As soon as he heard the question about the cost of living and the increase in essential services such as water and electricity, Cecilio González took a stand to demand an increase in the minimum wage and a new economic structure that benefits the working class.
González, 77, asserted that the increases that have already entered into force do not respond to a salary that has not increased for years and an economy that, he said, has not managed to take off on its own.
"Those increases are not on par with the income we have. Everything is going up and income is going down. The first thing is that the minimum wage should be $15 an hour and those water and electricity bills need to go down," the San Juan native said. "With these [government] benefits that come, people's eyes go like billiard balls, but what they are preaching is poverty and [we] don't see that the government is preaching the wealth that is [found] in employment. The only thing that lifts a country is production."
In recent weeks, Puerto Ricans have seen their water and electricity bills rise, as well as what they pay for gas. In September, the benefits disbursed to offset the economic impact of the COVID-19 pandemic, such as Pandemic Unemployment Assistance (PUA), will end.
A study published by the Institute for Youth Development (IDJ by its Spanish initials) stipulates that federal aid received during the pandemic had the direct effect of reducing the level of poverty in the younger population. In that period —which began in March 2020—, poverty levels would have stood at 52 percent without federal aid, but were reduced to 24 percent with the injection of these funds, which will soon cease.
The study addresses that these benefits will end and that there will be a direct impact on the island's poverty level.
"The reduction in poverty may be temporary, and when the pandemic subsides, Puerto Rico may return to 'normal' child poverty rates of 58 percent or higher," the study reads. "This would be the scenario unless public policies are adopted to cause a permanent reduction in poverty."
María Enchautegui, director of research at the IDJ, warned that the increases in profits that began this month have a “direct effect on payrolls and you will have indirect costs because that enters into the cost of production. It is a double hit, because there is a possibility that this will have an effect on the price of the products."
One of the solutions they contemplate is that the aid can be extended to benefit people who, although in the labor force, earn low incomes.
"We are looking, for example, at government aid and how it could be modified so that people who work, but earn little, can access this aid and reduce precariousness," she stated. "There are small jurisdictions that have been experimenting and helping low-income families. They are experiments, they are pilot processes, but they have shown how the precariousness of families and the negative effects that poverty has on children could be reduced."
Earlier this month, two increases came into effect: a 7.6-percent increase in the electricity bill of residential customers and a 2.5-percent increase in the residential bill of the Aqueduct and Sewer Authority (PRASA). They increased at a time when the government branches have not agreed to approve the increase in the minimum wage, and mere months before the end of federally-allocated benefits related to the pandemic.
Gov. Pedro Pierluisi has already announced that he does not rule out sending a bill to increase the minimum wage to $8.50 an hour, from the current $7.25 an hour.
"Gov. Pedro Pierluisi gave the Minimum Wage Committee a period of 90 days to give him their input. The committee has been meeting and working on this with speed. As soon as the governor has the information, he will be providing it to the legislative leadership, as it is important that the committee's recommendations are part of the discussion of the minimum wage bill. If necessary, the governor could present a legislative measure at the beginning of the regular session next August," said Sheila Angleró, press secretary at La Fortaleza.
What Will Happen After the PUA?
The secretary of the Department of Economic Development and Commerce (DDEC by its Spanish acronym), Manuel Cidre, said last Tuesday that the question of what will happen once the PUA ends is one that should be answered by those who have received this benefit.
"That question is precisely for the one who receives the aid that ends on September 4. What we are hearing at the federal level is that no type of aid will be continued," he replied. He added that the DDEC will continue promoting job fairs, which have been scarcely attended.
José Caraballo Cueto, a professor of statistics and finance at the University of Puerto Rico - Cayey campus, said that increasing the minimum wage would help somewhat to alleviate the increases that now threaten consumers' pockets.
"It helps, although it does not counteract it. It helps those workers who are in the lowest wage scale and I think the moment is ideal to increase the minimum wage because there are many companies that have had to raise wages to attract employees —while others have not— and that would help balance the competitiveness," he affirmed.
Caraballo pointed out that the increases in the water and electricity services “are going to be paid disproportionately by the people who earn the least, those who have the least income. Although some people are not feeling the impact of this increase due to the federal stimuli they have received, once those stimuli end, the increases in the cost of living will remain."
Vulnerable Communities "Can't Take It Anymore"
Adi Martínez Román, director of operations of the Legal Center for Resilience Development of the University of Puerto Rico, said that the passage of Hurricane María in 2017 exposed poverty on the island. The money that came in response to the disaster, she said, has not directly benefited low-income communities.
"The rise in the cost of basic services is yet another blow to a population that has already been highly vulnerable for the past four years. In short, our impoverished communities can't take any more blows to their already fragile economy," she asserted.