WIOA State Plan Common Elements

  i. Employment and Unemployment

Provide an analysis of current employment and unemployment data, including labor force participation rates, and trends in the State.

Employment, Unemployment and Labor Force Participation  

The labor force in Puerto Rico has been contracting since the start of the Puerto Rican recession in FY 2017. From 2007 through 2019, the labor force fell 24%. For this reason, the labor force participation rate plunged from 48.6% in 2007 to 40.6% in 2019. In other words, 6 of every 10 people who are of working age are not in the labor market. Since 2010, unemployment on the Island has decreased in number and rate. However, Puerto Rico continue being the jurisdiction with the highest unemployment rate among all states. Even more significant, Puerto Rico's low labor force participation rate remains not just as the lowest among all jurisdictions but also one of the lowest in the World. 

     Table 18 - Average labor force, participation and unemployment, 2000-2019

 Source: PR Department of Labor and Human Resources.

Puerto Rico’s recession has impacted the labor participation rate among young age groups. From 2015 to 2017, the age group of 20 to 24 years old was the group with the largest decrease in participation rate (-4.7%). With a participation rate of 43.4%, Puerto Rico remains well below the participation of 63.2% observed in US. The biggest differences in participation rates among age groups are noted in the age groups of 16 to 24 years old and 55 to 64 years old.  

   Table 19 - Population by age in labor force (%), 2015 and 2017

 Source: U.S. Census Bureau, 2017 and 2015 American Community Survey 1-Year Estimates

The Federal Reserve Bank of New York (FRBNY) characterized Puerto Rico’s labor market as being "quite weak" (an update in the competitiveness of the Puerto Rican economy, 2014). Along with the wide gap that persists between the unemployment rates of Puerto Rico and the US. The low rate of participation in the labor force, particularly among less educated workers was stressed by the FRBNY as the most important factor in the labor market limiting the island’s competitiveness. It further urged to counter skills atrophy through the promotion of work experience and creating jobs and encouraging active participation in the labor market, especially for the young uneducated.

Youth Workforce Participation

The Youth Development Institute (YDI) of Puerto Rico, a nonprofit organization working to advance public policies- at both the federal and commonwealth level- that improve the lives of children and youth in Puerto Rico, presented a recommendation focuses on targeting the youth workforce development outcomes by providing specific youth workforce participation data for Puerto Rico. 

Moreover, comparing employment and educational attainment data between years 1990, 2000 and 2016, the YDI can observe an important increase for youth ages 16 to 25 in Puerto Rico. However, these improvements have not translated to decreases in poverty levels among the same population; Puerto Rico’s youth workforce remains poor. These statistics pre-date Hurricane Maria but taken together they present a sobering picture of the state of youth employment prior to the hurricane and will likely be exacerbated by current conditions in Puerto Rico.

Other recent natural disasters, including the Southeast earthquakes at the end of 2019 and first months of 2020 could impact the labor market indicators, especially in the impacted region.

Employment and unemployment by region and local area

Employment in Puerto Rico is concentrated in the metropolitan area. This area has most of the establishments and an important share of the population of Puerto Rico. Most of the metropolitan area is within the North Central Region. The North-Central region employment relies on service industries, including educational services, finance and insurance services, and commerce.

Observing the distribution of employment among the local areas, we identified the local areas of San Juan and Caguas-Guayama  as the top areas in terms of employment. Other local areas with significant number of employees are in the North of the Island.

Related to the unemployment rate among the region areas, we identified the southwest region as the top region in terms of unemployment.  

Between 2013 and 2018, there were lost almost 15,000 jobs. The local areas of San Juan, Bayamón-Comerío, and Ponce were the areas that lost the most jobs.  A local area that stands out is the Northeast area (#2) showing that all municipalities within that area have lost jobs.

Individuals with barriers to employment  

In 2018, Puerto Rico had a population of 3.2 million with 1 million people in the labor force. Many economic, political, and social factors contributed to having a proportionally large population with barriers to employment. A consequence of this situation is the low participation rate and the high unemployment mentioned before. Among the top groups with barriers to employment are individuals below poverty levels, SNAP recipients, individuals with disabilities, and older individuals.

  Table 20 - Population with Barrier to Employment in Puerto Rico

Source: American Community Survey 2013-2017, five-year estimates unless otherwise specified.

Note: One individual can be counted in several groups. Numbers cannot be added.

* National Kids Count Data (Teens 16-19 not in school and not working.     

Displaced homemakers

Data are currently unavailable to accurately characterize this group as defined in section 3(16) of WIOA. ACS data estimated unpaid family workers in the population 16 years and older in the labor force to be 2,810 individuals in 2017.

Low-income individuals 

In Puerto Rico, 44.9% of the population lived below the poverty level in 2017. This share could have increased after hurricanes Irma and Maria in 2017 and the earthquakes in the Southeast of the Island between December 2019 and the start of 2020. Setting these events aside, the number of persons in poverty fell by 309,487 persons from 2010 to 2017 (mainly because of migration). Nonetheless, the share of individuals living below the poverty level remained almost unchanged. In Puerto Rico, it is more than twice the share in the US. 

  Table 21 - Population living below the poverty level

Source: U.S. Census Bureau (2019). American Community Survey 5-Year Estimates.

  Table 22 - Households by income level

Source: U.S. Census Bureau (2019). American Community Survey 5-Year Estimates.

The Nutrition Assistance Program (NAP) of the Government of Puerto Rico provides a monthly benefit for nutritional assistance to low-income households. According the American Community Survey 2017, 38.3% of households in Puerto Rico received food stamps, compared with 12.6% in the US. Among the Local Workforce Development Areas, the areas of La Montaña, Norte-Central Arecibo, and Ponce had the largest percent of households on food stamps with 49.8%, 47.1%, and 45.9%, respectively.

  Table 23 - Receipt of food stamps in the past 12 months by local area, 2017

Source: US Census Bureau. ACS 2017, 5 year estimate.

In Puerto Rico, the 57% of single female headed households were on food stamps, compared with 48% of single male headed households and 27% of married couples. All these percentages were higher than their US counterparts.  

  Table 24 - Households on food stamps by type and local area, 2017

 Source: US Census Bureau. ACS 2017, 5 year estimate.

In Puerto Rico in 2017 there were 734,789 persons with disability, which represents 23% of total population, compared with 12.6% in the US. The prevalence of disability is especially significant among 35 years and more age groups.

  Table 25 - Percentage of population with disability, 2012, 2017

 Source: U.S. Census Bureau (2019). AMS 5-Year Estimates (s1810).

In 2017, the most common disability among employed persons were ambulatory (39.5%) and vision (35.8%). The most widespread disabilities among unemployed persons were cognitive and ambulatory with 40.7% and 31.4%, respectively. Among the population not in the labor force, the most common disabilities were ambulatory difficulty and cognitive difficulty with 15.5% and 13.9%, respectively.

 Table 26 - Vocational rehabilitation service customers by type of disability, PY 2015

 Source: PRVRA, Service statistics, PY2015.

According to statistics of the Puerto Rico Vocational Rehabilitation Administration (PRVRA), the top 3 occupations where the people seeking their services worked were Sales and Related, Office and Administrative Support, and Food Preparation and Serving Related occupations.

  Table 27 - Employment outcomes of vocational rehabilitation services by major occupational group, PY 2015

 Source: PRVRA, Service statistics, PY2015. Might not add to 100% due to rounding.

According to ACS estimates from 2017, the share of employed population with a disability in Puerto Rico was 8.5%, which grew significantly from 7.8% in 2016.

The PRVRA service statistics confirm ACS estimates for population 16 and over for the jobseeker population in in terms of distribution by type of disability.

   Table 28 - Employment status by disability of population 16 and over, 2012-2017

 Source: U.S. Census Bureau, 2012-2017 American Community Survey.

Older Individuals

As shown in the table below, population 55 to 64 dropped slightly (-2.3%) between 2016 and 2018, while the population 65 and over rose by more than 2.8%. According to ACS estimates, the labor force participation in Puerto Rico for persons 55 and older has stayed at approximately the same level during the past years; about half of that in the United States. Population aging poses significant challenges in all respects, including workforce development and regarding efforts aimed at jumpstarting the participation in labor force of the population.

Ex-Offenders

According to the 2019's Inmate Population Profile completed by the PR Department of Correction and Rehabilitation (PDCR), as of September 2019, there were 7,663 inmates in the correctional facilities in Puerto Rico.  Of this population, 7,400 or 97% were male and 263 or 3% were female.

Regarding the age distribution, the largest age group of the male inmate population was the 25 to 29 years age group with 1,412 inmates or 19% of total males. In the female inmate population case, the largest group was the 35 to 39 years age group with 67 inmates or 25% of total females.

As per their education and skills to participate in the labor market, 43% of male and 34% of female inmate population had less than high school diploma. About 3% of male and 0.8% of female inmate population could not read. On the other hand, most of them (57% of males and 66% of females), had high school diploma or more education.   As a matter of fact, 70% of male and 53% of female inmates had a job before entering the correctional system. The principal sectors in which male inmates worked before incarceration were Construction, Cleaning and Maintenance, and Commerce with 32%, 14% and 12%, respectively. In the case of female inmates, the principal sectors were commerce, cleaning and maintenance and food related with 22%, 14%, and 12%, respectively.

  Table 29 - Sociodemographic characteristics of the inmate population

 Source: Department of Correction and Rehabilitation. Perfil de población confinada 2019.

Homeless individuals, or homeless children and youths

In 2017 there were 3,501 homeless persons in Puerto Rico. "Chronically Homeless" individuals were the largest group with 1,085 persons or almost one third of total homeless.

 Table 30 - Homeless persons by category, 2011-2017

 Source: HUD, Annual Homeless Assessment Report to Congress, 2007-2017.

Individuals within 2 years of exhausting lifetime eligibility under the Temporary Assistance for Needy Families (TANF) program

In 2018, a total of 6,048 families received assistance through TANF, of which 98.8% received medical assistance, 99.2% nutritional assistance with a monthly pay of $355.

   Table 31 - TANF families by public assistance program 2015, 2018

 Source: Office of Family Assistance. Characteristics and Financial Circumstances of TANF Recipients.

In FY 2018, 5,560 adults received assistance through TANF, of which 14.3% had less than 10^th grade of education, 10.1% reached 10 – 11^th grade, 56.5% completed 12^th grade and 19.1% had more than high school education.

  Table 32 - TANF adult recipient by educational attainment 2015, 2018

Source: Office of Family Assistance. Characteristics and Financial Circumstances of TANF Recipients

As highlighted before, 40.9% of all families live below poverty level. From these, 59.1% are female-headed families, and 45% of those have children under 18 years old. This factor causes it to be more difficult to connect TANF families to the job market.

   Table 33 - TANF Adult Recipients by Employment Status 2015, 2018

Source: Office of Family Assistance. Characteristics and Financial Circumstances of TANF Recipients.

As shown below, the most common reasons of TANF closures in 2018 were voluntary closure with 37.9%, employment with 12.7%, and reaching the federal time limit with 8.6% of all cases.

  Table 34 - TANF Closed-Case Families by Reason for Closure 2015, 2018

 Source: Office of Family Assistance. Characteristics and Financial Circumstances of TANF Recipients.

Single parents (including single pregnant women)

According to 2017 ACS data, there were 371,328 single parent families or 44% of total families. This figure included 80,278 single-male headed families and 291,050 single-female families.

The percentage of persons unemployed for 15 weeks or more reached a peak of 4.9% in 2011, after the full impact of the Great Recession. Since that year, this percentage has been decreasing to 1.6% in 2019.

 Table 35 - Alternative measure of labor underutilization U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force, 2007-2019

Note: The figure was calculated by taking the average of each trimester.

Source: Puerto Rico Department of Labor and Human Resources.

Other groups: Veterans

In 2017, there were 83,641 veterans in Puerto Rico. Most were in the 75 years and over age group with 33% of total. The second most import age group of veterans was 65 to 74 years. There were 33,682 veterans of working age (18 to 64 years), representing 40% of total veterans.

  Table 36 - Veteran population by age, September 2014

 Source: U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates

    ii. Labor Market Trends.

Provide an analysis of key labor market trends, including across existing industries and occupations.

The labor market in Puerto Rico has the following trends:

• Reduction in the participation rate.
• High and protracted unemployment.
• An ageing of the labor force.
• Transitioning from manufacturing to services industries.
• Government downsizing.
• High outmigration of people in working age.
• A highly educated labor force.

Demographics

The demographic pressures on the labor force, including aging, population decrease, and a historic low natural growth rate are challenged by the increased outflow of migrants to the states, which spiked from 28,253 net out-migrants in 2010 to 112,551 in 2018. Outmigration was bolstered by the impact of hurricanes Irma and Maria in September 2017.

 Table 37 - Net outmigration to States, 2007-2014

 Source: U.S. Census Bureau, 2010-2018, American Community Survey

As shown in table below, the percentage of outmigrants with post-secondary education grew from 40% in 2010 to 48% in 2013, and 56% in 2017. The median age of out-migrants increased from 28.1 in 2010 to 30.1 years in 2017. The numbers showed a relative shifting from blue-collar emigrants to more white-collar emigrants in recent years.

    Table 38 -  Profile of out-migrant to other States, 2010, 2013, 2017

 Source: PP Institute of Statistics. Migrant profile report (2010,2015,2017).

Government Downsizing

From 2009 to 2019, the public sector decreased by 29.9% with an average drop of 3.5% per year. As a result, the share of government in total employment has gone from 30% to 23.2% in the last decade. The effects of government downsizing policies from 2009 to 2015 ensued a loss of 56,000 jobs with more than 20,000 of those being lost in 2010 alone.

State employment holds the largest portion within the public sector with an average share of 70% during this period. Nonetheless, it has decreased 35.9% (2009-2019) or -4.3% on average per year. Likewise, local government employment has decreased 20.1% during this period; however, federal jobs have increased by 11.4%. 

   Table 39 -  Government employment, 2009-2019 

Occupations

In terms of occupations, the largest number of jobs added between 2014 and 2018 were Assemblers and Fabricators with 5,110 jobs (see table 39). Moreover, the occupation with the largest expansion, among those that added the most jobs, was Middle School teachers with a percentage gain of 393% during this period. On the other hand, the three occupations with the greatest losses in employment were Office and Administrative Support Occupations, Sales and Related Occupations, and Retail Salespersons. This is consistent with the increase of 11.2% of unemployment insurance claimants that worked in Retail Trade between 2014 and 2018.

The table below shows that the total number of individuals claiming unemployment insurance has fallen by 8,197 (32.7%). This, in part, may be due to the increased changes in migration patterns. Moreover, there has been a decreasing trend in males that has shifted to females, which now make up more than half of unemployed insurance claimants. From 2014 to 2020, the bulk of unemployment claimants has remained in the 25-54 age groups, comprising 63.4% of total cohorts in January of 2020.

When assessing occupation groups, Accommodation and Food Services saw an increase of 1,401 individuals claiming unemployment insurance from 2014 to 2018 followed by Health and Social Assistance and Retail Trade. From 2018 to 2020, many occupations saw a substantial decrease in claims; however, Educational Services (115%), Administration and Support/Waste Management and Remedial Services (38%), Transportation Warehousing (101%), and Manufacturing (15%) were among those that saw an uptick in claims.

   Table 40 - Characteristics of Unemployment Insurance Claimants

Source: ETA, Characteristics of the Unemployment Insurance Claimants, June 2014, 2018, and 2020.

    iii. Education and Skill Levels of the Workforce

Provide an analysis of the educational and skill levels of the workforce.

According to estimates from the U.S. Census Bureau, there are around 2.39 million individuals over the age of 25 in Puerto Rico, of which 46.1% are males and 53.8% are females. From these, 52.9% have a high school degree or less while the remaining 47.1% have some college/associate degree, bachelor’s degree or higher. Approximately a third of the male population has achieved 12^th grade (no diploma) or less. However, almost 30% of women have completed a bachelor’s degree or more compared to around 20% of men.

    Table 41 - Percentage of population 25 years and over by sex and educational attainment, 2017

Source: ACS 5-year estimates, 2017.

By educational level, unemployment is concentrated among those with a post-secondary/technical/vocational preparation, while those with a bachelor’s degree and higher have lower unemployment.

On the other hand, among those employed have a higher level of education. In other words, the higher the level of education, the lower the probabilities of being unemployed.

Slightly below a third of the population over 25 lives in the following regions: Caguas-Guayama (11.7%), San Juan (10.5%), and Manatí-Dorado (8.3%). The Noroeste region has the highest percentage of individuals over 25 who have less than a high school diploma with 32.3% while Sur Central has the highest population of high school graduates in all the regions with 34.9%. In addition, Carolina, with 26.7%, has the largest percentage of individuals who have some college or an associate degree and 35.5% of San Juan’s population has a bachelor’s degree or greater, the highest one in all regions.

  Table 42 - Percentage of population 25 years and over by local area and educational attainment, 2017

Source: ACS 5-year estimates, 2017.

The relationship between the progression in educational attainment and poverty status is telling in terms of gender. A significant improvement in poverty status is achieved by males from non-high school level to high school and successively when progressing onto postsecondary and higher education levels. For females, the leap comes only after higher education attainment when the drop-in poverty status magnifies in relation to just attaining post-secondary education below a bachelor's degree. Nevertheless, still at this level males fare better.

   Table 43 - Poverty rate of population 25 years and over for whom poverty status is determined by sex and educational attainment, 2017

 Source: ACS, 5-year estimates, 2017.

However, when assessing the estimates for median earnings by sex and education, one notes that men earn more than women in all categories by education. This is particularly true for higher education levels where women outnumber men. The salary difference between both genders for “graduate or professional degrees” is $14,306 and $7,057 for “bachelor’s degree”. Furthermore, the earnings gap narrows as the education level decreases and vice versa.

 Table 44 - Median earnings ($) of population 25 years and over by sex and educational attainment, 2017

 Source: U.S. Census Bureau, 2017 American Community Survey 1-Year Estimates.

   iv. Skill Gaps

 Describe apparent “skill gaps”.

It is undeniable that the Puerto Rico labor market faces many difficulties caused by internal and external factors. Low participation rate and high unemployment prove that labor supply and demand do not match adequately.  The government of Puerto Rico has important strategic initiatives, including an aerospace cluster, science and technology clusters, international insurance center, international financial center, Ponce’s Port of the Americas, and Act 20 for service exports, among others. Such initiatives will demand jobs in certain industries and occupations in the next years. These new jobs will require different education requirement and skills.

According the PR Department of Labor projections. By year 2026, the occupations expected to growth will demand 28,411 new jobs. Almost 36% of these new jobs will require high school diploma or equivalent, 34% will require no formal education, and 15% will require a bachelor’s degree.

    Table 45 - Education requirement in growing occupations, 2016-2026

 Source: PRDOLHR, Long-Term Projections, 2016-2026

   Table 46 - Top 30 occupations by projected increase and postsecondary skills, 2016-2026

 Source: PRDOLHR, Long-Term Projections, 2016-2026