We still sometimes see claims that Puerto Rico should have a lower minimum wage than the states. Or that it is acceptable to have lower federal funding for nutrition assistance and medical care in Puerto Rico. The implication is that the cost of living is lower, so the wages should also be lower. But the cost of living in Puerto Rico is not actually lower than the cost of living in the states.
Overall cost of living
Generally, the cost of living in Puerto Rico is slightly higher than the U.S. average. A comparison between Orlando and San Juan, for example, shows that (without considering housing costs) daily life expenses in San Juan are about 7.4% higher.
One reason is that about 85% of groceries are imported are imported, leading to higher prices. Many household goods are imported, too, and clothing costs are usually higher in Puerto Rico. Electricity costs are notably high due to an aging infrastructure and reliance on imported fuel. Water and garbage collection are generally lower than on the mainland.
According to Zillow, the average rent in Puerto Rico is $2,350. However, the range of rental prices is extremely wide, from about $550 for an apartment in a smaller city to $50,000 a month at one listing in Dorado. Prices can be much higher in desirable neighborhoods or tourist areas and gentrification is pushing some people out of their customary neighborhoods.
Owning a car is common, and gasoline prices tend to be comparable to the U.S. average. Public transportation is available but may be limited in certain areas.
Healthcare costs are generally lower than on the mainland, particularly for those who qualify for government-sponsored plans. About 45% of residents are eligible for Medicaid. Public education is available, but private schools can be expensive. Higher education costs vary depending on the institution.
Economic factors
The cost of living varies considerably across the island. San Juan and its surrounding areas are generally the most expensive, while smaller towns and rural areas tend to be more affordable.
Puerto Rico’s economy faces challenges, including high unemployment and a lower median income compared to the U.S. mainland. Puerto Rico also has much higher income inequality than most states. These factors influence purchasing power and can make it difficult for some residents to meet their basic needs, even if the overall cost of living in their town appears lower than the US average.
Would statehood make a difference?
The cost of living from one state to another can be very different: the cost of living in Washington state can be nearly twice as high as Arkansas. Statehood might not reduce the cost of living in Puerto Rico. However, statehood has improved the income levels in every territory that has become a state. More purchasing power makes up for the higher cost of living.
Statehood will also equalize federal benefits in Puerto Rico with those in the states, which would make an enormous difference during the transitional period as prosperity grows in Puerto Rico.
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