Puerto Ricans prioritize economic freedom, survey finds
A study titled “Freedom to Prosper in Puerto Rico” by the Center for Economic Renewal, Growth and Excellence (CRECE) in collaboration with Gaither International highlighted the importance of “economic freedom and upholding individual freedom” for retaining and attracting productive individuals to Puerto Rico.
The qualitative data were collected through focus groups – six sessions conducted over six days – in May and June 2023. The sessions involved 44 participants, who were categorized by generation: Generation X (ages 41-57), millennials (ages 27-42) and Generation Z (ages 1-20). Two sessions were conducted per generation group.
The quantitative research involved 791 interviews with residents across a broad age range.
“From this sample, 74% have an income lower than $24,000 a year and 43% are 55 years old or older,” CRECE Director Tere Nolla said during a news conference where the study was presented. “It provides valuable information related to the perceptions and aspirations of the people that live in Puerto Rico.”
The study explains that some of the hurdles affecting Puerto Rico’s “journey towards economic growth” include migration of skilled workers and professionals, an aging population and negative, or declining, birth rate.
“Without human capital, the possibilities for economic prosperity are extremely slim,” the study reads.
“In the short-term, low labor [-force] participation impacts our capacity to (1) carry out critical improvements to infrastructure, (2) increase local food production through agriculture, and (3) spark new entrepreneurship and innovation to create local wealth.
“In the long-term, the shrinking workforce and aging demographic trends will significantly reduce local production, limit sources of revenue and investment, and narrow job opportunities while increasing society’s burden of caring for our elders. These are all critical considerations that must be tackled to build a thriving and prosperous Puerto Rico.”
The study also found that most residents feel “that they lack financial and economic freedom to achieve their personal and professional goals.”
“As a result, while entrepreneurship is considered a viable path for progress, especially among younger generations and women, people hold back from pursuing it due to a lack of access to capital, punitive tax structure, and excessive bureaucracy,” the study states.
Furthermore, the research points to an “increasing distrust” toward the government, with 94% of participants believing “the government spends too much money, and that the spending is not translating into better services, education, health care and infrastructure.”
Respondents believe that social welfare programs “have failed to lift people out of poverty, and instead, have created generations of people who depend on these programs,” the study says. “Simply put, survey participants feel that the government and its policies limit their capacity to prosper and achieve their goals. Indeed, only 22% of respondents agree that the government ensures their freedoms are protected. Given these conditions, it should not come as a surprise that 64% of those surveyed feel that achieving success in Puerto Rico is difficult.”
Alarmingly, more than half of the surveyed population has considered relocating, including 75% of young adults aged 18 to 34.
Nolla further noted: “Over the past 10 years, we have lost 1 million people who have moved out of the island, while births have dropped by 70% since 2000. Looking at this picture, how can we retain and attract skillful people that can contribute productively to Puerto Rico’s growth?”
She said that the investigation aimed to understand Puerto Ricans’ attitudes toward individual liberty, the significance of economic freedom, entrepreneurship, the understanding of free markets, self-sufficiency, the government’s role in citizens’ lives, and the dynamics of migration.
Economist Gustavo Vélez suggested that crises over the past 20 to 30 years prompted much-needed reforms that had been “requested in Puerto Rico.” For example, “In energy, what had to occur? That the Puerto Rico Electric Power Authority went bankrupt.”
“And that accelerated the transformation,” Vélez said. “Welfare to work is the second one; the private sector has called for people to work, and now there are pilot programs that allow people to continue receiving aid if they work.”
He added that the work credit has led to 150,000 people entering the workforce. Furthermore, the increase in minimum wage has resulted in the lowest unemployment rate in Puerto Rico, according to Vélez.
Skepticism about entrepreneurship
Moreover, the study reveals skepticism toward entrepreneurs in Puerto Rico. Almost half of the respondents do not believe that business owners create jobs and contribute to the economy, while 28% view entrepreneurs as having a privileged position that promotes inequality.
Key findings from the quantitative study include that 43% define economic freedom as the ability to work, earn income, invest and own property without governmental interference.
Approximately 71% believe individuals are better suited to decide how to spend their money. Sixty-two percent feel they lack financial freedom and live paycheck to paycheck. Sixty percent think the economy is stagnating or worsening. Thirty-nine percent would start a business if they had the necessary funds, compared to 6% who would not consider it.
“Women (42%) are more inclined to start a business than men (36%),” the study adds. “Sixty-seven percent think starting a business in Puerto Rico is difficult versus 3% who find it is easy.”
The study also identifies the most valued freedoms as related to raising and educating children, tax policies that encourage work, the government’s respect for individuals’ life and integrity, privacy and personal space, and the right to own property without governmental interference or fear of seizure.
“Fifty nine percent think that success is driven by an individual’s efforts, persistence and hard work,” the study adds. “Seventy-two percent see it as very important to have the skills to be self-sufficient. Ninety-three percent think the government spends too much money; 51% believe that current social welfare programs have not been successful; 22% agree that their individual freedoms are protected by the government; [and] 66% don’t feel comfortable giving the government more control over their lives.”
A significant majority, 71% see a link between governmental control over production and distribution and corruption; 77% believe the permitting process should be streamlined to drive entrepreneurship and economic growth; and 59% view competition as a key to fostering “innovation and consumer benefits,” the study states.
