Plunging population in spotlight

By: Marcos Lebron

75,000 Thousand flee each year

Puerto Rico’s population loss is getting a flood of attention from U.S. mainland media outlets as new data shows the sustained decline is not letting up amid the island’s marathon economic downturn.

The Wall Street Journal was the latest to spotlight the exodus with a front-page story Monday published under the headline “Puerto Ricans Flock North Away From Battered Economy.”

That lengthy report followed on the heels of similar stories published over the holidays by a range of media outlets including U.S. News & World Report (“Puerto Rico’s Population Continues Rapid Decline”), The Bond Buyer (“Puerto Rico Population Continues to Shrink”), Voxxi (“Puerto Rico’s population continues to decline as the economic plague persists”), Latin Times (Puerto Rico’s Population Still In Decline, Says Latest Census”) and The Inquisitr (“Puerto Rico: US Census Shows Population Still In Decline”)
The New York Times noted in a recent story on the U.S. population that Puerto Rico and just two states – Maine and West Virginia – lost population last year.

“Puerto Rico is facing a severe Greek-style recession,” Juan Carlos Hidalgo, a policy analyst on Latin America at the Cato Institute, told U.S. News & World Report. “The last decade, from 2001 to 2011, it was the first decade that the number of Puerto Ricans actually dropped on the island.”

Government officials have been sounding the alarm about Puerto Rico’s declining population for years. And the downward trend shows no sign of slowing as the island’s economic downturn stretches into a ninth year.
Recent numbers show that Puerto Rico is losing 75,000 thousand residents per year.

The reports add to a mountain of evidence on Puerto Rico’s plunging population amid an ongoing recession, which economists and demographers warn will pose increasingly greater challenges to the island. Human resources executives note that those problems extend to island businesses and Wall Street credit ratings firms now regularly cite population loss as a key challenge for the island economy and efforts to shore up the government’s shaky finances.

The plunging population and shifting demographics represent a range of challenges for the island, including the prospect of less federal funding, a shrinking tax base and increased budget pressures, lower demand for goods and services, reduced investment and a dramatically aging population with fewer financial resources.

The issue is also increasingly raising red flags on Wall Street regarding the island’s economic and fiscal future. All three credit rating agencies – Standard & Poor’s, Moody’s and Fitch – rate Puerto Rico credit one notch above investment grade and have warned of potential downgrades to a junk rating. They all have cited the population decline in recent reports on Puerto Rico’s credit.
“A country that doesn’t have credit is destined to fail,” Janette Mondo, a 46-year-old engineer who moved from San Juan to New Jersey in August, told The Wall Street Journal.

From 2000 to 2010, a net 288,000 people left for the U.S. mainland, according to the Puerto Rico Institute of Statistics. The pace has accelerated in the past few years as the economic situation has worsened, with a net loss of 54,000 migrants a year in 2011 and 2012 on an island of just over 3.6 million people. Preliminary data for early 2013 suggest the outflow is still strong.

The pace of Puerto Rico’s population loss will pick up over the remainder of the decade and will decline by more than 8 percent overall by 2020, according to new projections from the island government’s Planning Board.

The new forecast projects Puerto Rico’s population will be under 3.36 million by 2020, down by more than 300,000 from the current population of roughly 3.61 million. The potential 8.3 percent decline would far outpace the 2.2 percent drop registered between the 2000 and 2010 census counts.

Puerto Rico’s population declined by nearly 37,000 people over the past year and continues to fall at a pace that would put it below 3.6 million next year, according to the latest U.S. Census Bureau data.

An update issued last month pegged Puerto Rico’s population in 2013 at 3.61 million. That was down from 3.72 million in the 2010 Census. The data show the estimated population fell to 3.86 million in 2011 and then again to 3.65 million in 2012 before declining to 3.61 million last year.

If that pace continues, the island’s population will drop into the 3.5 million range in 2014. It is projected to drop to 2.98 million by 2050, according to the U.S. Census Bureau — down from a peak of 3.83 million in 2004 and about the same population the island had in 1975.

The Puerto Rico Planning Board has also issued a special report on the island’s rapidly falling birthrate, as the government ramps up its study of population loss and its potential impact on economic development.
The number of live births on the island dropped from roughly 60,000 in 2000 to 42,000 by 2010, representing a reduction of nearly 30 percent or an average reduction of 1,700 live births per year.

That downward trend has continued amid an ongoing exodus of young adults to the U.S. mainland during the marathon local economic downturn.

Much attention has been paid to Puerto Rico’s so-called “brain drain” problem that has seen tens of thousands of professionals and other working-age adults leave the island for the U.S. mainland amid the ongoing economic doldrums.
Puerto Rico is among just two dozen national statistical areas around the world that lost population between 2005 and 2010, according to the United Nations.

As the global population topped 7 billion after an unprecedented surge of 1 billion over the past 12 years, Puerto Rico and 23 countries actually saw declines.

They are mostly former Soviet Republics and Eastern European countries. According to the latest U.N. count, of the 24 nations that registered population falls between 2005 and 2010 only Puerto Rico, Germany and some small island nations were not from this region.

The Wall Street Journal report noted that the current wave of departures is the largest since the 1950s, when 470,000 Puerto Ricans left for the mainland seeking farm and factory work in the Northeast.
The island government encouraged the mostly rural and working-class migrants to leave because the economy wasn’t generating nearly enough jobs.

Today, many of the people leaving are young professionals the island wants to retain, Mario Marazzi, executive director of the Institute of Statistics, told The Wall Street Journal. Those who left in 2011 spanned a wide range of occupations, including roughly 2,700 food-service workers, 2,000 teachers and 180 lawyers, according to institute estimates. They moved to states across the U.S., with Florida, New York and Texas topping the list.

“If we’re losing young professionals, people at their most productive ages, we may have a huge problem trying to support the elderly population,” Sergio Marxuach, public-policy director at the Center for a New Economy, told The Wall Street Journal.
Some see a potential silver lining in the flow of Puerto Ricans to the mainland.

“We’ve been migrating for decades,” Deepak Lamba-Nieves, research director at the Center for a New Economy, a nonpartisan think tank in San Juan, told The Wall Street Journal. “Many of those will probably come back at some point.”
And when they do, he told The Wall Street Journal, they could bring new skills and entrepreneurial energy to invigorate the economy.
Still, the toll of the plummeting population is readily apparent around Puerto Rico.

Nearly 320,000 housing units were vacant in 2012, up from 186,000 in 2005, according to census data. Data from the University of Puerto Rico’s School of Medicine show that roughly 30 percent of its residents leave the island once they complete their training.
Puerto Rico’s public school rolls also continue to drop, with roughly 415,000 children spread throughout some 1,500 public schools. Public school enrollment peaked at nearly 713,000 students in 1980, but that number has been in decline as more parents send their children to private schools and the overall population falls.

The administration of Gov. Alejandro García Padilla is working to jumpstart the economy and curb the population loss through efforts to lure investors, spur the tourism industry and beef up agriculture.
“This is not the first time our people have confronted big problems and managed to overcome them,” La Fortaleza Chief of Staff Ingrid Vila Biaggi told The Wall Street Journal.

Vila echoed the argument by economists that the economy is key to stemming the outflow of islanders.
“If the situation starts to improve and the gap between the U.S. and Puerto Rico stabilizes, then the migration will taper,” Vicente Feliciano, president of Advantage Business Consulting in San Juan, told The Wall Street Journal.

Progreso Económico, a quarterly report published by the island’s largest bank Banco Popular, says stemming the flow of human capital from Puerto Rico is key to the island’s economic recovery.

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