Summary Background

INDUSTRY SECTORS

% Employed in Manufacturing

15.2%

 Southern Puerto Rico EDD

Unemployment Rate

8.3%

 Southern Puerto Rico EDD

% Employed Retail Trade

23%

Southern Puerto Rico EDD

Labor Force Participation Rate

82.5%

Southern Puerto Rico EDD

At present16, the economy and employment base of the SPREDD region is represented in Table 4. Manufacturing has the highest wage base, followed by Public Administration.

The highest percentages of the workforce are employed in Public Administration and Retail. Manufacturing also continues to be a significant component of the workforce, comprising 12% of the workforce, and providing the most significant wage base. The largest employers in the region are outlined in Table 5. The data is the latest available from the Puerto Rico Department of Labor made available to SPREDD, which is as of Q3 2019.

Based on the Q3 2019 data, the largest private employer in the SPREDD region is CooperVision, manufacturer of contact lenses at its facility in Juana Díaz. According to CooperVision’s latest annual report, its facility in Juana Díaz is 527,285 square feet and represents its second largest global facility. In addition to manufacturing, CooperVision also performs research, development and distribution at its Juana Díaz facility.

The second-largest private employer in the region is Point Blank Protective Apparel (PBPA), which produces military uniforms at its facilities in Guánica. The LQ (establishments) for Guánica for NAICS 315210, Cut and Sew Apparel Contractors is 36.58. The Berry Amendment (USC, Title 10, Section 2533a), restricts the Department of Defense (DoD) from using funds appropriated or otherwise available to DoD for procurement of food, clothing, fabrics, fibers, yarns, other made-up textiles, and hand or measuring tools that are not grown, reprocessed, reused, or produced in the United States. Items produced or assembled in Puerto Rico are Berry Amendment compliant.

Another significant employer noted in Table is U.S.S.C. Puerto Rico, Inc., which is part of Medtronic (NYSE:MDT), which develops, manufacturers and markets medical devices.

The highest LQ noted was 3.2 for the Utility sector, as the primary electricity-generating assets for all of Puerto Rico are located in SPREDD’s region. The second highest LQ was Public Administration. Because government services are not likely “exported” from the region, as may be the case with a capital city, this may be a sign of excess employment in this sector. Comparable data on municipal employment on a per resident basis also indicates over-employment in the sector. For example, the Autonomous Municipality of Ponce is the second-largest employer in the region, with 2,226 employees, or one employee for every 59 residents. According to CityStats, for cities with more than 60,000 residents, there is typically one employee for every 112 residents. Stakeholders have noted over-regulation and a burdensome permitting process are hinderances to economic development.17

The six municipalities comprising the SPREDD region have withstood an enduring recession, multiple natural disasters, outmigration of talent, a pandemic, high unemployment, high poverty, and are further burdened with an inability to enter the capital markets because of the on-going Title III reorganization under PROMESA. Despite these extreme challenges, the region has underutilized assets that can be keys to building an enduring economy. There is significant need for the enhanced cooperation and capacity building made possible by an EDD. The Health and Social Services sector has considerable establishments and employees; however, it does not register as a “traded” sector, meaning the LQ > 1. 

Table 4: Summary of establishments with employees, employment, and wages in the six municipalities represented by SPREDD. Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages Q3 2020.

16 The data is as of September 30, 2020, which is the latest available from BLS.

17 One of the most recurring themes from stakeholder interviews and surveys was the “excessive” bureaucracy and “broken” permitting process. This does not reflect the opinion of the authors of this CEDS, but the comments received from stakeholders.

Chart 9 below presents the sectors by means of their employment and associated Location Quotient (LQ). The LQ represents a way of quantifying how concentrated a particular industry, cluster, occupation, or demographic group is in a region as compared to the nation. Typically, an LQ > 1.0 indicates a particular product or service is exported, whereas an LQ close to 1.0 means is it sufficient, and an LQ < 1.00 may indicate a particular industry’s goods or services are imported.

Chart 9: SPREDD Employment and LQ; Q3 2020 Source: U.S. Bureau of Labor Statistics QCEW

Table 5: Largest Employers in SPREDD Region. Source: Puerto Rico Department of Labor Q3 2019