U.S. Workers and Puerto Rico's Crisis
Publisher: Against the Current
Date Written: 01/11/2015
Year Published: 2015
Resource Type: Article
Cx Number: CX21294
Puerto Rico has been in the news lately, particularly the financial news. The possibility that its government may default on part of its $73 billion public debt has drawn the attention of Wall Street analysts.
Through the different epochs into which we may divide Puerto Rico's development since the onset of U.S. rule in 1898 some features have remained constant.
First, since 1900 Puerto Rico's economy has been shaped by the priorities and preferences of U.S. capital. Such was the case before WWII, when sugar production was the main industry, during the expansion of light-manufacturing from the 1940s to the 1970s, and during the following period, characterized by capital intensive manufacturing (pharmaceuticals, for example).
While specializing in the production for export, largely controlled by U.S. capital, the island has imported most of the consumer goods needed for its reproduction. This one-sidedness is the distinctive second feature of Puerto Rico's colonial economy. An example of this is the destruction of Puerto Rico's agriculture, to the point that we now import more than 85% of our food.
Third, an additional consequence of the domination of Puerto Rico's economy by U.S. capital has been the constant outflow of a significant portion of the income generated in Puerto Rico. At present, around $35 billion leave every year, in the form of payments to external investors. This is around 35% of Puerto Rico's Gross Domestic Product.
Needless to say, this capital is not reinvested in Puerto Rico, leading to a fourth feature of its economy since 1898: Puerto Rico's dependent economy has never been able to provide sufficient employment for its workforce.