A sign of things to come : Massive layoffs of government workers in Puerto Rico

A sign of things to come : Massive layoffs of government workers in Puerto Rico

Facing a deficit of $3.2 billion ,the island paradise of Puerto Rico announced that it would lay off 16,000 public employees on top of the 2,500 layoffs enacted earlier this year. The unemployment rate already a staggering 16% will be pushed further to 17% .While the layoffs looks to save the government $2 billion , despite howling protests from most of the islands major unions.

Puerto Rico know more as a tourist destination, and for its sandy white beaches and beautiful women is a case study and a warning on what happens when a population becomes all too dependent on subsidized government employment. In the past four decades, the commonwealth's government became the island's largest employer. The payroll represented 70 percent of the government's budget.

While other “Latino” cultures have long prided themselfs on strong family ties and entrepreneurs the island of Puerto Rico with its generous tax benefits and union pay packages have long favored government work .Perhaps we maybe seeing a historic change taking place. First because there is simply no money left and raising taxes looks to have reached the point like in many other places of diminishing returns ,while Uncle Sam is clearly taped out and second maybe perhaps because the “Latino” culture with its strong family ties lends itself more to ownership and the entrepreneur lifestyle.

As a frequent visitor to the island I have often noticed what seems to be enormous opportunities for the self employed and risk takers ,yet given the generous benefits of living on the island there is little or no incentive. Many businesses on the island are owned by outsiders ,who have long raved on the virtues of living and working in Puerto Rico . Yet except of the tourist trade there is little local involvement in business creation.

With the current strikes taking place protesting the layoffs ,my heart goes out to anyone who has lost their job ,but perhaps the painful process of transforming Puerto Rico into a vibrant entrepreneurial environment is underway. And perhaps the ground work is being done to change the culture and create a more opertunistic and self sufficient Puerto Rico.