Puerto Rico’s economic activity index was up 0.3% in December but employment slipped 1% compared to November.
Puerto Rico employment had gone down month-to-month for two consecutive months, according the household survey data from the U.S. Bureau of Labor Statistics.
Puerto Rico’s private sector employment was down 10% in December from a year earlier, compared to a 6.2% slide in the United States as a whole. These are from the bureau’s Current Employment Statistics, which surveys employers.
Puerto Rico’s economy has a structural problem, said Gustavo Veléz, chairman of Inteligencia Económica. Politicians refuse to implement structural reforms that would help the economy, he said.
In the context of the structural problem and the successive hits from the Financial Crisis, 2017 hurricanes, earthquakes, and now COVID-19, Puerto Rico’s economy has lost more jobs than that of the mainland, Veléz said.
“First, the U.S. was impacted by the COVID-19 pandemic while in the midst of the longest economic expansion in its history, while the Puerto Rican economy was impacted by COVID amid a secular decline in economic activity that has barely relented since FY2007," said Sergio Marxuach, public policy director at Center for a New Economy.
Puerto Rico lost relatively more jobs than the United States in the retail, travel, entertainment, and leisure sectors, all of which depend on a high-level of person-to-person contact and, in general, cannot be provided on-line, Marxuach said.
“Finally, structural unemployment in Puerto Rico traditionally has been higher than in the U.S," he said.
The Puerto Rican economy has been unable to generate sufficient jobs for the working age population for decades.
"This results in a steady stream of outmigration to the U.S. along with an official unemployment rate that has been close to or above 10% even during years of growth," Marxuach said.
“The Puerto Rican economy’s already anemic condition prior to the pandemic; its relative over-reliance on low-skill, person-to-person service jobs; and a historically weak labor market, all imply the post-pandemic recovery will be slower in the island than in the U.S.,” Marxuach added.
The economic activity index, compiled by the Economic Development Bank for Puerto Rico, was down 6.4% in December from December 2019.
The index is based on four island economic statistics: non-farm employment, electrical consumption, gasoline consumption, and cement purchases. The first two went down and the latter two went up from November to December. From December 2019 to December 2020 all but cement purchases declined. During that period cement purchases increased by 28.4%.
