Planning Board study reveals benefits of salary increases in PR
By The Star Staff
The Puerto Rico Planning Board (JP by its Spanish initials) revealed on Wednesday that more than half a million employees in Puerto Rico earn more than the established minimum wage, injecting an additional $116.6 million into the economy.
“The increase in the minimum wage had a positive impact on the Puerto Rican economy,” planner Julio Lassús Ruiz, the JP chairman, said in a written statement. “The majority of employees in Puerto Rico earn more than the minimum wage threshold, benefiting the population.”
The JP studied the economic impact of the wage increase, updating, reevaluating and issuing recommendations on increasing the minimum wage in Puerto Rico to $9.50 per hour.
In total, 553,924 employees in Puerto Rico earn above the legal minimum wage. It is estimated that 756,270 employees are covered by this law, impacting 202,474 workers who earned less than $9.50 per hour in 2023.
“To be competitive in hiring, employers have improved salaries and benefits,” the JP chairman said.
“The decision to increase the minimum wage requires considering multiple factors, including budget constraints and market dynamics,” the report states. “The increase was rigorously evaluated and is considered reasonable and sustainable.”
Based on a calculation of 36.3 hours per week and 52 weeks per year, this translates to an additional payroll of $220,006,575 per year, or $116,554 per hour.
The sectors most affected by the change include administrative services at 27.2%, retail trade at 19.3%, and lodging and restaurants at 15.7%. The least affected are utilities, finance and insurance, and arts and entertainment.
Gov. Pedro Pierluisi Urrutia promoted Law No. 47-2021, known as the Minimum Wage Law. The legislation affects the majority of workers, excluding certain categories such as farmers, municipal employees, and others.
The law has staggered the wage increase and has established a “Minimum Wage Evaluation Commission” to review the minimum wage every two years. In 2022, the salary was increased to $8.50 per hour and this year to $9.50.
“The wage increase improves compensation and benefits for employees, reduces income inequalities and improves quality of life,” Lassús Ruiz said. “It reflects the government’s commitment to fair practices and committed workers.”
The full study can be found on the jp.pr.gov website.