New Bill Could Rip off Millions of Minimum Wage Workers

May 19th 2016

Alex Mierjeski

Lawmakers in the Capitol may have found a solution to Puerto Rico's multi-billion dollar debt and a looming humanitarian crisis after months of negotiation — but there's one provision that some say could string up an already hurting population on the island.

Puerto Rican and American Flags

In a new draft of a debt relief bill released late last night, newly hired minimum wage workers under the age of 25 could be paid less than the federal minimum wage of $7.25 per hour.

Republicans in the House of Representatives and Democratic leaders have squabbled over a relief package for the U.S. territory for weeks. But language in the new Puerto Rico Oversight, Management and Economic Stability Act — which came out of the Republican controlled House Natural Resources Committee — was apparently sufficient for Democrats.

"After long bipartisan negotiations, we believe we have achieved a restructuring process that can work," said Democratic Leader Nancy Pelosi in an emailed statement.

However, she warned that "extraneous minimum wage and overtime rule provisions" would "harm working families[.]" Under the new bill, Puerto Rico's governor would be able to lower the minimum wage to no less than $4.25 per hour for four years. New overtime pay rules would not apply in Puerto Rico, either.

According to Bloomberg reporter Justin Sink, White House Press Secretary Josh Earnest said that the White House supports the bill, even though the minimum wage provision is "mean spirited."

However, committee members argued in a press release that a lower minimum wage, which would make Puerto Ricans the cheapest labor in the country, would theoretically open up more job opportunities and make the island more competitive "among neighboring islands where lower-wage labor is readily available.

The new bill comes at a crucial hour for Puerto Rico. The territory has already defaulted on some of the $70 billion in debt it owes, all while their 3.5 million U.S. citizensare bogged down with a 45 percent poverty rate, Reuters reported — nearly triple the national average, according to census data.

House Speaker Paul Ryan said in a statement that the new bill would provide relief to the island while protecting U.S. taxpayers from bailing out billions in debt, The Hill reported. Conservative Republicans have voiced concern that the relief package would place burdens on taxpayers.

The latest draft of the bill doesn't send taxpayer money to the beleaguered island; instead, it would allow the island “a legal out similar to bankruptcy,” according to The Wall Street Journal.

Lawmakers say they would like to see the bill pass through the House and Senate before July 1, when Puerto Rico would likely default on a $2 billion payment.