June 14, 2016
While the rest of the country may be returning to stable – though still shaky – economic growth, Philadelphia remains on the fringe of success. Despite being the seventh largest metropolitan economy in the United States, Philly’s economic growth continues to rank among the bottom 300 largest metro areas in the world, and remains one of the few that haven’t recovered from the recent recession. It could be worse.
Compared to Puerto Rico, this city is an economic paradise. With an official unemployment rate more than twice that of anywhere else in the United States, an economy that has been shrinking for more than a decade, and an overbearing mountain of debt, it’s no wonder Puerto Ricans are leaving their beloved island in droves.
What do Puerto Rico’s problems have to do with Philly’s? Philadelphia has long had one of the largest populations of Puerto Ricans in the country, which is now growing even faster due to the influx of islanders looking for a better way of life. But, rather than presenting a problem, the spate of new residents should be seen as an opportunity to change the local community, and potentially the country.
On first glance, Puerto Rico’s crisis may seem to only add to Philly’s folly, but the opportunity to impact the local community has never been better.
Puerto Rico’s economy may be poor, but that doesn’t mean it lacks talent. In fact, the island generates more than 15,000 STEM candidates every year (the highest-paid field for new graduates), many of whom come stateside for our greener pastures. In addition, it’s a highly entrepreneurial island, having built a small, but robust tech sector. Reaching the capacity of their local market, Puerto Rican entrepreneurs are now seeking other cities, especially those like Philadelphia that have family and cultural connections, to welcome their skills.
Not everyone comes from a formally educated background, nor does everyone have the huge sums of money needed to invest in many startups, but that doesn’t mean they can’t contribute. A number of companies across the country are beginning to provide such opportunities. For example, Herbalife – a nutrition company based in California – has helped thousands of Puerto Ricans become entrepreneurs with relatively little upfront investment. Imagine if there were hundreds, or even thousands more who were able to generate an income for their families as well as contribute to Philly's local community this way. These are the types of citizens and opportunities that Philadelphia’s tenuous economy needs, especially in districts such as the 180th, where families continue to struggle to make ends meet.
To boost entrepreneurial activity in the region, legislators and local administrators should take a page from Puerto Rico’s playbook, where successful accelerators and tax incentives benefit the aspiring self-employed. Accelerators in Puerto Rico were launched with the help of government grants; there is no reason why Philadelphia can’t fund such a program targeting specific neighborhoods in Philadelphia. Tax incentives that remove the barriers to self-employment have helped thousands of small investors in Puerto Rico, but would be even more prudent to support and retain the growing community of entrepreneurs in our local region.
As the founder of the National Puerto Rican Chamber of Commerce and Representative Angel Cruz – the long-serving state representative of North Philadelphia (also Puerto Rican) – we both know all too well the struggles of our constituents. Yet, we still remain optimistic and passionate about improving opportunities for locals, while sharing concerns that this next generation may become complacent, both economically and civically.
Engaging in local politics and voting, taking responsibility for our own actions, and pushing for greater investment in local economic growth are ways in which we can help ourselves. Low levels of civic engagement and the waning desire to take on key leadership roles are only making matters worse. If the local Puerto Rican population were to become active, however, it has the opportunity to make a very big impact, not just on our local economy, but on the nation’s.
Consider the upcoming national elections. Recent polling is close enough that the tens of thousands of eligible Puerto Rican voters in the region could have a substantial impact on the race. Being an important swing state, especially in this highly contentious presidential election year, local Philadelphians have a disproportionate potential to influence the future economic policies of the next White House resident. The power to impact our local community is even greater.
On first glance, Puerto Rico’s crisis may seem to only add to Philly’s folly, but the opportunity to impact the local community has never been better. If new residents’ creative abilities were cultivated and allowed to grow through entrepreneurship, if they were encouraged to become more civically engaged, and if investment was shifted, Philadelphia may be able to take advantage of what lesser cities never could, creating opportunities that last for generations.
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Angel Cruz is a state representative from the 180th legislative district and president of the National Hispanic Caucus of State Legislators.
Justin Vélez-Hagan is an economic policy analyst at the University of Maryland-Baltimore County and founder of the National Puerto Rican Chamber of Commerce.