ARRA News Service
ARRA News Service facebook page  
News for social, fiscal & national security conservatives who believe in God, family & the USA. Upholding the rights granted by God & guaranteed by the U.S. Constitution, traditional family values, "republican" principles / ideals, transparent & limited "smaller" government, free markets, lower taxes, due process of law, liberty & individual freedom. All content approval rests with the ARRA News Service Editor. Opinions are those of the authors. While varied positions are reported, beliefs & principles remain fixed. No revenue is generated for this site - no paid ads accepted - no payments for articles. Fair Use doctrine is posted & used.
Editor/Founder: Bill Smith, Ph.D. [aka: OzarkGuru & 2010 AFP National Blogger of the Year]
Contact: (Pub. Since July, 2006)
    Home Page

One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. -- Plato (429-347 BC)

Wednesday, April 20, 2016

Puerto Rico's Disastrous Economy Shows Consequences Of Increasing Minimum Wage

by Brittany Hunter: Raising the minimum wage has been a constant theme of the left over the past several years. With every high profile liberal supporting an increase in the current minimum wage rate, many states have caved not only to political pressure, but also to pressure from labor unions. As a result, several states are considering legislation that would raise the minimum wage for their residents.

In the past two weeks, both California and New York have passed legislation that would raise each state’s minimum wage to $15 per hour. Though both states have chosen to incrementally increase the wage rate each year, instead of immediately burdening businesses with the new rate, both states will reach the full $15 an hour by 2022.

When signing the bill into law, California Governor Jerry Brown commented that the new policy may not be economically sound, but it was the right political move. Yet, even with the admission that minimum wage laws, “may not make economic sense,” the bill was still signed. As a result, California is going to have to deal with the economic repercussions of raising the minimum wage to such a dramatic extent.

If either California or New York is curious to know what might happen in their states over the next several years, they need only turn their attention to Puerto Rico, American Samoa, and the Northern Mariana Islands.

After the 2007 Fair Minimum Wage Act was passed, each of the fifty states was required to raise the minimum wage from $5.15 an hour in 2006, to $7.25 by 2009.

Something few Americans ever consider is the fact that U.S. territories are required to comply with American minimum wage laws as well. So for Puerto Rico, American Samoa, and the Northern Mariana Islands, their governments would also have to raise the minimum wage to $7.25 an hour.

When the minimum wage is raised, the private sector is left scrambling to find a way to pay for the higher wages. Though many companies will be forced to raise the price of their consumer goods and services in order to continue operating within their profit margins, some might have to find other ways to meet the new wage requirements.

This means that many businesses will be left with no choice but to lay off employees or dramatically cut employee hours. Since those making only minimum wage are in entry-level positions, if their employers are forced to let them go, they lack the skills needed to quickly rebound in the job market. As a result, unemployment begins to rise.

When minimum wage requirements are made at the city or state level, the losses experienced from high unemployment rates are offset in the local economy, since many who are unable to find work often relocate to an area where the minimum wage isn’t as restrictive.

For those living in the U.S. territories, like Puerto Rico, American Samoa, and the Northern Marinas Islands, relocation is not as easy as it is for residents in the continental states. Since such a drastic move is out of the question for many living in U.S. territories, where the effects of a minimum wage hike can be felt on a much larger scale.

According to National Review, “The impact on the economies of American Samoa and the Northern Mariana Islands was devastating. In American Samoa, by 2009, after only three of the ten scheduled minimum-wage increases, overall employment dropped 30 percent — 58 percent in the critically important tuna-canning industry. Real per capita GDP in American Samoa fell nearly 10 percent from 2006 levels. In the Northern Mariana Islands, by the end of 2009, employment was down by 35 percent, and real per capita GDP off by 23 percent.”

As the situation grew desperate, the governor of American Samoa testified before the U.S. Congress in 2011, explaining that the new minimum wage policy created, “the real possibility that American Samoa could be left substantially without a private-sector economic base except for some limited visitor industry and fisheries activities. American Samoa’s economic base would then essentially be based solely on federal-government expenditures in the territory.”

Puerto Rico met a similar fate after the new minimum wage rate went into effect. The increase in wage rate resulted in a minimum wage that was greater than 75 percent of the Puerto Rican median wage.

National Review reports that, “Economic activity declined and Puerto Rican unemployment surged. Between 2007 and 2013, Puerto Rico’s GDP per capita declined by nearly 7 percent, while over the same period it was unchanged nationwide. As a result, many Puerto Ricans left for the U.S. mainland. The migration of young, mobile, working-age Puerto Ricans created an imbalance as the aged and less ambitious remained behind.”

Additionally, foreign investors were turned off by hiring Puerto Ricans, since residents of Jamaica and the Bahamas would only cost half as much to employee.

As far as the tourist industry is concerned, National Review also points out that, “Tourists were reluctant to absorb the 30 percent premium for a Puerto Rican hotel room relative to other Caribbean destinations. Tourist arrivals in 2012 were identical to arrivals in 1992, while tourist visits over the same period doubled in the Dominican Republic and tripled in Cuba. Today, tourism contributes only 6 percent to Puerto Rico’s GDP compared with 27 percent in Jamaica and 16 percent in the Dominican Republic.”

By raising the minimum wage to $15 an hour, California and New York are not just setting an American record for highest minimum wage, they are setting a global record as well. Even France, where socialism thrives, has a minimum wage equivalent to only $10.90 an hour.

In fact, the only time in history that the minimum wage rate was increased at economic levels comparable to that of New York and California was in 2007, when the U.S. territories implemented the Fair Minimum Wage Act. As we have just seen the disastrous economic consequences experienced in American Samoa and Puerto Rico, we can only hope that the rest of the states avoid passing legislation that “may not make economic sense.”
Brittany Hunter is a Staff Contributor at Generation Opportunity a national, non-partisan youth advocacy organization focusing on Millennials ages 18-29.

Tags: Puerto Rico, Disastrous Economy, Consequences, Increasing Minimum Wage, Generation Opportunity, Brittany Hunter To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. and "Like" Facebook Page - Thanks!
Posted by Bill Smith at 4:18 PM - Post Link


Post a Comment

<< Home

national debt
Don't miss anything!
Subscribe to the
ARRA News Service
It's FREE & No Ads!

You Receive One Email Each Morning
With Prior Days Articles / Toons / More

Also, Join us at:

Recent Posts:
Personal Tweets by the editor:
Dr. Bill - OzarkGuru
Married 48yr #Conservative #Constitution #NRALife #GunRights #USAF 22yr #military #veteran #Christian #CCOT #ProLife #TEAParty #GOP #TCOT #SGP #schoolchoice

Action Links!
Arkansas State Senators
AR State Representatives
Arkansas Governor Office
Arkansas Attorney General
Bankrupting America
US House of Representatives
US Senators
Family Research Council
Sunshine Review

Facebook Accts - Dr. Bill Smith
ARRA News Service
Arkansans Against Big Government
Alley-White Am. Legion #52
Baxter County Republicans, AR
Catholics & Protestants United Against Discrimination
End Taxpayer Funding of NPR
Overturn Roe V. Wade
Prolife Soldiers
Project Wildfire
Republican Liberty Caucus of Arkansas
The Gold Standard
Twin Lakes Republican Women
US Atty Gen Loretta Lynch, aka Eric Holder, Must Go
Veterans for Sarah Palin
Why Vote for Hillary (Satire)
FB Groups:
Arkansas For Sarah Palin
Arkansas Conservative Caucus
Arkansas County Tea Party
Arkansans' Discussion Group on National Issues
Blogs for Borders
Conservative Solutions
Conservative Voices
Defend Marriage -- Arkansas
FairTax Nation
Arkansas for FairTax
Friends of the TEA Party in Arkansas
Freedom Roundtable
Let's Mine AR Lignite NOW!
Personhood Initiative
Pro-Life Rocks - Arkansas
Republican Network
Republican Liberty Caucus of AR
Reject the U.N.


Links to ARRA News
A Patriotic Nurse
Agora Associates
a12iggymom's Blog
America, You Asked For It!
Americans for a Free Republic
America's Best Choice
America's Whatchtower
An Ol’ Broad’s Ramblings
AR Republican Assembly
ARRA Twitter
As A Matter of Fact
As The Crackerhead Crumbles
Baaad Media!
Baxter Co. GOP Assembly
Baxter County Republicans
Benton Co. GOP Assembly
Black & Right
Blogs For Borders
Blogs for Palin
Blow the Trumpet Ministry
Boot Berryism
Cap'n Bob & the Damsel
Chicago Ray Report
Chuck Baldwin - links
Citizen Pamphleteer
Common Cents
Conservative Hideout
Conservative Observer AZ
Conservative Voices
Conway Real Deal
Defeat Obama's Agenda
Diana's Corner
eGOP News
Florida Pundit
Franklin Online Outreach
Free Zone Media Center
For God and Liberty
Garland County Republicans
Greater Fitchburg For Life
Guns and Religion
Lasting Liberty Blog
Liberal Isn't Amy
Liberty's Lifeline
Maggie's Notebook
Marathon Pundit
Monkey in the Middle
NASA Satellites
No Runny Eggs
Okie Campaigns
Our Voices Arkansas
Patriot's Corner
Publius Forum
Randy's Roundtable
Real Debate Wisconsin
Religion and Morality
Right on Issues that Matter
Right Reason
Rocking on the Right Side
Saber Point
Saline Watchdog
Secure Arkansas
Sentry Journal
Stop Obama Satire & Cartoons
The Arkansas Patriot
The Audacity of Logic
The Blue Eye View
The Bobo Files
The Born Again Americans
TEA Party Cartoons
The Conservative Citizen
The Foxhole | Unapologetic Patriot
The Liberty Republican
The Lid
The Looking Spoon
The Maritime Sentry
The O Word
The Path to Tyranny Blog
The Real Polichick
Truth About Obamacare
Twitter @ARRA
Warning Signs
Women's Prayer & Action

Editor's Managed Twitter Accounts
Twitter Dr. Bill Smith @arra
Twitter Arkansas @GOPNetwork
Twitter @BootBerryism
Twitter @SovereignAllies
Twitter @FairTaxNation

Editor's Recommended Orgs
American Committment
American Enterprise Institute
American Family Business Institute
Americans for Limited Government
Americans for Prosperity
Americans for Tax Reform
American Security Council Fdn
AR Faith & Ethics Council
Arkansas Policy Foundation
Ayn Rand Institute
Bill of Rights Institute
Campaign for Working Families
Center for Individual Freedom
Center for Immigration Studies
Center for Just Society
Center for Freedom & Prosperity
Citizens Against Gov't Waste
Citizens in Charge Foundstion
Coalition for the Future American Worker
Competitive Enterprise Institute
Concerned Veterans for America
Concerned Women for America
Curtis Coleman Institute for Constitutional Policy
Declaration of Am. Renewal
Eagle Forum
Family Research Council
Family Security Matters
Franklin Center for Gov't & Public Integrity
Gingrich Productions
Global Incident Map
Great Americans
Gold Standard 2012 Project
Gun Owners of America (GOA)
David Horowitz Freedom Center
Institute For Justice
Institute for Truth in Accounting
Judicial Watch
Less Government
Media Reseach Center
National Center for Policy Analysis
National Right To Work Foundation
National Rifle Association (NRA)
National Rifle Association (NRA-ILA)
News Busters
O'Bluejacket's Patriotic Flicks
Open Secrets
Presidential Prayer Team
Religious Freedom Coalition
Renew America
Ron Paul Institute
State Policy Network
Tax Foundation
Tax Policy Center
The Club for Growth
The Federalist Today
The Gold Standard Now
The Heritage Foundation
The Leadership Institute
Union Facts

Blogs For Borders

Reject the United Nations

Adopt Our Troops in Prayer

Thousands of Deadly Islamic Terror Attacks Since 9/11

FairTax Nation on FaceBook
Friends of Israel
Blog Feeds
Syndicated - Get the ARRA News Service feed Syndicated!
ARRA Blog Feed

Add to Google Reader or Homepage

Add to netvibes

Add to Bitty Brouser

Add to The Free Dictionary

Powered by Blogger

Politics Blogs
Politics blog

  • How To Exchange Links!
  • Comments by contributing authors or other sources do not necessarily reflect the position the editor, other contributing authors, sources, readers, or commenters. No contributors, or editors are paid for articles, images, cartoons, etc. While having reported on and promoting the beliefs associated with the ARRA, this blog/site is not controlled by nor funded by the ARRA. This site/blog does not advertise for money or services nor does it solicit funding for its support.
  • Fair Use: This site/blog may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. Such material is made available to advance understanding of political, human rights, economic, democracy, and social justice issues, etc. This constitutes a 'fair use' of such copyrighted material as provided for in section Title 17 U.S.C. Section 107 of the US Copyright Law. Per said section, the material on this site/blog is distributed without profit to readers to view for the expressed purpose of viewing the included information for research, educational, or satirical purposes. Any person/entity seeking to use copyrighted material shared on this site/blog for purposes that go beyond "fair use," must obtain permission from the copyright owner.
  • © 2006 - 2016 ARRA News Service
Creative Commons License
Creative Commons Attribution Noncommercial Share Alike 3.0 Unported License.