Study reveals Puerto Ricans feel island’s ‘economic situation is bad or very bad’
The Institute of Economic Liberty (ILE) announced the results of an investigation on the knowledge of the principles of the free market, and even as those who participated in the study’s survey stated that they were divided on how they assess their personal economic situation, 88% responded that Puerto Rico’s “economic situation is bad or very bad.”
The study covered the four main pillars of the free market, which are “Individual liberty,” “rule of law,” “private property rights” and “limited government,” as well as topics such as the “current situation of Puerto Rico,” “social welfare” and “meritocracy.”
“One of the first studies we wanted to do was about the principles of economic freedom and free market that exists in Puerto Rico and the people’s affinity with regard to those principles,” ILE Director of Research and Public Policy Ángel Carrión-Tavárez said in a virtual roundtable with reporters.
He said that some 550 people participated in the study.
The report, titled “The Free Market in Puerto Rico 2022,” highlights that the participants broadly support the free market system and believe that it does not have the weight it should on the island.
For example, 99.6% of the sample stated that people should be free to make decisions in pursuit of their own well-being, and 97% stated that they should be able to earn an honest living in “whatever they wish, without facing government obstacles.”
In addition, 92% of the participants believe that the direction the island’s economy is heading “is bad or very bad.” These results indicate that a majority of people in the sample have a negative perception of the local economy, although about half of them “do not feel personally at risk.”
The report was prepared by Carrión-Tavárez; Luz N. Fernández-López, a researcher at ILE; and Juan Lara, an economist and professor at the University of Puerto Rico.
When News is my Business asked Lara which steps should be taken to keep Puerto Ricans living on the island while they tackle challenges such as increases in electricity rates and food, in addition to other increases related to global inflation, he said that he believes that is “what is precisely in people’s minds when they state [in the survey] that the economy is not well and that it’s on the wrong path.”
“Curiously, the economy is growing,” Lara said. “If you ask entrepreneurs, for example bankers, supermarket owners, refreshment and juice manufacturers, the ones who manufacture beer, they all say that they have had [a few] great years, that they have really seen a movement in sales and activity. But many businesses are complaining that they don’t have the workers, that they can’t get people to fill job posts, that they would like to expand their business, but they don’t have enough workers to do so.”
Lara said that it is interesting that within that context, survey respondents are saying that things are not going well and that their viewpoints are negative.
“So the people can tell and perceive that there are some things that are wrong that have not been corrected and that the prosperity we have now is a bubble, nourished by these federal funds,” Lara explained.
“And, in that sense, the only thing that will make it viable for people to stay in Puerto Rico and for some of the ones who have left to come back is that we have a healthy and sound economy, and that people see personal and professional development opportunities in Puerto Rico,” Lara said.
Lara further noted that this is why it is so important “to listen to” what the study is highlighting because, basically “it’s validating things that we thought were there with regard to how people feel.”
“But it’s not the same to think that’s what people feel than what’s being said by the people” who participated in the survey, Lara said. “And with these numbers, these are very high percentages.”
Methodology, social welfare programs
Meanwhile, Carrión-Tavárez and Fernández-López were tasked with designing the study and developing and administering the questionnaire, which consisted of sociodemographic data of the participants and 25 multiple-choice questions or statements.
Those who answered the questionnaire expressed a belief in individual responsibility and self-effort to satisfy desires and achieve personal aspirations.
“From the perspective of a change from the welfare model to one of economic mobility in Puerto Rico, it is significant that 98% of those surveyed say they are capable and responsible for achieving their goals, and 93% affirm they prefer to make a living by working,” Carrión-Tavárez added.
The overwhelming evaluation of social welfare programs is that they are not very effective and require modification. More than 80% of the sample disagrees that these programs are designed to help people get out of poverty, and three-quarters of the respondents agreed that these programs only meet the basic needs of people while they are poor. In addition, two-thirds disagreed that they give people the opportunity to stand on their own feet and start over.
Another significant finding from the survey is that 81% of respondents agree that the free market leads to increased employment, reduced poverty and better quality of life. However, 58% of participants believe that the government currently plays the most significant role in the island’s economy.
“This important result reveals that the sample perceives a lack of alignment between the value aspirations and the prevailing reality regarding economic liberty and the free market,” Carrión-Tavárez said.
Another notable outcome is that 61% of the participants either strongly agreed or agreed with the Spanish saying, “Si no tiene padrino, no se bautiza,” which translates to, “If you do not have a godparent you don’t get baptized.” In other words, “no matter how prepared you are, if you don’t have connections, you won’t succeed,” they said.
This finding suggests that although respondents generally prioritize “individual agency and meritocracy,” they perceive that in Puerto Rican society, people’s actions are limited by a culture of favoritism. The report includes a ranking that shows the gap between the importance of free market principles for participants and their assessment of how well these principles function in Puerto Rico.
“In the ranking of the principles, it stands out that 12 have 90% or more of importance and 17 have more than 80%. In contrast to these results, almost half of the principles have less than 10% of good performance and none exceeded 40%,” Carrión-Tavárez concluded.
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