4 Sad Puerto Rico Poverty Rate Statistics and Facts

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Since 2011, Puerto Rico’s economy has stopped growing, resulting in massive debts, high unemployment rate, a declining real estate market, and poverty all around. There have been attempts to turn things around, but all efforts have failed, and things aren’t looking up.

Puerto Rico’s tourism, which had been a rare bright spot for the American territory, is also at risk due to the outbreak of the Zika virus. Who wants to risk their health for a promise of a good holiday?

Clearly, Puerto Rico is in serious trouble, and its citizens have become impoverished. It doesn’t take a genius to figure out why poverty is at an all-time high in this country. What is hard to accept is the fact that an improved economy may remain a far-fetched idea for the next decade.

All Roads Lead To Poverty

There are many factors that led to the poverty rate of 45%, which is quite high for such a small island. In a 2014 U.S. Census, 58% of children in Puerto Rico are living below the federal poverty level, which is twice as much as the overall rate of those living below the poverty line throughout the United States. So what’s causing this?

1. Continued increase in Public debt

Since 2000, Puerto Rico’s debts are going nowhere but up. When the 2007 recession happened, it only made matters worse. The island’s economy is going downhill, and still rolling further down. The Exodus of over 300,000 Puerto Ricans would also mean the burden of debt repayments will fall on a small number of island residents, most of which are likely to be impoverished. With a falling population, how will the American territory pay off approximately $73 billion debts?

2. Delayed tax refunds

In a bid to pay back debt, the government put off giving refunds to taxpayers, and funneled a third of its tax revenue to cover debts. They also delayed paying suppliers, and even cut back on public transportation and health care services. They also increased the sales tax from 7% to 11.5%. The huge unemployment rate, however, would mean the island can’t expect much from income tax.

3. High unemployment rate

When there are no jobs, people can’t feed their families, resulting in poverty. But what can Puerto Rico do when they are forced to eliminate nearly 25,000 jobs in the public sector? They even have to lay off thousands of the workers who are supposed to deal with the outbreak of the Zika virus. This only shows how bad things are going in the job market. They also needed to close 100 out of its 1387 schools, further pushing more people out of a job. As of the first quarter of 2016, the unemployment rate in Puerto Rico is 11.9%.

4. The Effect of Poverty on Children and Families

On Children

  • Poor health
  • Delinquent behavior
  • Lower school performance
  • Chronic stress
  • Susceptibility to disease

On Families 

  • Lack of a secure source of employment
  • Unemployment
  • Dependence on public assistance, such as SNAP benefits

Until something is done, the island’s poverty rate will continue to increase.