Should Puerto Rico Become the 51st State of the United States of America?
By: Luke Martin and Nikki-Lynn Marshall.
A major point of contention in the 2012 US election was the possibility of Puerto Rico achieving statehood. Such an action has been considered numerous times in the past few decades, but 2012 marks the first time that the referendum has proven to be successful, making such a discussion more critical than ever. However, before any legislation can be pursued the social and economic ramifications of Puerto Rico becoming the 51st state must be thoroughly examined.
In terms of the benefits of Puerto Rico’s statehood, political parties and businesses alike are envisioning the future economic benefits of a Puerto Rican state. Not only do both democrats and republicans support Puerto Rico’s statehood, but president Obama has publicly expressed his support for Puerto Rico’s statehood. In his article ‘Make Puerto Rico a state: it’s good for business’, Gregg Easterbrook argues that Puerto Rico should be the 51st state because such a move would have a positive economic impact on both the US and Puerto Rico. He points out that Puerto Rican citizens already enjoy a number of the benefits afforded to Americans, such as the ability to freely move to the US. A formal move towards statehood would allow the US to collect not only income taxes from residents, but also corporate taxes from businesses operating in Puerto Rico. From a political standpoint he also points out that such an action would extend the democratic process in the US, as Puerto Ricans would be able to vote in US elections and would contribute the same amount of electors as Oregon (7).
When examining the positive effects of Puerto Rico’s statehood, Hawaii is often used as a parallel case, credited as a success. Many argue that the example of Hawaii proves that allowing an economically weak country to become a state can benefit both the US and the state itself. Prior to its statehood in 1959, Hawaii was an economically weak country, lacking in economic growth as well as public institutions. However, in 2012, Hawaii now boasts one of the highest GDP per capita’s of the US states and has significantly contributed to the US economy through it’s image as a safe, US tourism destination. Thus, many argue that allowing Puerto Rico to become a state will reform Puerto Rico economically, as well as contribute to the overall US economy.
The negative impacts of Puerto Rico statehood however must also be considered. While a small majority voted in favor of Puerto Rico gaining statehood it was in an unbinding referendum with dubiously constructed questions. In all prior referendums in 1967, 1993 and 1998, the proud islanders voted against becoming a state. The social and economic implications may suggest statehood is not in the best interest for either the USA or Puerto Rico. Economically Puerto Rican’s median household income is half of the poorest American state. This would likely necessitate an increase in government aid and other social services. And in a slowly recovering economy, government spending needs to be frugal in order to diminish the national debt. The Puerto Ricans themselves may have personal reservations for wanting to join the USA. As it currently stands the citizens of Puerto Rico do not pay federal income taxes. Obviously as a state they would be obligated to pay taxes and thus receive less income.
The social dilemmas of Puerto Rico joining the USA are also substantial. Many Puerto Ricans fear that becoming a state would catalyze an erosion of the unique Puerto Rican culture. Their language, food, and customs would all suffer a pervasive infusion of American influence. America is known as the melting pot, and Puerto Ricans fear that their culture would vanish like the Native American tribes before them. Another concern is that just 20% of Puerto Ricans speak English fluently, thus, many wonder how Puerto Rico can assimilate when so few speak English and their culture is so unique.
The island of Puerto Rico has been in a statehood purgatory for over a century. Up until the 2012 referendum the Puerto Rican people had been content to walk the line between territory and statehood. But it seems now Puerto Rican’s yearn for official statehood. And it is our opinion that it would be in both the US and Puerto Rico’s best economic and social interests to embrace each other with open arms.
Discussion (3) | December 2nd, 2012 Categories: Government Policy
Inequality Across the Globe
By:Alyssa Dizoglio and Franziska Meinherz.
According to the article “For richer, for poorer” in The Economist, socioeconomic inequality is one of the largest growing problems of our time. Unfortunately, is not a problem that will easily go away. The inevitability of inequality is more evident than ever. Comparing the first American Gilded age to the second, it would seem that inequality had diminished instead of increased. During the first Gilded Age, the wealthiest Americans, like George Vanderbilt II, had estates that were 300 times larger than the average American dwelling. However by the second Gilded Age, the gap had narrowed, and even some of the wealthiest individuals’, like Bill Gates, homes are only a mere 30 times larger than the average modern American home. However the improved living standards of the middle and working classes masks the dramatic concentrations of wealth held by the top 1% in America, a figure that has only increased over the past 30 years; the share of national income held by the richest 1% has doubled since 1980. Furthermore, the share of income going to the top .01% has quadrupled. It is hard to look at these figures and not see the inevitability of inequality.
While the concentration of wealth at the top is certainly staggering in America and many countries across the world, this does not mean that the entire world has become more unequal in the past 30 years. In fact, global inequality has begun to fall recently as poorer countries converge (catch up) with richer ones. In the 19th and 20th century, global inequality increased as richer countries industrialized, allowing them to grow faster than poorer countries. More recently though, that pattern has shifted and global inequality has started to fall despite the fact that inequality within many countries has only risen.
When inequality first started to rise after industrialization, people weren’t all too worried about it. Simon Kuznet suggested an inverse U shaped correlation, known as Kuznet’s Curve between economic growth and inequality saying that inequality first rises with the beginning of industrialization, but that it then starts to decrease because society wants social policies to be implemented. Kuznet’s prediction seemed to hold until about the 1980’s when inequality started to rise again. Despite the rise in inequality, politicians, economists and the general society remained largely unconcerned with the issue. Only around 2001 with the dotcom bubble and subsequent recession did inequality become a top political issue perceived as potentially dangerous. Not only did fairness become an important concept, but the possibility that inequality leads to political instability became obvious. This had already been proved in earlier decades in Latin America, which had long been the most unequal continent, and which also experienced much political turmoil throughout its history.
While some societies are more concerned about the potential of increasing inequality than others, the reality is that increasing inequality is inevitable without some sort of government intervention. The article suggests that the problem can be solved by prohibiting abuse of financial resources through cronyism, which is certainly true in areas such as Latin America. However, not even in these countries would this policy be enough to keep inequality from rising further on a global scale nor would it serve to lift the poorest of society up from the rest, especially when considering that in many countries, the US included, nepotism and other forms of corruption are not the main cause of inequality. It is very unlikely that without government policies regarding income distribution the problem of inequality can be solved.
Discussion (1) | December 2nd, 2012 Categories: Growth
American Misconception on Immigration
By: Adrian Nardella and Fiona Maguire.
Edited by: Luay Kanaan.
From Italians and Slavs in the early 1900’s to Central and South Americans in the late 90’s early 2000’s, the concept of immigration in the U.S. has managed to maintain its political prominence due its substantial impact on economic strength, native employment rates and wages.
For some, immigration is seen as a growing concern to the nation; however, the article “Immigration and American Jobs,” written by Eduardo Porter of The New York Times proves this stigma untrue. Immigrants, generally, are employed for manual labor in-part due to their inability to obtain the qualifications and skills held by native employees – thus leaving more specialized and verbal jobs such as being a clerk Americans. These manual labor positions often pay lower salaries, but they act to “reduce the prices of some products and services by providing employers with a new labor source and creating more opportunities for investment and jobs.” Also, because the undesirable jobs such as being a dishwasher or landscape contractor are being performed by immigrants, higher paid positions are created for qualified natives to fill.
However, immigrants influencing the cheap labor market have been under intense media/government and political scrutiny, especially during the Presidential race, because during economic hardships like the 2008 recession immigrants are seen to “steal” American’s jobs because they work for cheaper wages. Not understanding the positive effects immigration and cheap labor have on the long-term stability of the U.S. economy makes it easy for “proud” Americans to be misunderstood as xenophobic Americans.
This article, “Immigration and American jobs” relates back to what we have learned in class, regarding the topics of immigration and income inequality. In class, we discussed how when immigrants first begin to work in their new country, they earn a 17 percent lower wage than natives do. Then, within 15 years of coming to the new country, the immigrant’s wages overtake the natives and within 30 years of arriving to the country, these immigrants begin to earn around 11 percent more than the natives are, therefore stealing American jobs and money. However, this article explains that this is not the case of the poor immigrants that are coming from Latin America. Thus, these immigrants are either creating jobs for Americans or taking jobs that Americans are not willing to take such as the dishwasher at a restaurant.
These Latin American immigrants are not earning more than Americans are, as seen in the graph on a sign used for Occupy Boston portraying the average household income from 1979 to 2007. This graph shows how immigrants that are in the bottom 20 percent of the population in terms of income, tend to remain at the very bottom of the graph without any increases.
This article on immigration and its effects on American jobs explain how immigration can be seen from a different perspective. As Americans, we tend to think that immigrants are taking our jobs due to their willingness to work for low wages. However, immigrants are helping Americans create domestic jobs and at the very least accept the jobs that Americans do not want.
Discussion (1) | November 4th, 2012 Categories: Government Policy
Immigration and American Jobs
By: Jeff Taylor and Paulius Kosmarciukas.
Edited by: Jacob Beck.
This, “Immigration and American Jobs” by Eduardo Porter, article sheds new light on the issue of immigration to America, focusing on those who enter the US illegally from Mexico and South America. The prevailing argument for tougher border security and immigration control is the notion that these unskilled laborers come to the US to displace American workers because the immigrants are willing to work for less money. Mr. Porter posits that these unskilled laborers do not directly compete with the American laborers because unskilled labor jobs are not being taken away from anyone.
However, a number of Americans believe that incoming immigrants, in fact, do take jobs away from currently employed Americans, forcing native workers into unemployment. Not only do immigrants take the jobs away from Americans, but they also put undue strain on the social institutions by “free riding” in the healthcare system and avoid paying taxes. For example, sick or injured illegal immigrants go to the emergency room when hurt and cannot be denied treatment even if they do not have health insurance. Due to this, the tax-paying citizens end up picking up the unpaid hospital tab. In addition, immigrant families also strain the municipalities in which they live by overloading the school buses and classrooms with students whose families do not always pay property taxes.
While some of these points are quite valid, the effect of immigration on the US economy is overall positive. The article points out that it is quite a rare case that an immigrant worker directly displaces an American worker. As a result of this transition of jobs, the American workers must continue to better themselves by acquiring new skills or knowledge. This is part of a global, competitive market economy. From the employer’s perspective, cheap labor saves money by lowering operating costs for the entire business. Thus, the extra savings can be spent on investments in the growth of company, creating more skilled jobs for American workers. By displacing the American workers from the unskilled position, it forces them to learn and innovate, which promotes a healthier economic environment, and creates more skilled, educated American workers in upper-level management type positions. In the end, the immigrants end up contributing more to the long-term value of the United States economy than taking away value from the economy in the short term.
America is a country founded and built by immigrants. It must be remembered that immigration is the driving force behind the renewal process that defines America. Part of economic growth is replacing old job titles with new job titles. The upward trajectory of the American worker is in part driven by the fact that there are fewer unskilled jobs available. The American dream, the idea that anyone has an opportunity to better oneself and move up in society, is deeply rooted in this as well.
Instead of wasting federal and state budgets on border patrols and building higher fences to keep the illegal immigrants out of the country, that money should be spent on finding ways to make legal immigration more simple. By providing pathways to legal status, illegal immigration should decrease. In addition, these pathways will allow newly naturalized citizens to participate in the American society as many native born citizens already do, by paying taxes for their use of schools and healthcare.
Discussion (1) | October 28th, 2012 Categories: Growth
