Structural poverty remains as a serious social challenge in Puerto Rico. Since “Operation Bootstrap”, several policies have been implemented without any success. The economic development model was not able to absorb all the labor available in the economy, and a significant segment of the population did not enjoy full economic success. According to the U.S. Census Bureau, the poverty rate in Puerto Rico is 44.9%, twice the level of Mississippi (24.2%), the poorest U.S. state.
It is clearly evident that policies adopted to reduce poverty in the Island have failed. Furthermore, since 1971 when the Food Stamp program (Nutritional Assistance Program) started in Puerto Rico, the U.S. government appears to institutionalized a welfare state in the territory.
The social impact of the welfare state has been dramatically adverse. Furthermore, welfare programs have seriously affected Puerto Rico’s economic potential. For instance, historically the local economy labor market participation rate has been relatively low compared to U.S. standards. During the last decade, as the economy entered in depression, participation rate plummeted from 50% in 2005 to 39% in 2015.
Proposals
· Create a ten-year strategic plan to reduce the poverty level to 35% by 2027. Based on current data, that would represent a reduction of 350,000 (35,000 per year).
· A government task force with representation of the Labor, Agriculture, Economic Development and the Family Department, will create a comprehensive program to transition current welfare recipients to the labor market;
· Once approve, welfare recipients eligible for work must start to look for a job as a condition to keep receiving their benefits. In case, that the recipient could not find a formal job (part time or full time), the recipient must do voluntarily work at non-profit organization or the government;
· Welfare recipients would benefit from a five-years phase out period where they will continue to receive the social benefits from the government;
· During the five-years transition period, welfare recipients will not be subject to any form of taxes;
· Maximizes federal programs such as “Workforce investment Act” (WIA) and training on the job program to facilitate the transition from welfare to work.
