The Obama administration has made the mass departure of people from Puerto Rico a central part of its pleas for congressional action to help the commonwealth, warning that the out-migration is worsening the island’s crippling debt crisis by depleting its tax base. Since most departing Puerto Ricans, who are U.S. citizens, move to the United States mainland and lean Democratic, the warnings carry a subtext for immigration-wary Republicans: Act now to help the island, or face the political fallout later.
A new report released on Thursday provides new insight into the acuteness of the crisis. The Pew Research Center analysis of the latest county-level census data shows just how much the faltering economy and accompanying exodus have drained the island of its people, painting a bleak picture that can only add urgency to efforts underway in Congress.
Puerto Rico’s population was 3.47 million in 2015 -- 9 percent, or 334,000 people, smaller than it was in 2000, according to Pew.
Not surprisingly, the lion’s share of the drop -- some three-quarters -- occurred from 2010 to 2015, as the island’s troubles mounted in the wake of the 2008 financial crisis.
Pew created an animated graphic comparing Puerto Rico's growth in previous decades with the recent decline and illustrating where declines have been largest. San Juan, the island's capital city, has been hit hardest, losing 10 percent of its population, or 40,000 people, since 2000.
Pew points to Puerto Rico’s prolonged economic malaise as the primary culprit for its shrinking population. Economic opportunity, according to census data cited by the study, is the main reason Puerto Ricans give for moving to the mainland U.S.
But the report also notes another byproduct of the poor economy: It has depressed the fertility rate, making it less likely that people who stay on the island will replace the people who leave.
Puerto Rico has dramatically raised taxes and cut spending in recent years to pay down a debt burden of over $70 billion, which the island’s government says it will never be able to pay in full. The effect of the austerity has been to both severely limit the ability of the island's economy to recover -- it has an 11.7 percent unemployment rate, more than twice that of the mainland U.S. -- and hollow out key social services, like health care and education.
That is one reason the White House has said that “without congressional action the situation [in Puerto Rico] could soon become a humanitarian crisis” -- even as other observers, like Democratic presidential candidate Sen. Bernie Sanders (I-Vt.), say that crisis has already arrived.
And the island could soon face new legal troubles, if, as many expect, it is unable to make bond payments to creditors due in a few weeks.
Puerto Rico needs help from Congress because as a U.S. commonwealth it occupies a gray zone that has deprived it of many of the economic liberties available to states. Chief among those is the ability to extend federal Chapter 9 bankruptcy protections to municipalities.
Puerto Rico’s government says that without the ability to restructure its debts in a judicially supervised process, it will never be able to recover economically. The commonwealth argued before the Supreme Court on Tuesday that it has the right to pass local bankruptcy laws in the absence of federal protections. If the court rules in the island’s favor, it would allow Puerto Rico to reduce the amount its municipal utilities owe, which, at $20 billion, is only a fraction of its overall debts. A decision in the case is expected by the end of June.
Regardless of how the high court rules, however, aid for the island may soon be on its way. House Republicans are hard at work on legislation that would open the door for the island to restructure debts in exchange for financial reforms overseen by a Washington-based fiscal oversight board. House Democrats have said they believe their colleagues are negotiating in good faith.