Description: Puerto Rico’s minimum wage is set to rise to $10.50 per hour in July 2024, but how has the previous increase impacted workers, businesses, and the broader economy? The Puerto Rico Department of Labor & Human Resources, with analysis from ABEXUS Analytics, presents a data-driven assessment of wage policy effects from 2019 to 2023.

Key findings include:

• Minimum wage employment declined from 375,000 in 2019 to 244,000 in 2023, suggesting wage growth beyond legal mandates.
• After the wage hike, 19,000+ new workers entered the labor market, but over 10,000 left, raising questions about migration and workforce shifts.
• Small businesses outside the metro area faced the most significant challenges, with over 2,900 closures in 2023.
• Retail and food services remain the most affected sectors, with over 55% of employees earning minimum wage.
• Micro-simulation models predict potential inflationary effects and further employment shifts after the 2024 wage increase.

This comprehensive report balances the economic benefits and risks of minimum wage hikes, offering key insights for policy leaders, business owners, and workers.