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Puerto Rico Report: Dwindling Populations in US Territories

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Between 2010 and 2020, three states saw decreases in population: West Virginia, which lost 3.2% of its people; Mississippi, the population of which fell by .2%; and Illinois, which lost .1% of its residents. The remaining 47 states all grew.

Not so the territories. The United States has five inhabited territories, and all of them saw dwindling population numbers.

  • U.S. Virgin Islands −18.1%
  • Northern Mariana Islands −12.2%
  • Puerto Rico −11.8%
  • American Samoa −10.5%
  • Guam −3.5%

The Washington Post recently wrote about this population drop in the territories, wondering why five territories which are geographically and culturally distinct from one another should share the population drop.

Section 936?

While the Post acknowledged that they got a range of different answers when they searched for an explanation, one of the factors they thought might help explain the loss was Section 936.  After some research, they concluded that the termination of Section 936 did not tell the whole story.  Congressional oversight over the years has confirmed that Section 936’s end cannot be blamed for the population loss.

The End of Section 936

Section 936 was an aggressive tax incentive that allowed multinational companies to wash profits through Puerto Rico without creating jobs or investing in infrastructure.

“While not all policymakers agree,” observed the Post, some analysts had concluded many years ago that the end of Section 936 combined with the rise of offshoring to China caused pharmaceutical companies to leave Puerto Rico. The expiration of a number of drug patents was another factor that added to some leave-taking among pharma companies; however, Puerto Rico continues to be the largest U.S. exporter of pharmaceuticals.

“The declining population of Puerto Rico in part is due to the economic crisis created by the elimination of Section 936,” they quote a Chinese economist as saying.

Yet a report from the Senate Finance Committee shows that jobs in pharmaceuticals manufacturing declined by just 1.1% during the phase-out of Section 936, making it implausible that this was a central part of the population drop in Puerto Rico. Obviously, it did not cause the equivalent drops in the other territories, which did not have Section 936.

Falling birthrates and aging populations

Puerto Rico has one of the lowest fertility rates in the world, a severely declining birthrate, and an aging population. Like some independent nations in Europe and Asia, Puerto Rico no longer has enough people of working age to support its aging population.

Factor in the lack of medical funding and the fragility of the healthcare system, and Puerto Rico is not in a good position to care for its elderly. SSI, a supplement for disabled elderly people, is not available in Puerto Rico or the other territories (except for the Northern Mariana Islands), leaving the neediest residents at a greater disadvantage than in any state.

The Post points out that the territories end up in a vicious cycle as their populations dwindle. A shrinking tax base reduces services and amenities, young people see better opportunities in the states, people of working age leave, and the tax base shrinks further. With fewer young families and fewer children, the future is increasingly uncertain.

Climate risk

Hurricane Maria destroyed much of Puerto Rico and left residents in many parts of the Island without electricity for months. Hurricane Fiona has left hundreds of thousands without power or running water.

Not only are hurricanes a threat to life on the island territories, but they are also seeing erosion, flooding, and loss of land mass. Experts have long suggested that “climate refugees” will be displaced by climate change in their homes and forced to move elsewhere.

For residents of U.S. territories, the United States is an easy elsewhere to move to. As citizens (or nationals, in the case of American Samoa) of the United States, territory residents are able to move to a state at will. Once they arrive, they can vote in presidential elections, receive federal benefits, and work or study freely. The territories’ losses are the states’ gains.

The post Dwindling Populations in US Territories appeared first on Puerto Rico Report.

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