Congress Can Help Puerto Rico Escape the Food Stamp Poverty Trap

Each year, the U.S. Congress allocates over $400 million for food assistance to support more than 250,000 residents of Puerto Rico who are able-bodied adults without dependents, and are between the ages of 18 and 54. Notably, this financial assistance does not come with a work obligation. Congress does not apply this approach to any of the 50 states, the District of Columbia, or even to Guam and the U.S. Virgin Islands. Beneficiaries of nutritional assistance in these jurisdictions are under the Supplemental Nutritional Assistance Program (SNAP), which includes a work requirement. It's time to bring Puerto Rico into the same program.

Puerto Rico began participating in the Food Stamp Program in 1974, transitioning to an $825 million annual block grant in 1982 under the Nutritional Assistance Program (NAP), catering to 1.69 million residents. Presently, it operates on a $2.8 billion grant, supporting over 1.33 million residents—a higher per capita participation in the food assistance program than any of the 50 states. With a population of 3.3 million in 1982 and 3.2 million today, there has been only a 9.6 percent reduction in total beneficiaries. Meanwhile, the expenditure per participant has more than quadrupled, rising from $488 to $2,117.

Puerto Rico has one of the world's lowest labor participation rates, never surpassing 50 percent. Over the last decade, the average rate has lingered at 40 percent. It is the fifth-most challenging place globally to hire employees, with an estimated shortage of 40,000 workers needed for the approximately 2,000 housing, infrastructure, and energy construction projects tied to federal disaster recovery funds. The number of able-bodied adults without dependents in Puerto Rico living on mantengo (handouts) without a work requirement represents an additional 25 percent of the island's civilian labor force.

Arguments against Puerto Rico's inclusion in SNAP focus on its estimated $1.5 billion cost (within a Farm Bill costing approximately $1.5 trillion over 10 years). The study "From NAP to SNAP: A Bridge to Economic Liberty for Residents of Puerto Rico" estimates that in Puerto Rico 266,000 able-bodied adults without dependents would be removed from the program under SNAP's work requirements. Phasing out these able-bodied participants results in $675 million in annual savings and $1.1 billion annually in Social Security contributions. These benefits alone outweigh the cost, not to mention potential reductions in other social programs as these individuals attain greater economic independence.

trampa de la pobreza

RIO GRANDE, PUERTO RICO - MARCH 10: The flag of Puerto Rico blows in the breeze during the final round of the Puerto Rico Open at Grand Reserve Golf Club on March 10, 2024 in Rio Grande, Puerto Rico. ANDY LYONS/GETTY IMAGES

Furthermore, the inherent return on investment of SNAP becomes evident when one considers that 75 percent of all food and beverages consumed on the island are imported from the U.S. mainland. Puerto Rico is the third-largest importer of U.S. products in the Western Hemisphere, with a substantial $6.5 billion in imports recorded in 2019 alone. Over 15 states producing meats, grains, dairy, fruits, and vegetables would experience a significant and direct economic boost from the impact of SNAP in Puerto Rico, as this money will consistently return to the U.S. every year.

NAP is a detrimental policy, one that has failed both U.S. taxpayers and the people of Puerto Rico. Too many individuals, spanning generations, still rely on it. In fact, it may even function as a "poverty trap," discouraging individuals from working due to the risk of losing benefits if they surpass the defined income level. Under NAP, there is neither a need nor an incentive for people to work, as the unemployed receive more benefits than the employed. This 40-year-old block grant was not designed to be a temporary social assistance program, unlike SNAP.

A Congress committed to maximizing the value of U.S. taxpayer money should stop incentivizing dependency and put an end to the poverty that NAP has perpetuated over 40 years in Puerto Rico. With its work requirement, SNAP is undoubtedly a more effective tool to empower food assistance beneficiaries on the island to break free from the unemployment trap and enter the workforce. This transformative shift will expedite Puerto Rico's recovery efforts and set more than 250,000 U.S. citizens firmly on the path to economic liberty and sustained flourishing.

Jorge L. Rodriguez is Founder and CEO of the Puerto Rico Institute for Economic Liberty, and an engineer and entrepreneur with over 35 years of experience in the private sector.

This OpEd was originally published in Newsweek.

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