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Thursday 19 May 2016

Empire of Lies: How the US Continues to Deceive the World About Puerto Rico

Truthout Stories 

 

Puerto Ricans have watched the US government lie brazenly and repeatedly -- to the American people and the world -- about its actions and interests in the Caribbean. Now, members of Congress are trying to lower Puerto Rico's minimum wage for young people.


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"There are three kinds of lies," said Mark Twain. "Lies, damned lies, and statistics." Unfortunately for Puerto Rico, this is not an aphorism; it is an operating principle.

Separated by an ocean and a language from the mainland, Puerto Ricans have watched the US government lie brazenly and repeatedly -- to the American people and the world at large -- about its actions and interests in the Caribbean.

The latest walk down liar's lane is a cut to the minimum wage, as proposed by the US House of Representatives' Committee on Natural Resources.

Efforts to Lower the Minimum Wage

On April 12, 2016, the House Committee on Natural Resources released HR 4900: the Puerto Rico Oversight, Management, and Economic Stability Act, with the acronym of PROMESA. The bill creates a Financial Control Board, which will act as a collection agency for the hedge funds/vulture funds throughout the island.

Taking their cue from The Wall Street Journal, The Washington Post, the Krueger Report and a study commissioned by 34 hedge funds, the committee decided that a "good" way to spark the Puerto Rican economy and improve the lives of its residents would be to lower their minimum wage ... so they stuck that in the bill, as well.

This appears in Section 403 of PROMESA (p. 75-6) with intentionally convoluted language. The section title, "First Minimum Wage in Puerto Rico," suggests that Congress is creating a minimum wage on the island. It then requires you to read Section (6)(g)(4) of the Fair Labor Standards Act.

Only then do you realize that PROMESA will cut the minimum wage of newly hired young workers throughout the island, from $7.25 to $4.25 per hour. This will apply to everyone aged 20 to 24, whenever they start a new job.

In Puerto Rico, there are over 200,000 people in this age bracket. Many of them are paying student loans. Few of them can afford to live on $4.25 per hour, unless they continue to live with their parents.

The supply-side argument that this will "create more jobs and economic development on the island" is woefully myopic. At $4.25 per hour, $170 per week, $8,840 per year, a young worker will make 25 percent of the per capita income of a resident of Mississippi, the poorest state in the US. Someone needs to explain to the House Committee on Natural Resources that this is not "economic development." It is indentured servitude that smells of racism.

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