09/28/2022

Puerto Rico Shows the Danger of a High Minimum Wage

As the financial system in Greece comes to a screeching halt this week, a smaller catastrophe looms in Puerto Rico, where the government is likewise set for disputes with its creditors over how to pay the bills.

Gov. Alejandro García Padilla of Puerto Rico does not believe the commonwealth will be able to pay the $72 billion, Michael Corkery and Mary Williams Walsh report in The New York Times. That’s a huge amount of money, about four times the amount that was at stake in Detroit’s bankruptcy.

There’s no short answer to the question of what went wrong in Puerto Rico, which the subject of a report commissioned by the García Padilla administration scheduled for release Monday. The authors include former World Bank chief economist Anne O. Krueger, and they don’t mince words.

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