Economic Crisis on the Rise: The rich get richer and the poor get poorer in Puerto Rico

By: Marcus J. Ramos Cintrón

On November 5th a press conference about economic crisis and social inequality in Puerto Rico took place at the University of Puerto Rico at Mayagüez in which members of civil society and experts on the issues composed a panel and provided answers to the campus community.

The group of panelist consisted of Dr. Michael González, an associate professor of sociology at UPRM; Mr. Javier Smith, an activist of the western region of Puerto Rico; and Mr. José G. Santiago, a master’s graduate of democratic government.   Dr. Edwin Irizarry Mora, a professor of economy at UPRM was not a panelist at the press conference but was contacted via email and replied to various questions.

photo newsstory

Left to right: Dr. González Cruz, Mr. José G. Santiago and Mr. Javier Smith

When the consequences of a Puerto Rican default on its debt were addressed, Dr. Irizarry Mora replied via email that it’s highly unlikely that the Puerto Rican government would default on its debt because the constitution obliges Puerto Rico to pay its creditors before fulfilling any other obligations, meaning creditors will always get their payments.

Although there is little hope for restructuring Puerto Rico’s public debt, Irizarry Mora emphasized the importance of credit unions to prevent capital flight and encourage local investment in order to help the economy. “Credit unions must assure investors high yield in their investments in diversified economic activities, which should encompass services, agro-industry, manufacturing, recycling, retail commerce and any other non-traditional activities. The market exists, so the next step is to provide the necessary financial resources,” replied via email Irizarry Mora.

In the social spectrum of the issue, activist Javier Smith said that social inequality has risen in the past decade and that it is clearly reflected in the comparison of the unemployment rate and the labor force participation rate of 2000 and 2010. Smith said that while unemployment has risen from 10 percent in 2000 to 17 percent in 2010, labor force participation rate has diminished from 46 percent to 41 percent respectively. This meaning over 200,000 people unemployed and the labor force diminished by over 73,000 workers. He also stressed the fact that Puerto Rico has a decreasing population due to emigration.

Facing such a harsh reality Mr. Smith emphasized the importance of civil society in the fight to reduce social inequality. For Smith it’s very important that people see beyond their individual selves and show empathy for their fellowman. Only then will people start to find their role in the making of a better society.

Along the lines of how individuals should organize themselves in order to reduce social inequality Mr. José G. Santiago envisioned a more participative democracy and that way empower marginalized sectors of society. This empowerment consisting of providing citizens the tools and education to devise new ways of production and distribution of wealth. Such tools will make way for a new economic model that could reduce social inequality and better equip marginalized sectors against economic crisis.

Sociologist Dr. Michael González agreed with the premise that the Puerto Rico Department of Education should reform its curriculum in order to form more capable citizens that could compete for resources and opportunities.

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