A huge difference in salaries between Puerto Rico and Mississippi

How much of the lower salaries in PR are related to the inefficiencies and lower productivity of Puerto Rican workers?   Spend a day in the DMV getting a driver’s license or renewing your car compared to doing the same in the states in about 1 hour, then it makes PR workers appear to be OVERPAID, not underpaid compared to workers in the states.

Wages, in part, follow productivity.  More productive workers are worth more than unproductive, inefficient ones.


A huge difference in salaries between Puerto Rico and Mississippi

Income in Puerto Rico is almost half of what it is in the poorest U.S. state

Monday, November 11, 2019 – 9:15 AM

The average income of Puerto Rican drivers is equivalent to 45 percent of their counterparts in Mississippi. (Shutterstock)

The median income of full-time Puerto Rican workers is $ 23,538. That same indicator for Mississippi, the poorest state in the United States, is 57 percent higher ($ 37,001), according to U.S. Census Bureau data.

The cost of living in Jackson, Mississippi´s capital city, is 9 percent lower than in San Juan, according to the Institute of Statistics Cost of Living Index.

In other words, Puerto Rican workers earn less and have to spend more to survive compared to workers in the poorest U.S. jurisdiction.

Meanwhile, the difference in some industries is really huge. The average income of Puerto Rican drivers is equivalent to 45 percent of their counterparts in Mississippi. The same applies to construction workers (46 percent), firefighters (51 percent), the medical diagnostic industry (57 percent), educators (67 percent) and engineers (67 percent), among others.salarsssssssssss

“Generally speaking, public employees are all underpaid especially in Puerto Rico. Some are well underpaid, like teachers, police officers and firefighters, and there are exceptions to these bad salaries, like cabinet secretaries and judges. When you compare their salaries (judges) with that of police officers, the difference is incredibly huge,” said retired Public Administration Professor Mario Negrón Portillo.

With this comparison, Negrón Portillo was referring to the proposal to increase the salaries of judges in Puerto Rico between 30 and 44 percent. The bill including this initiative responds to the fact that judges’ salaries have not been updated since 2004 and to a drastic increase in the number of resignations recorded this year in this branch, said Supreme Court Chief Justice Maite Oronoz Rodríguez.

The proposed increase seeks to match the salary of judges in Puerto Rico to that of U.S. jurisdictions where judges have the lowest income.

However, these salary increases are far from rises in the cost of living since the last review of judicial salaries.

According to economist José Alameda, the consumer price index has been showing annual increases of about 1.1 percent over the past decade. Based on that, an adjustment in the purchasing power of judges, whose salaries have not increased since 2004, should be around 16.5 percent and not 30 percent, as proposed for municipal judges or the 44 percent for Supreme Court justices.

If the same percentage were applied to the minimum wage paid in Puerto Rico by federal law – and which has not changed since 2007 –, workers who earn the lower salaries on the island would get at least $ 8.45 per hour. That would raise the annual salary of these workers from $ 15,080 to $ 17,576.

Currently, a single mother with an income of $ 16,910 is considered poor under federal standards.

“There have been no adjustments due to the critical fiscal situation and the economy. Entrepreneurs are always against the minimum wage. They will never be in favor of it. It is ideological. For the classic economic model the State should not intervene in wages, they should be a market issue, and that’s what they stand for,” said Alameda.

Last week, José Ledesma, president of the Chamber of Commerce spoke during a legislative hearing against an increase in the minimum wage, which generated criticism and public debate on whether this level of income is enough to cover a worker’s basic expenses.

“I think that, as a matter of justice, the minimum wage could be increased to recover the loss in purchasing power. In 15 years, inflation has eaten up a portion of that $ 7.25 (federal minimum wage). At the very least, we should compensate for that erosion. There shouldn’t be much controversy over that,” said economist José Joaquín Villamil.

“I think additional raises (to adjustment) should depend on the economy. You can’t increase salaries more if the economy isn’t growing,” added Villamil.

According to Alameda, “everyone should be paid according to the cost of living levels and their productivity levels.”

Alameda said that, with very few exceptions, the island´s private sector has the financial capacity to assume an increase in salaries, so that workers can recover the purchasing power loss. The Planning Board estimates that, between 2007 and 2017, it takes $1 to buy what cost 85 cents back then.

“Perhaps, there are some companies that find it difficult to cover a raise, but the vast majority of businesses should not have problems. Maybe, the grocery store on a corner in Morovis, which has a minimum profit margin, has problems, but large chains, supermarkets, and stores in shopping malls, I don’t think they would have problems,” said Negrón Portillo.

This redistribution of wealth becomes clear when considering that, according to the Planning Board, the pay to workers in Puerto Rico represents a smaller portion of the net income generated by the island annually. In 2009, for example, workers were compensated with 61 percent of net income, which is the earnings generated after covering obligations. Estimates for 2018 suggest that this percentage dropped to 51 percent.

Puerto Rico is currently the jurisdiction with the greatest social inequality in the United States and is among those jurisdictions topping that category in the world.

This entry was posted in analysis and opinion, culture and cycle of dependency, incompetence and mismanagement, minimum wage laws are harmful to society, Puerto Ricans and Puerto Rico people, Puerto Rico > Venezuela > Socialism, Puerto Rico economic crisis, Puerto Rico necessary improvements, Puerto Rico Puerto Rican unprofessionalism makes it difficult to conduct business and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

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