Austerity or a New Deal for Puerto Rico?

New Deal money at work, providing medical services.


New Deal money at work, providing medical services.

The unemployment rate for Puerto Rico is currently 12.6%. The island is also $72 billion in debt. And Republicans in Congress are opposed to providing the territory with the same type of bankruptcy protections that are available to the states. To address Puerto Rico’s economic problems, some officials and analysts have been promoting austerity measures—for example, reduced college funding, weaker labor laws, lower health care expenditures, teacher layoffs, and higher sales tax. The adoption of these austerity recommendations will disproportionately burden the middle-class and poor. And so we might ask: Is there an alternative approach to the island’s economic problems?

 

Precedent exists. In the late 1920s and early 1930s, Puerto Rico was rocked by the Great Depression and two devastating hurricanes that destroyed many of the island’s buildings and homes. Its economy was left in tatters. New Deal policymakers addressed these problems by increasing food assistance, enhancing medical services, employing the jobless, and building up infrastructure.

New Deal workers dig a water line in San Juan.


New Deal workers dig a water line in San Juan.

Indeed, the contrast between the New Deal approach and the austerity approach could not be more astounding. Starting in 1933, the Federal Emergency Relief Administration (FERA) provided funding for new schools, new hospitals, new infrastructure, and public works jobs for the unemployed. Later, the Puerto Rico Reconstruction Administration (RA) did the same, and for a longer period of time. Meanwhile, the Civilian Conservation Corps (CCC) hired thousands of Puerto Rican men to plant trees, reduce erosion, and build fish hatcheries. The National Youth Administration (NYA) helped hundreds of young men and women complete their high school and college education. The Public Works Administration (PWA) and the Works Progress Administration (WPA) put many thousands to work building roads, improving airports, and bolstering national defense. In 1936, the Federal Surplus Commodities Corporation provided Puerto Ricans with 970 tons of flour, 440 tons of rolled oats, 25 tons of dried beans, 105 tons of onions, 90 tons of dried peas, and 150 tons of dried prunes. During fiscal year 1940 it provided about 428 tons of food to school lunch programs, feeding tens of thousands of children.

 

New Deal assistance & investment improved the quality of life for Puerto Ricans for many decades after the New Deal. It’s an important historical lesson, and it’s worth considering today.

 

Facts & figures from: (1) Second Report of the Puerto Rican Emergency Relief Administration, from September 1, 1934, to September 30, 1935 and Report of the Federal Emergency Relief Administration for Puerto Rico, from October 1, 1935, to June 30, 1936, Washington, DC: U.S. Government Printing Office, 1939. (2) “Facts about the Puerto Rico Reconstruction Administration,” New Deal Network, http://newdeal.feri.org/pr/pr10.htm, accessed July 22, 2015. (3) Perry H. Merrill, Roosevelt’s Forest Army: A History of the Civilian Conservation Corps, 1933-1942, 1981. (4) Federal Security Agency – War Manpower Commission, Final Report of the National Youth Administration, Fiscal Years 1936-1943, Washington, DC: U.S. Government Printing Office, 1944. (5) Public Works Administration, America Builds: The Record of PWA, Washington, DC: U.S. Government Printing Office, 1939. (6) Federal Works Agency, Final Report on the WPA Program, 1935-43, Washington, DC: U.S. Government Printing Office, 1946. (7) Federal Surplus Commodities Corporation, Report of the Federal Surplus Commodities Corporation for the Calendar Year 1936, Washington, DC: U.S. Government Printing Office, 1937. (8) Federal Surplus Commodities Corporation, Report of the Federal Surplus Commodities Corporation for the Calendar Year 1936, Washington, DC: U.S. Government Printing Office, 1940.

 

 

Brent McKee is a Living New Deal Research Associate (the first, in fact!) and core member of the LND team. He lives in West Virginia

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