An Island Shrinking: Puerto Rico’s Labor Crisis as Migration Squeezes Wages

PUERTO RICO — Early Monday morning, July 20, federal agents interdicted two separate maritime smuggling ventures on east and west coats of the island of Puerto Rico, apprehending a total of 37 undocumented migrants and one U.S. citizen in a single day.

On the island’s eastern coast, Air and Marine Operations and Border Patrol agents intercepted a vessel smuggling 10 migrants — from the Dominican Republic, India, and Ecuador — along with the U.S. citizen operating the boat, on a run from St. Thomas in the U.S. Virgin Islands to Culebrita Island.

Simultaneously, on the western end of the island, federal agents working with the Puerto Rico Police Department’s Maritime Unit, the Cabo Rojo Municipal Police Department, and Homeland Security Investigations apprehended 27 migrants from Uzbekistan, Tajikistan, the Dominican Republic, and Haiti after a makeshift vessel made landfall.

Not an Isolated Event

The July 20 operation fits a well-established pattern this year, not an outlier. On May 9, CBP’s Air and Marine Operations intercepted a yola-type vessel off western Puerto Rico carrying 64 migrants — 58 from the Dominican Republic and six from Haiti.

On June 6, a 30-foot boat carrying 40 migrants from the Dominican Republic, Haiti, and Uzbekistan was intercepted near Desecheo Island; a nearly identical interdiction of 40 migrants near the same island followed just over a week later.

In late May, Coast Guard and Homeland Security partners apprehended eight stowaways, four Chinese and four Dominican nationals, aboard a barge being towed into San Juan Harbor.

Puerto Rico remains an active maritime corridor for smuggling migrants into U.S. territory given its geography and proximity to other Caribbean nations, and these operations are occurring for frequently as unprecedented federal enforcement continues to carried out nationally on the U.S. mainland.

But the deeper economic story shaping the island of Puerto Rico — acquired from Spain in 1898 and later designated as a U.S. commonwealth in 1952 — isn’t found in any single interdiction. It requires looking at two migration forces at once: a decades-long exodus of Puerto Ricans to the mainland that has hollowed out the island’s tax base, and a steady, decades-long inflow of low-wage labor, heavily concentrated at the undocumented end, that has kept wages stagnant for the native workers competing in the same narrow band of jobs.

A Shrinking Island

Puerto Rico’s population fell 11.8% between 2010 and 2020, from roughly 3.7 million residents to about 3.3 million — one of the steepest sustained population declines of any U.S. jurisdiction over that decade.

The exodus accelerated sharply after Hurricane Maria devastated the island in 2017, with an estimated 97,000 people leaving that year alone. More recent data shows the pattern persisting, if narrowing: in 2024, roughly 25,000 people moved to Puerto Rico from the mainland, while approximately 38,000 residents left — still a net loss.

This sustained outflow carries a dramatic fiscal cost for the island’s shrinking population, a negative cycle that compounds on itself. A shrinking population means a shrinking labor force, which erodes the island’s tax base — compounding the fiscal strain Puerto Rico has struggled with since its government debt crisis began accumulating in the 1990s and 2000s.

Every working-age adult who leaves is another taxpayer and a consumer that the local economy no longer has, while pension and public-service obligations built for a larger population remain largely fixed as residents continue to age into the later years of their lives.

A Different Way to Read the Wage Effect

Academic research on Puerto Rico’s migration flows, including a peer-reviewed study in the Journal of Human Capital, has found that the island’s out-migrants — Puerto Rico-born residents leaving for the mainland — tend to be relatively low-skilled, while its in-migrants tend to be relatively high-skilled. That specific finding doesn’t map cleanly onto the debate over undocumented Dominican and Haitian labor, which is overwhelmingly low-skill, not high-skill.

But a simpler, more direct logic follows from the same underlying facts. If large numbers of low-skilled Puerto Rican workers are genuinely leaving the island — as the outmigration data shows — then a simultaneous inflow of low-skilled labor from the Dominican Republic and Haiti would not necessarily be adding new pressure on top of a stable labor supply. Instead, it would be filling the gap that departing native workers left behind.

The practical effect of that kind of replacement isn’t obviously wage suppression in the sense of pushing pay lower than it otherwise would be — it’s closer to wage stagnation: the labor supply in low-skill sectors stays roughly full even as native workers leave, which prevents the kind of upward wage pressure that a genuine, uncompensated labor shortage would otherwise produce. Native workers who stay don’t see the raise that a shrinking labor pool might otherwise have delivered, because migrant labor is quietly absorbing the slack.

What is also worthy of pointing out is a recent publication by an outlet in the Dominican Republic (Dominican Today, 2023), citing a CUNY-affiliated study finding Dominicans in Puerto Rico earn on average, less than the general population (~$11,245/year average vs. ~$13,519 for Puerto Rico overall, 2016-2020), with especially high poverty among Dominican women and children, which will ultimately contribute to the weakening purchasing power of local inhabitant in the island’s communities.

A Labor Market Already Under Strain

Whatever the precise mechanism, the pressure lands on a workforce already disproportionately concentrated in low-wage employment. Research on Puerto Rican workers has found that, among Latino groups, Puerto Ricans are second only to Dominicans in the share of workers classified as low-wage, running nearly double the share of white, Asian, and Mexican workers.

A labor force this exposed to low-wage conditions has little room for the kind of wage growth that a genuine, uncompensated labor shortage would typically produce — and if migrant labor is filling the space left by departing native workers, that growth may simply never materialize.

Reading the Forces Together

Puerto Rico’s economy is caught between two migration pressures that don’t cancel each other out so much as interact in a less dramatic, harder-to-see way.

Sustained outmigration shrinks the tax base and drains the labor force of workers the economy needs to sustain public services and pension obligations. At the low-wage end, in-migration — including undocumented arrivals from the Dominican Republic, Haiti, and increasingly Central Asian nationals like those apprehended this month — appears to be filling much of the gap that departure leaves behind, which may do less to actively suppress wages than to simply prevent them from rising.

Interdiction operations like this month’s off Culebrita and Cabo Rojo address the enforcement side of that equation, intercepting new arrivals before they reach shore. But they don’t touch the deeper structural dynamic already in motion: a native low-wage workforce leaving the island in large numbers, and a migrant low-wage workforce arriving to take its place, leaving overall labor-market conditions for those who remain largely unchanged.