Rivera believes that “on one side, [there are] the people who work declare every dollar and comply with the law; on the other, those who operate in the shadows”.
The former Secretary of the Department of Labor tells us that out of 3.2 million people residing in Puerto Rico, only 1.16 million work in the formal economy, while labor participation is around 44.9 %. (Photo: InDiario)
Puerto Rico is home to approximately 3.2 million people, according to the State Data Center (SDC-PR). Of these, only 1.16 million work in the formal economy, while labor participation is around 44.9%. This gap is evidence of a growing inequality between those who support the treasury with their contributions and those who, without contributing or doing so minimally, demand and enjoy the same public services.
This reality has divided Puerto Rico into two battle fronts: on the one hand, people who work declare every dollar and comply with the law; on the other, those who operate in the shadows, report no income and benefit from subsidies designed to be transitory but perpetuated as a way of life. This, fed by a discourse that sometimes criminalizes the entrepreneur and glorifies receiving compensation without working, pushes many into the informal economy and accentuates a silent war where, for now, the evaders have a marked advantage.
The poor control of certain subsidies and incentives facilitates this subway economy: it is possible to receive food or housing subsidies and, at the same time, generate income that is not reported. Meanwhile, the compliant merchant is forced to pay more and face increasingly onerous procedures to compete against services that operate from the subway economy publicly observed by all. The result is a double loss: less revenue for schools, hospitals, roads and services, as well as greater frustration among those who do comply with the law.
But this battle will not be won by Puerto Rico if the citizenry justifies evasion as a “necessary evil” or “the government is the one who steals,” when these actions self-inflict harm on all of us on the Island. Claiming licenses or registrations, formalizing a business, getting oriented about permits and rejecting cheating and trickery are acts of solidarity with other Puerto Ricans who depend on essential services and with the Puerto Rican entrepreneur who bets on growing within the law. Every dollar correctly declared strengthens the path towards a just and prosperous Puerto Rico, acting otherwise undermines our economic development.
This battle has not yet culminated, it is in a critical stage, we must make a determination as a People if we want to progress and survive... which side are you on?
Carlos J. Rivera Santiago, served as Secretary of the Puerto Rico Department of Labor and Human Resources. His work as Secretary was crucial for the management of thousands of unemployment and unemployment benefits claims, especially during the pandemic, helping to stabilize the department's operations, detect fraud and facilitate the distribution of aid to citizens.
This article was originally published in Spanish by InDiario.
