http://money.cnn.com/2017/09/20/news/economy/puerto-rico-hurricane-maria/index.html
Maria hit Puerto Rico, as
a category 4 hurricane, which will lead to overwhelming economic damage. Puerto
Rico is already in years of debt, due to mismanagement of funds, poor policies,
and a struggling economy. Puerto Rico owes around $74 billion dollars to
bondholders and $50 billion to government employees. The cost of clean- up of
the damage caused by Maria will send the debt up even higher. On top of their debt problem, many of Puerto
Rico’s residents are leaving the country due to many factors including high
unemployment which is around 10.1%. This leaves the country with fewer workers
to help repair due to the damage of the hurricane. Puerto Rico’s economy has
been in a recession since 2006, it can ill afford natural disaster expenses.
Even though their government has tried to offer major tax incentives to entice
new wealthy property owners and business startups. Their end goal is
to boost their taxes to help them get out of debt.
Due to the high unemployment, many residents of Puerto
Rico have left or will leave to find better opportunities elsewhere. No one is
going to stay if there are few jobs and it is difficult to take care of your
family. This disaster will cause at least a short-term increase in demand for
skilled workers in Puerto Rico, but due to Puerto Rico’s debt burden the
economy may not be able to increase wages. However, increasing taxes would cause
many problems due to the high percentage of unemployment. The unemployment
level may decrease in the future, due to the loss of workers, but Puerto Rico
will still have to train new workers. This will take time away from productivity
which can lead to the decrease of consumption and overall lead to a decrease in
the GDP. Also, due to the hurricane many people won’t be able to work due to
injuries or be able to get to work due to weakened infrastructure. In
addition, Puerto Rico has been
trying to get people to start businesses so that they can increase investment
and overall lead to an increase in the money supply. This investment effort also
may be affected by the hurricane.
Hurricane Maria may have been a devastating blow, however, it could be an opportunity for workers moving in. As the U.S. has been kicking out illegal immigrants, they could send these workers to Puerto Rico instead. I think this would help solve some of the major issues that you mentioned in your blog. What do you think Puerto Rico should do? I believe the U.S. could help out multiple countries by making efforts to help the cause in Puerto Rico.
ReplyDeleteI agree with Nick. I think the United States could send workers over to help out. These workers could help not only rebuild the city, but help get the economy flowing again. A few countries could ban together and send workers over to Puerto Rico to start businesses so that investment can increase. I think if each country sent a few people over, they could get Puerto Rico back into decent condition.
ReplyDeleteI agree that the only way to stimulate Puerto Rico's economy is to increase the number of workers both adding to GDP as well as paying taxes. However, considering the entire country has lost power and is not expected to regain said power for months will definitely slow the economic recovery. The aid that goes towards rebuilding the infrastructure and returning the country to its pre-Maria state should, however, stir the economy enough before the workers are able to find regular jobs.
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