot find work because the business in their towns have not been able to reopen will not be counted as unemployed.

Understanding labor force participation

Labor force participation is a measure of the number of people who are working or actively looking for work: the employed and the unemployed. This number has been as high as 67 percent in the United States as a whole, and is now at 62.9 percent.

This number doesn’t include people on active duty in the military, prisoners, retired people, those who are disabled and cannot work, students, or people who work at home without pay, such as housewives. It does include people working on a family farm and those working without pay in a family business, if they work for 15 hours a week or more. Fewer than half of the residents of Puerto Rico are currently working or actively looking for work.

One reason is Puerto Rico’s aging population. Many workers have already left Puerto Rico for the States, and more continue to do so.

An increase in jobs in Puerto Rico is certainly good news. Improvements in the unemployment rate and the labor force participation rates are also good news. These metrics have for years been much worse in Puerto Rico than in any of the 50 states. They still are.

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