As Covid-19 restrictions wreak havoc on Puerto Rico economy, Gov. Vázquez weighs options amid spread
21-day extension, stricter enforcement considered, as official warns of business closures, jobs lost
SAN JUAN – Gov. Wanda Vázquez Garced administration officials are weighing options to face an ever-growing number of Covid-19 cases and hospitalizations, as the island’s economy reels under emergency restrictions to control the spread of the potentially deadly virus.
Puerto Rico Economic Development & Commerce (DDEC by its Spanish acronym) Manuel Laboy warned Thursday that if the spread of Covid-19 is not checked soon and the government is forced to continue or add on to current restrictions on business activity, the economic collapse that was spurred by curfew-lockdown measures implemented at the start of the crisis in March will worsen.
After coming out of a meeting at La Fortaleza governor’s mansion, Laboy said that the administration is considering ramping up an education campaign targeted at island residents and toughening enforcement of coronavirus emergency restrictions to control the spread of the virus and bring down the number of infections.
While some medical experts, including Puerto Rico College of Physicians and Surgeons President Dr. Víctor Ramos, are advising the governor to reinstate Phase 1 lockdown measures such as those in place between March and May, Laboy ruled this out, saying such an action would devastate the island’s economy.
Economy in ‘serious condition’
Laboy said that Puerto Rico’s economy is already in “serious condition,” noting that between March and June of this year, the island has lost about 80,000 jobs, according to federal statistics. He said that between 20 percent and 30 percent of local small and medium-sized businesses are at risk of closing permanently, as tourism, retail sales and services have taken a hit.
“We will have to make an even greater effort, not only with the citizenry but obviously at the level of government and the private sector, to enforce the executive order, so that people have to use face masks and must follow all protocol measures. If this is not addressed, it’s clear that we will continue to lose jobs and the economy will be more affected than it is,” the DDEC chief told reporters after coming out of the meeting with the governor and her Covid-19 medical and economic task forces. “She will be making this announcement in due time, that compliance efforts will be redoubled.”
Laboy said that he urged the governor to accelerate the disbursement of federal and local aid, saying that there is still funding from the federal Coronavirus Aid, Relief and Economic Security (Cares) Act that is available for local businesses. He said that the government should also speed up the use of incoming federal aid assigned for reconstruction after hurricanes Irma and Maria hit the island nearly three years ago, particularly Community Development Block Grant-Disaster Recovery (CDBG-DR) funds.
Laboy stressed that while these sources of aid “will not solve the problem, they could mitigate this situation.”
Unemployment still critical
While the unemployment situation on the island has improved somewhat since the severest of curfew-lockdown measures were lifted between May and June, it is still critical when compared to when the virus crisis erupted in mid-March.
There were 2,253 initial jobless claims the week ending Aug. 1, down from the year high of 66,555 claims the week ending April 4, but still twice as many as the 1,172 claims filed the week ending March 14, according to the most recent U.S. Department of Labor statistics report published by the Puerto Rico Statistics Institute.
Continued unemployment claims in Puerto Rico stood at 165,500 the week ending July 25, down from the year high of 229,039 claims the week ending June 27, but still about nine times higher than the year low of 18,704 continued unemployment claims the week ending March 7.
Initial jobless claims are how many new people file for unemployment benefits in a week, while continuing claims measure the total number of people on unemployment.
The local insured unemployment rate – continued claims divided by covered employment — stood at 19.13 percent the week ending July 25, down from the year high of 26.8 percent the week ending June 27. Still, the most recent rate is many times higher than the year low of 2.19 percent the week ending March 7.
As Covid-19 restrictions remain in place, the situation of jobless people on the island will likely worsen with the end last month of weekly supplemental Pandemic Unemployment Assistance (PUA) payments of $600.
On Saturday, President Trump signed four executive orders to provide additional relief to millions of Americans affected by the pandemic, one of which would provide $400 a week in unemployment assistance. The federal government would provide $300 and state governments the remaining $100.
However, Puerto Rico Labor & Human Resources Department Secretary Carlos Rivera Santiago said this week that his agency is still waiting for an authorization and guidelines from the U.S. Department of Labor to go ahead with payments under the next round of the PUA program. He acknowledged there could be additional restrictions in the program due to instances of fraud involving such payments.
Trump’s move to circumvent Congressional approval has been met with criticism and will likely be challenged in court.
Moreover, Puerto Rico’s Financial Oversight & Management Board (FOMB) has projected in its most recent fiscal plan that the commonwealth’s unemployment insurance trust fund could run out of money in the next few months if employer contributions remain low and the outflow of jobless claim payments remain high.
21-day extension of restrictions being mulled
For his part, Puerto Rico Health Secretary Lorenzo González Feliciano, who was also at Thursday’s La Fortaleza hearing, said that medical experts are recommending the governor extend current Covid-19 restrictions for an additional 21 days instead of the typical 15 days.
The Health secretary said that the new executive order would consider more restrictions on activities in enclosed spaces, including indoor recreational activities and shopping malls. He said that the scheduled Sept. 17 date for the resumption of in-person classes in the island’s public and private schools will likely be pushed back due to spiking Covid-19 cases.
Both González and Laboy said that the governor will have an additional meeting on the matter on Friday before making an announcement over the new Covid-19 executive order that reportedly will go into effect starting Monday, the day after the unfinished primaries are held.
On July 31, Vázquez announced the extension of restrictions and prohibitions on social, recreational, and entertainment activities that went into effect on July 17, after medical experts alerted to the most serious spike in cases since the beginning of the crisis and occurring after the lifting of the most severe curfew-lockdown restrictions in June.
González said that there was “much concern” over the continuing upward trend in Covid-19 cases and hospitalizations. He assured that the “balance that the governor wants is health over the economy, let’s be clear about this. She will not give in on this [executive] order and in others to follow.”
“Whatever the economic task force presents has to be revised in the context of the recommendations made by the group of scientists and must be accepted by them,” he said.
As of Thursday, the Health Department reported that there were 10,279 confirmed positive cases of the novel coronavirus. González said that medical experts are projecting that this figure could almost triple by Sept. 1, reaching 30,000 positive cases of SARS-CoV-2, the virus that causes the novel coronavirus disease Covid-19.
So far, there have been 306 deaths attributed to the virus. The number of Covid-19 patients in local hospitals stood at 466. González said that hospitals in Puerto Rico were at 55 percent of capacity.
“That is the concern, of the significant changes in coming days,” the Health secretary said, pointing out that people under 50 years of age are responsible for most of the spread of the virus, even though they may not get sick or have symptoms.
“These people are infecting our older population, people over 60 years of age, among which 75 percent of deaths are located,” he said. “People with comorbidities are going out, being undisciplined in certain measure, not following the rules and exposing other older people.”
In fact, González insisted that the spread of the virus is mainly local and not being brought in by people arriving from overseas.
“The infection at this moment is being spread by the community; it is not coming through the airport. We want to make that clear. Let’s stop putting up excuses that this is coming through the airport. No, we Puerto Ricans are being undisciplined,” he said.
González also expressed concern over local hospitals’ use of some $150 million in Cares Act aid disburse to them, given that many nurses laid off during the pandemic crisis have not been called back, despite the growing number of patients going to medical facilities.
He said that La Fortaleza is working on a measure to provide an additional $150 million to hospitals, but added that that this aid will be conditioned on these hospitals not transferring and treating Covid-19 patients, recruiting the necessary medical personnel, and providing personal protection equipment for their staff.