Indices of the Puerto Rican Economy, 1940, 1953

This summary document created by the Puerto Rico Planning Board compares Puerto Rico’s economy in 1940 with 1953. These two chronologic “poles’ are especially important. In 1940, World War II had begun, but the US was far from entering the war directly. Puerto Rico was on the path to experiencing a heightening of its geostrategic role as part of the US’s hemispheric alliances and preparation for the war in Europe.

Governor Leahy, as documented by historian Rodriguez Berouf, helped prepare the colonial government for the likely deeper involvement of the US in the war and how the conflict might play out in the Caribbean. US strategy considered the impact of Nazi Germany’s U-boat operations and the impact of European politics and war in the Caribbean through the islands that were under UK and French rule.

Puerto Rico in 1940 has been described as rural, agricultural and still dominated by the sugar economy. The PPRA was extremely active in development and employment programs, and the military base construction of 194X, as documented by ?, had not yet begun.  

 

In 1953 Puerto Rico had begun its second industrialization program and the diversification of its state-supported agricultural economy.  The US/UN war in Korea was about to end, and the ELA had been recently approved by a constitutional convention, a referendum, and, after imposed revisions, by the US Congress.   The migration of Puerto Ricans (mostly to New York City) had slowed down somewhat, but the Labor-Department-sponsored seasonal agricultural worker program was growing, sending 20XXX to five states that year.

 

A few things stand out.

The Puerto Rican economy doubled in size in these thirteen years despite significant turmoil.  This is represented in the circa 100% growth in indexed terms of income and production (102% & 109%), an outstanding 7% yearly rate of growth.

The growth rates by sector are interesting.

Surprisingly, agriculture expanded significantly.

Manufacturing expanded by a factor of five roughly.  manufacturing plants also nearly tripled, with an employment growth rate nearly equal to the overall growth rate.

Other sectors grew as well: services and government by a massive fivefold.

The most surprising part is the construction sector. it expanded by 1430%.  The expansion of state supported activity, including schools and public housing probably accounted for a large part of the activity in this sector.

how was this incredible period of growth reflected in wages and salaries of people?  Net indexed Income expanded at a rate far higher than production (141%).   amazingly, in manufacturing, the scale of payrolls quadrupled.

Other people focused indexes also show revealing results.  the number of physicians more than doubled, while the number of teachers nearly doubled.  Enrollment in public education also nearly doubled, with spending per students tripling.

Profits grew but at a far lower rate, lower than the overall growth (97.9).

unemployment declined from nearly 18% to 10%, with a modest increase in the labor force (13k people).

asstes in banking tripled, while banking investments grew by a bizarre 2300%

 

There are important questions that emerge from this analysis.

• What part of the “industrial” process (especially in 1953) was linked directly (sugar production) to sugar cane or to sugar derivatives like rum?
• How much of the impressive decline in unemployment was rural and urban?