Identify and fully explain the three (3) economic phases implemented in Puerto Rico by the United States (investors and/or government) throughout the twentieth century. How did these economic phases create a surplus or excess population in Puerto Rico?

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By the close of the twentieth century, Puerto Rico existed as two different economic worlds. On the one hand, the per capita income of Puerto Ricans in comparison with all other Latin American inhabitants was one of the highest. On the other hand, more than half of the population of the island fell below the US poverty line. This income gap has continued to widen up to the current day.

Since the 1950s, the per capita income of Puerto Rico has maintained a gradual decline. Some researchers at the Brookings Institute have posited the reason for this stems from a combination of the decline of local industries with generous U.S. government subsidization. For example, Gary Burtless and Orlando Sotomayor have written a chapter for a Brooking’s study on Puerto Rico entitled Restoring Growth in Puerto Rico: Overview and Policy Options. In it they argue that the decline of the home needle-working industry precipitated a decline in the overall work force in the Puerto Rican labor market. Fewer individuals felt inclined to compete with large fabric and textile corporations, which were able to sell larger amounts of consumer goods to Puerto Ricans for cheaper prices.

From about 1970–1982, the U.S. government stepped in to try to alleviate some of the poverty faced by unemployed Puerto Ricans. They significantly increased the amount of government transfers to the region while subsidizing the expansion of certain social security institutions such as the Food Stamp program. Burtless and Sotomayor argue that this further deincentivized individuals from pursuing meaningful careers, as it had become possible to survive off of government subsidies by the early 80s.

To address the second part of your question, Puerto Rico has also witnessed a steady decline in population since the early twentieth century. By and large this can be attributed to the decreasing opportunities many Puerto Ricans enjoy in comparison with citizens of the U.S. mainland to pursue competitive higher education opportunities or to become integrated into large industrial economies. As a result, at least part of the population has steadily emigrated out of the island in search of more profitable career choices.

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