“Jones Act … costs Puerto Rico $1.4 billion a year and keeps 1.3 million people in poverty is this true
Executive summary
Independent studies and commentators estimate the Jones Act imposes an annual cost on Puerto Rico ranging from about $1.1 billion to $1.5 billion; several recent reports and op-eds commonly cite a $1.4 billion figure as a 2024–2025 estimate [1] [2] [3]. Puerto Rico’s reported poverty rate in recent sources is presented as roughly 40–42% [1] [2] [4], and some writers link the Act’s cost burden to exacerbating that poverty, but available sources do not claim the Jones Act alone “keeps 1.3 million people in poverty.” Not found in current reporting: a direct attribution that the Jones Act alone causes 1.3 million Puerto Ricans to be in poverty.
1. What the $1.4 billion number means — and where it comes from
Multiple recent analyses and media pieces say independent or academic studies estimate an annual “welfare burden” or economic cost to Puerto Rico in the ballpark of $1.1–$1.5 billion; several outlets and a 2024 academic study are repeatedly cited for a $1.4 billion figure [1] [2] [5]. Those figures are framed as an aggregate estimate of higher shipping and consumer prices, not direct cash transfers, and are often described as a “welfare burden” or “cost to the Puerto Rican economy” rather than an exact line-item tax on consumers [2] [6].
2. How analysts calculate the cost
Researchers and policy groups compare shipping costs between U.S. domestic routes (subject to Jones Act cabotage rules) and international routes to nearby Caribbean nations, and model how higher freight translates into higher consumer prices and lost economic activity. For example, a Federal Reserve Bank of New York paper and academic studies are cited showing shipments to Puerto Rico can cost roughly twice what similar shipments to Jamaica or the Dominican Republic cost, which feeds the higher-cost estimates [2] [7]. Different studies use different methods and timeframes, producing the range of $1.1–$1.5 billion cited across sources [1] [5].
3. Poverty statistics cited in reporting
Multiple sources use recent poverty figures around 40–42% to describe Puerto Rico’s dire economic context: “more than 40%,” about 40.5%, and 41.7% appear in reporting and commentary [1] [4] [8]. These percentages reflect commonly cited territory-level poverty measures; sources link the high poverty rate to structural problems including the Jones Act, but they do not present a single-cause causal chain that the Jones Act alone created the poverty level [2] [8].
4. The claim “keeps 1.3 million people in poverty” — what sources say (and don’t)
Available reporting and the cited studies discuss how the Jones Act raises costs and “exacerbates poverty” in Puerto Rico, but none of the provided sources directly state that the Act “keeps 1.3 million people in poverty” or quantify poverty by attributing a specific number of people solely to the law [1] [2] [8]. Therefore the precise claim that 1.3 million people are kept in poverty by the Jones Act is not supported by the documents supplied here. Not found in current reporting: a direct, sourced estimate equating the Jones Act’s effect to 1.3 million additional people in poverty.
5. Counterarguments and political context
Proponents of the Jones Act defend it on national-security and maritime-industry grounds; unions and U.S. shipbuilders see it as protecting American jobs and fleet readiness, and Puerto Rico’s Resident Commissioner has been noted as a supporter in some reporting [4]. Other think tanks and advocacy organizations — Cato, Reason, New York City Bar, AEI, Grassroot Institute and others — emphasize the Act’s cost to island consumers and recovery operations after hurricanes, and several call for waivers or exemption for Puerto Rico [9] [8] [10] [7] [5].
6. Limitations, uncertainties, and what’s missing
The estimates vary by methodology and year; some figures date to 2010, other studies are from 2023–2025, and differences in assumptions (freight mix, counterfactual routes, pass-through to consumers) change the result [10] [11]. Sources link the Jones Act to higher prices and hampered disaster relief, but they stop short of proving a single-law causation for the territory’s multi-decade recession, fiscal crisis, and poverty levels—factors that researchers attribute to a mix of policy, debt, natural disasters, and structural issues beyond cabotage rules [6] [12]. If you need a formal causal estimate tying a specific number of people to the law, available sources do not provide that metric.
7. Bottom line for readers
The statement that the Jones Act costs Puerto Rico roughly $1.1–$1.5 billion per year is supported across multiple studies and news analyses cited in current reporting, and many commentators directly link those costs to worsening living standards on an island where roughly 40–42% of residents live in poverty [1] [2] [4]. However, the stronger claim that the Act “keeps 1.3 million people in poverty” is not found in the supplied sources; reporting instead frames the law as one significant contributor among many that exacerbate Puerto Rico’s economic distress [2] [8].