The legislature will consider on January to increase the minimum wage to $8.50 in 2020 and $9.50 by 2023. I am absolutely convinced that there was no deep analysis and that the re-election of the legislator ahead of the 2020 elections weighed more.
We must analyze the per capita income of Puerto Rico in recent years. The per capita income for 2018 was $31,651, an increase of 0.95 percent over 2017; $31,353 in 2017, an increase of 2.37 percent over 2016; $30,629 in 2016, an increase of 2.91 percent over 2015; and $ 29,764 in 2015, an increase of 2.7 percent over 2014.
If the GDP will represent the right salary to live properly, which by the way, is not the case in P.R., there is a difference of approximately $15,000 annually with a salary of $7.25 an hour and $13,000 based on $8.50 an hour.
Does the proposed increase address this reality? The answer is no. It seems to be another patch, like the labor and tax reform that we all know never really reforms.
Achieving an hourly wage justice project requires reducing the cost of doing business in P.R. first. Because if we do not have low business costs it is very difficult to achieve economic development, and without economic development there are no jobs, and if there are no jobs then what’s the point of higher pay if businesses won’t be hiring!
The cost of energy is one of the biggest costs of doing business for the public and private sector. It should be a priority to lower the kilowatt hour to 12 cents and that way we could use those savings to significantly improve hourly wages.
Another relevant factor is the size of the government and its 78 municipalities, a reform in that direction is imperative. Projects such as regionalization and the merger of agencies, among others, should be addressed with agility.
Social programs should be transformed. Hourly employees cannot access most of the social aids because they are working or do not qualify and/or lose the acquired rights. This situation causes many to give up working or seeking employment, inserting themselves into dependence and reducing the percentage of labor participation, which today is around 39 percent, when the world average is 65 percent.
A social reform that instead of giving, manages to stimulate work through a differential that encourages work and reduces dependence. For example, instead of sending money for the participant to use in specific sector, we could use part of those monies to give the employee a type of incentive for hours. For instance, if he earns $7.25 an hour, he would receive $5.00 per hour as an incentive for a total of $12.25 per hour. This single action would raise wages from $15K to $26K annually. I am sure that our people will prefer to work because they would earn more money. In addition, they will be able to manage their budget properly and not buy for buying as they will have more control. It is important to clarify that this would apply only to people fit to work, the other participants would receive their help normally.
To be a competitive country, P.R. needs a deep labor reform that does justice to the employee and that, among others, eliminates laws that only seek the perpetuity of the politician and the protectionist laws that the responsible Puerto Rican worker does not use and that do not allow a fair pay for adequate time.
We need a labor reform that promotes productivity, efficiency and competitiveness, a system of bonuses in the public sector tied to the country’s results in things like growth in gross domestic product or reductions in efficiency expenses to name a few.
A bonus in the private company based on transparency, where the employee can participate in the results and that his/her bonus is not something imposed, often below what it should be and sometimes above what it can be.
A labor reform that allows the free contracting of employer immunity and that, in turn, offers the employee decent protection and not like today, where the employee often prefers to work injured than to benefit from the Fondo del Seguro del Estado.
A labor reform that takes care of the house worker, the role of the mother and the father in the raising of the children, a labor reform that takes care of the diversity, that promotes the work and the non-dependency, a labor reform focused and results-based.
I know that many will think that the problem is that there is no work in P.R. I differ, in Puerto Rico there is work, but not jobs. It is the story of the egg and the chicken, if we want well-paid jobs, if we want justice to the employee by the hour we have to start with structural changes and simultaneously an economic development agenda that promotes agro industry, the planting of valuable agriculture, the development of the air transshipment port, the growth of local industry from manufacturing to services, a foreign investment that helps us create internal wealth.
In short, talking about salaries without addressing the structural problems of Puerto Rico is nothing other than soapbox speeches.
I am convinced that if we begin to equate our labor laws to that of the United States, it would be a good start on the way to a fair social and labor reform for all Puerto Ricans.
It seems to me that the government is too big to do small things and too small to do big things.