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And oldtimers remember how things were in the '30s, when cane cutters worked from dawn to dusk for a dollar a day. That was before Luis Muñoz Marin began organizing the peasants, teaching them the magic of the ballot. Later, as the island's first elected Governor (1949-64), Muñoz launched Operation Bootstrap to in dustrialize what had been a weak agrarian economy. U.S. industry was lured by low wages, freedom from federal taxes and long-term forgive ness of local taxes. While the commonwealth's development agency, Fomento, catered to capitalists, successive administrations adopted a host of New Deal-style programs that made Puerto Rico the closest thing to a government-managed society in the U.S. system.
But Bootstrap had built-in dangers. While processing products for export, Puerto Rico became highly dependent on imports of all kinds (the trade deficit was $1.8 billion in fiscal 1975). Heavy external borrowing was necessary to keep development momentum going. Then, as wages rose and exemptions from local taxes expired, some labor-intensive plants fled to poorer Caribbean countries and to Asia. Hourly wages in manufacturing have recently been averaging $2.59 in Puerto Rico, compared with 700 in the Dominican Republic and $4.89 in the continental U.S. Partly be cause both legislated and negotiated fringe benefits are steep—a typical government employee gets three months of vacation, holidays and sick leave—productivity sagged and the cost of doing business soared.
Migration to the States provided one safety valve for many years. From 1950 to 1970, the exodus amounted to 615,000 people. That trend began reversing itself in 1971. In the following four years, migration to Puerto Rico from the main land added 143,000 heads to a society that was running out of hats. In addition, il legal aliens have been filtering in from poorer Latin lands. Density is 920 people per sq. mi., among the world's highest. A runaway birth rate (more than 50% higher than in the continental U.S.) helped push the island's population past 3.1 mil lion last fall. The annual population in crease is almost 2.6%. Only the federal food stamp program has prevented dire want; 70% of the island's families now receive precious cupones. Federal spending of all kinds has been increasing rapidly in Puerto Rico, from $922 million in fiscal 1973 to $1.47 billion in 1975 and an anticipated $2 billion in 1976—this in an economy with a G.N.P. of little more than $7 billion.
The little island's load of problems reached crisis proportions with the onset of the Arab oil embargo and the mainland recession in 1974. Wholly reliant on foreign oil for both its large petrochemical processing industry and consumer uses, Puerto Rico was hit even harder than the American Continent.
Puerto Ricans feel that the depression is now bottoming out.
Plant closings have diminished to the normal attrition rate, and new enterprises are beginning to pick up. Still, the official unemployment rate is 19.9%, almost three points higher than a year ago. Much worse, actual unemployment, counting in all those who are in part-time or seasonal jobs or too discouraged to seek work, is estimated at more than 35%. If the official figure is to go down to 12% by 1980, says Governor Rafael Hernandez Colon, Puerto Rico will need 42,000 new jobs a year.