Florida senator Marco Rubio introduced a bill on Tuesday that aims to help Puerto Rico's struggling economy with a "wage enhancement" plan.
Known as the Economic Mobility for Productive Livelihoods and Expanding Opportunity (EMPLEO) Act, it would establish an opt-in program allowing businesses to lower the minimum wage for new workers. In exchange, employers would receive federal subsidies to raise the salaries of employees currently making less than $10 an hour.
"With Puerto Rico's economy suffering from high unemployment and low wages, it's hard for many Americans on the island to make ends meet. My legislation would help these workers and their families by immediately boosting their pay and reducing the cost of hiring so it's easier to find a job," Rubio stated in a Tuesday press release.
"By expanding the workforce, increasing opportunity and making work pay more, we can help Puerto Rico get back on the path to growth and prosperity," he continued. "As a member of the Congressional Task Force on Economic Growth in Puerto Rico, I'm proud to have brought this idea to the table and encourage my colleagues to consider it as we prepare our final report."
The need for a solution is particularly dire for Puerto Rico, where 46 percent of its people fall under the poverty line. This, in turn, is the result of years of economic stagnation, driving the federal territory into major debt, a decrease in population, and increased unemployment. And as for current wages, the island technically follows the federal minimum of $7.25 an hour despite the lack of local income and productivity, according to the Wall Street Journal.
Rubio, for his part, has supported the policy before. In 2014, the senator made a speech about his strategy to fight against poverty, which included implementing wage enhancement on a national scale. The EMPLEO Act, however, marks the first time he has applied this particular idea to a bill.
Liberal economists have previously opposed Rubio's "wage enhancement" on the grounds that it did not take the realities of poor people into account.
"This sounds like he has no idea of the structure of programs and how they took the shape they did," said Dean Baker, co-founder of the Center for Economic and Policy Research, in a 2014 email to the Huffington Post. "His 'wage enhancement' would run into real problems for people working multiple jobs. Does he want to subsidize wages for people earning $36,000 a year by the same amount as someone earning $18,000 a year? … This is not close to being a serious plan to address poverty."
Rubio's supporters, however, think that the bill will be able to address some of Puerto Rico's economic problems.
By TATIANA LOZANO
"The proposal is a creative, compassionate, and market-based tool for addressing Puerto Rico's challenges," Oren Cass, a senior fellow at the Manhattan Institute, wrote in City Journal on Monday. "Reducing the minimum wage should create many more entry-level job openings and make hiring more attractive to employers. The subsidy also creates powerful momentum for on-the-books employment, …and it acts as an efficient and targeted fiscal stimulus, injecting money into the economy wherever employers believe low-wage hiring makes most sense."
"The proposal could mark a starting point for meaningful reform in mainland economic policy," Cass continued. "A wage subsidy alone won't solve that problem, but this type of idea—rethinking the shape of the low-wage labor market and government's role in it—is a step in the right direction."
Rubio Introduces Bill to Aid Struggling Puerto Ricans
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