PUERTO RICO BRAIN DRAIN CRISIS
Brain drain refers to the large-scale emigration of a large group of talented, skilled and knowledgeable individuals. This situation is also commonly referred to as “human capital flight.” Globally, some generals factors contribute to this situation. Puerto Rico has his own distinctive factors. Puerto Rico has a special relation, and a unique political status with United States that make it easier for islanders to find an opportunity in the greatest country of the world. A concise timeline will show how and when “Puerto Rico became an asset to United States.” Remember, in financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. While Puerto Rico suffer a “brain drain” of human capital emigrating the host country enjoy a “brain gain.” Timeline of Puerto Rico and United States Relationship since the Spanish-American War 1898 -The Spanish–American War whereby Spain relinquished its sovereignty over Puerto Rico.
| 1900. The Foraker Act established the governing structure for the island of Puerto Rico.
| 1917-The Jones Act granted U.S. citizenship to all residents of Puerto Rico.
| 1947- Operation Bootstraps “Operacion Manos a la Obra” based on an exemption for federal taxes, section 931 of the U.S. Internal Revenue Code. Provided for exemptions of federal taxes for corporation operating in P.R. Puerto Rico entered a period of rapid industrialization and strong economic growth. (Carrion, 2009)
| 1952- Proclaimed the Commonwealth of Puerto Rico.
1963-Industrial Incentive Act, Section 931, increased the period of exemptions for 17 years. Puerto Rico became an important Center for the petro-chemicals and pharmaceutical industries. (Carrion, 2009)
| 1976- Section 931 changes to a more financially attractive Section 936. In 1991 corporations accounted for 72 percent of manufacturing jobs in Puerto Rico. (Barbosa, 2010)
| 1993-2000 Governor Pedro Rosello and Resident Commissioner Romero Barcelo lobbying in Washington against the Section 936 because they consider it as an obstacle to change the political status for the island and become the 51st State.
| 1993-President Bill Clinton proposed to eliminate Section 936 periodically during the next ten years. Economy start to decline and corporations stopped investing and start preparing to leave the island. Thousands of employees lost their jobs during this period.
| 1994-North America Free Trade Agreement NAFTA makes Mexico and Canada more attractive to corporations.
| 2005- Sections 936 and 30A expiration of the tax incentives.
| 2006- The commonwealth's population had a steeper loss than any of the 50 states since 2006, according to the Census Bureau. (Nasser, 2012)
General factors contributing to a brain drain situation globally There are some common denominators that provoke a large group of talented, skilled and knowledgeable individuals to emigrate. Some of these situations are well known as causes of Brain Drain. Many times high scholastic scores are recruited to study abroad. Upon concluding their studies, these individuals stay in the countries where they were educated. In several occasions individuals emigrate because the income is substantially higher. Countries like United States and others well developed nations offer a great diversity of careers and major possibilities of advancement. Last but not least, there is another driving factor know as the standards of living. Factors contributing to a brain drain in Puerto Rico
Several factors identify causes of this emigration in Puerto Rico. First, the University of Puerto Rico’s excellent...