What is happening with Puerto Rico employment?

August 10, 2012

Some odd employment data is coming out of Puerto Rico. Although the population of the island has increased (see chart above), labor participation and the number of people employed have declined steadily, as seen below.

Meanwhile the government reports that the unemployment rate keeps declining (see below). Is this because they are contracting the size of the labor pool, or are there really new jobs coming online?

A Spanish-language publication says that employment gains this year are coming from government hiring (Google Translation from Spanish):

In the first 11 months of this fiscal year, election year, government employment has increased while still falling in the private sector. The data show that employment growth occurs in the central government agencies rather than municipalities. Why does this increase occur when the government is cutting spending?

Data from the Department of Labor and Human Resources indicate that employment in the public sector increased 2.8% in the first 11 months of fiscal 2012. The government has created about 7,400 more jobs than in the same period last fiscal year. The increase occurred among central government agencies (an increase of 4.2%, about 7,800 additional employees), while in the municipalities, employment fell 1.4%.

Is the Puerto Rico economy actually contracting without the addition of central government hiring?


Reuters: Puerto Rico turns to lottery to light up gray economy

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