Island Facing Economic Destruction
Since the peak at 2006-2007, employment numbers have dropped to levels reached 20 years ago. As I've mentioned in this forum before, what we are witnessing in Puerto Rico is the opposite of economic development; we are experiencing economic destruction.
The implications of this reversal of economic development are three-fold. First, going forward, all tax collection goals will be more challenging to meet. With a smaller labor force, that means fewer taxes collected. Unless of course, Puerto Rico implements sweeping tax reforms and switches from the IVU to the IVA.
Second, it is no wonder that there is a mass immigration of Puerto Ricans, there just aren't enough jobs to keep them here. And while the grey economy still remains strong in Puerto Rico, it appears that even on the fringes of society, there still aren't enough jobs.
Finally, while President Obama just announced the members of the Financial Review Board, it will take years, maybe even a decade for Puerto Rico to establish a floor to the economic destruction. Meanwhile, the economy is going to get worse, maybe much worse, before any economic development (and the jobs that go with it) can begin.
The scariest thing about Puerto Rico's economic downturn is not knowing how bad it will get before things turn around. I mean, where is the bottom? What will these numbers look like after the PROMESA is up and running? How many more jobs will be lost? Where will the new jobs come from? What companies? What technologies? What industries? I wish I knew...
Employment is at 1,007,496 as of Jul 2016. In July 1996, employment was at 1,098,169; a difference of roughly 90 thousand jobs. Let that soak in for a second, yes, there were 90K more jobs twenty years ago! You would have to go back another year to August of 1995, to compare our current employment numbers. We've destroyed 21 years of economy growth.