Supporting a 21st Century Workforce in Puerto Rico Challenges and Options for Improving Puerto Rico’s Workforce System Following Hurricanes Irma and Maria in 2017 GABRIELLA C. GONZALEZ, KATHRYN A. EDWARDS, MELANIE A. ZABER, MEGAN ANDREW, AARON STRONG, CRAIG A. BOND HS AC HOMELAND SECURITY OPERATIONAL ANALYSIS CENTER An FFRDC operated by the RAND Corporation under contract with DHS rr2856_cover_v6.indd 1,3 9/9/20 11:34 AM Published in 2020 Preface On August 8, 2018, the government of Puerto Rico submitted to Congress an economic and disaster recovery plan, as required by the Bipartisan Budget Act of 2018. Under contract with the Federal Emergency Management Agency (FEMA), the Homeland Security Operational Analysis Center (HSOAC) provided substantial support in developing the plan by soliciting and integrating inputs from a wide variety of stakeholders, contributing analysis where needed, and assisting drafting the plan. The plan included an overview of damage and needs, courses of action (COAs) to meet those needs, costs of the COAs, and potential funding mechanisms for those costs. To support federal agencies evaluating and funding recovery actions, HSOAC is releasing this detailed volume for the economic sector, which is one of 12 HSOAC research sectors that helped develop the recovery plan. HSOAC developed supporting information for each sector engaged as part of recovery planning. While the other sector reports describe conditions and actions that contribute to economic outcomes, the Economics Sector volumes are focused on the preexisting conditions and policies that contributed to the economic contraction before Hurricanes Irma and Maria and the potential actions that could be taken to promote economic growth in the poststorm period. The purpose of this document is to give decisionmakers more detail on the workforce challenges confronting Puerto Rico prior to the 2017 hurricane season, and directly afterward, and to offer suggested strategies to design and implement workforce development programs and an overarching system that will help meet short-term and long-term workforce needs and support the government of Puerto Rico in meeting its strategic objective to develop a 21st-century workforce. Data collection and analysis for this report occurred from January through June 2018. This report is a companion document to another Economics Sector report, Challenges and Opportunities for the Puerto Rico Economy: A Review of Evidence and Options Following Hurricanes Irma and Maria in 2017 (forthcoming), which summarizes the sector’s courses of action described in the recovery plan and provides more details on how the government of Puerto Rico can develop its economy in the wake of the 2017 hurricanes. More information about HSOAC’s contribution to recovery planning in Puerto Rico, along with links to other reports being published as part of this series, can be found at www.rand.org/hsoac/puerto-rico-recovery. This document will likely be of interest to other stakeholders funding or implementing recovery activities in Puerto Rico, including local municipality agencies, nongovernmental organizations, and the private sector. Furthermore, this body of material contributes to the larger literature about disaster recovery and resilience and may be of interest to other communities planning for recovering from similar disasters. iii This research was sponsored by FEMA and conducted within the Strategy, Policy, and Operations Program of the HSOAC’s federally funded research and development center (FFRDC). About the Homeland Security Operational Analysis Center The Homeland Security Act of 2002 (Section 305 of Public Law 107-296, as codified at 6 U.S.C. § 185), authorizes the Secretary of Homeland Security, acting through the Under Secretary for Science and Technology, to establish one or more FFRDCs to provide independent analysis of homeland security issues. The RAND Corporation operates the HSOAC as an FFRDC for the U.S. Department of Homeland Security (DHS) under contract HSHQDC-16-D- 00007. The HSOAC FFRDC provides the government with independent and objective analyses and advice in core areas important to the department in support of policy development, decisionmaking, alternative approaches, and new ideas on issues of significance. The HSOAC FFRDC also works with and supports other federal, state, local, tribal, and public- and private- sector organizations that make up the homeland security enterprise. The HSOAC FFRDC’s research is undertaken by mutual consent with DHS and is organized as a set of discrete tasks. This report presents the results of research and analysis conducted under 70FBR218F00000032, “Puerto Rico Economic and Disaster Recovery Plan: Integration and Analytic Support.” The results presented in this report do not necessarily reflect official DHS opinion or policy. For more information on HSOAC, see www.rand.org/hsoac. For more information on this publication, visit www.rand.org/t/RR2856. iv Contents Preface ........................................................................................................................................... iii Figures .......................................................................................................................................... vii Tables .......................................................................................................................................... viii Summary .......................................................................................................................................... x Acknowledgments ...................................................................................................................... xxii Abbreviations ............................................................................................................................. xxiv 1. Introduction ................................................................................................................................. 1 Objectives of This Report ............................................................................................................ 4 Data Sources ................................................................................................................................ 7 Challenges to Workforce Recovery in Puerto Rico .................................................................... 7 Organization of Report .............................................................................................................. 12 2. Historical Context and Current Challenges for the Workforce System in Puerto Rico ............ 14 The Current Workforce and Labor Force in Puerto Rico .......................................................... 14 Occupational Context for the Puerto Rico Workforce .............................................................. 24 Industry Context for the Puerto Rico Workforce ...................................................................... 26 Education and Training Landscape in Puerto Rico ................................................................... 31 An Analysis of Puerto Rico’s Workforce System ..................................................................... 40 Conclusion ................................................................................................................................. 53 3. Acute Workforce Needs as Puerto Rico Recovers from Hurricanes Irma and Maria ............... 54 Labor Market Demands ............................................................................................................. 54 Identifying Recovery Occupations ............................................................................................ 57 Occupations Requiring (at Most) a High School Diploma (Uncredentialed) ........................... 59 Occupations Requiring a Trade Skill ........................................................................................ 60 Occupations Requiring a Bachelor’s Degree ............................................................................ 64 Conclusion ................................................................................................................................. 66 4. Macro Estimates of Labor Supply Constraints to Puerto Rico’s Recovery .............................. 68 Modeling Approach ................................................................................................................... 69 Input-Output Model to Estimate Aggregate Demand from Recovery Spending ...................... 71 Translation of Employment to Occupation ............................................................................... 73 Wage Disparity Between Puerto Rico and the Continental United States ................................ 76 Educational and Training Requirements by Occupation ........................................................... 79 Conclusion ................................................................................................................................. 80 5. Strategies for Developing a Workforce in Puerto Rico to Meet Short- and Long-Term Needs84 Characteristics of a Well-Functioning Workforce Development System to Meet 21st-Century Workplace Demands ........................................................................................................... 85 v Approach to Devising Strategies Suggested Within COA ECN 2, Implement Workforce Development Programs ......................................................................................................