Puerto Rico's low labor force participation rate

As I researched my cover story on Puerto Rico in the current issue of WORLD Magazine, I appreciated the work of José Alvarado Vega and Alex Díaz, who four years ago went deeper than current hand-wringing: They delved into reasons for U.S. territory’s 40 percent labor participation rate, which is more than 20 percent below the U.S. average.

Part of the difference is that a higher percentage of Puerto Rican women call themselves “homemakers” than their counterparts in the United States do, and that has positive as well as negative aspects. But a larger part of the difference is probably due to the higher percentage of Puerto Ricans involved in a huge but largely unproductive underground economy. Many of those pursuits are drug-related and illegal. Others are tax-evading but otherwise non-criminal.

Puerto Rico also has a higher percentage of Social Security disability than any state has, with a high incidence of fraud, and a higher percentage receiving standard U.S. welfare benefits. Some of that is related to need, but Vega and Díaz cited the experience of Iris Lopez, the human resources manager at the Socio-Economic Community Institute, a nonprofit that manages federal Community Service Block Grants for work training and placement. Lopez spoke of “the lack of values and work ethic that make people employable to begin with,” noted that four out of 10 job applicants do not show up for interviews, adding, “Many don’t even have the courtesy, the discipline, or cordiality to call and cancel.” Lopez did not tie that tendency just to the untrained poor—many unemployed engineers and technicians also do not show up.

The Puerto Rican government has also set up Special Communities Offices to take a bite out of poverty, but one coordinator, Linda Colon, spoke not only of a lack of jobs and education but also an attitude problem among middle-class workers who gained positions by political connections: “The prevailing ethic is to do the least work and earn easy money, because at the end of the day, in the government, the party giving me the job will judge me by my loyalty and not by my capacity to do work. There is a lack of respect for professional and productive work; as a public employee, your work is of no consequence.

Vega and Díaz saw “nothing on the horizon pointing to a transformation of local society’s attitude toward work and work-ethic values, nor to the creation of low-skill jobs at the magnitude needed to put a serious dent in the island’s LPR [low participation rate] crisis. …” They concluded with dire thoughts of a “permanent underclass, suffering perpetually from the social plights of high crime, poor health, and low education. … This also hurts business growth by undercutting the island’s consumer base and purchasing power and keeps it up to $26 billion below what it would otherwise be.”

That’s where Vega and Díaz stop. The problem seems to me one more reason why Puerto Rico desperately needs Reforma Dos, a new spiritual reformation that would change attitudes toward work and much besides.