Puerto Rico is the lowest labor cost region in a restructured, competitive U.S. economy. Although the U.S. federal minimum wage of $5.15 an hour applies, a favorable wage differential exists on the island. The average hourly compensation production costs in Puerto Rico is $ 13.47 (2000 data) compared to $17.94 (2000 data) in the U.S. mainland. Hourly earnings in Puerto Rico’s manufacturing sectors (2-digit SICs) average between 65 % and 80 % of the overall US. Labor costs are lower than most competing locations for high technology industries. Puerto Rico fringe benefits average 36 % of hourly earnings compared with 37.7 % for the US (1997 data).

The labor climate in Puerto Rico, combined a large pool of skilled workers with friendly labor relations and infrequent business disputes, makes it extremely conducive to business. Late industrialization within equitable, democratic institutions has fostered a culture of excellence and cooperation in Puerto Rico’s manufacturing labor force.

U.S. federal employment laws apply in Puerto Rico, including minimum wage and mandated fringe benefits such as social security taxes. Employers are also subject to local laws and regulations.

The law allows for flexible work schedules, continuous shifts and minimum breaks between shifts.
The same collective bargaining laws govern organized labor as in the U.S. mainland. Only 6 % of employees in private sector manufacturing are union members.

Click here to view the Hourly Earnings detail of Production Workers in Puerto Rico vs. those of the U.S. Mainland by Industry.


Click here to view the Hourly Earnings detail of Production Workers in Puerto Rico vs. those of the U.S. Mainland by U.S. State.