Gran Depresión de Puerto Rico

I ran into an old co-worker over the weekend. Nice guy, kids, and a beautiful wife. Back when I knew him, he was a talented and charismatic salesmen. He climbed the corporate ladder with me, and I saw him demonstrate professional and responsible management of various parts of our company's sales function and eventually became manager of all of our retail stores.

When we both "downsized," I lost track of him. About a couple of years ago I was surprised and pleased to see that he had been selected to run a new retail store that was opening on the island. As bad luck would have it, he wouldn't last very long in that position because the company went into bankruptcy and recently shuttered its' doors.

So as we talked I was thinking to myself, "Damn what a bad time to be on the street looking for a job," especially a senior level sales or store management position. As are most of us, anyone who still has a "decent" job is holding onto it for dear life. Surprisingly, none of this seemed to phase my friend. He was actually pretty upbeat.

He explained that he had been doing some research and was going to open a "carrito" to sell tripletas. He said based on his research, some successful owners of roadside stands were pulling down around $2,000 a day. (That jives with a napkin calculation my wife and I did on a highly successful nightime hambaurger stand near our house. We calcuated that before expenses he was probably making $8,000 a week. His week was Wednesday night through Saturday night, four days).

He said he already had all the permissions and was now conducting a secret shopper exercise to determine the right price for his menu. His opinion, and who could blame him, was basically "pa' carajo," it's not worth risking your livelihood on a "real" job anymore. After so many let downs, he was going to be the Mr. Mom during the week and run the carrito on the weekends. If he can gross $1,200, no let's be conservative, $1,000 a day for Thursday through Saturday, he would be pulling down, tax free, $3,000 a week. That's $156,000 a year, tax free. His family gets their health care from his wife's job, so really, almost all of that is net profit.

Conclusion

I say more power to him, right? I mean he's been dicked around by the corporate world so much that, if I were him, I'd be pretty disillusioned about working for anyone else, ever again. Then again, depending upon your point of view, his move into the underground economy could be considered a great tragedy.

When highly talented, charismatic, and successful professionals decide to become street-side hotdog vendors, the end is nigh. I'm still not sure when, but if your keeping score at home, then you'll have to give this round to Puerto Rico's very own "Gran Depresión." For not only are we losing talent to the U.S in droves, we are now losing it to the underground economy. Either way it means one less planilla, one less contributor to Hacienda's income stream. Looking at my scorecard, I'd say that Puerto Rico's economy and government (and therefore any chance of economic recovery) is losing and the "Gran Depresión de Puerto Rico" has us on the ropes. The knockout blow should be coming any time now.

4 comments:

Gabriel

20 de marzo de 2009, 00:05
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dijo...

At a previous job, we had a hot dog stand in front of the building operated by a licensed nurse. Before the cart, he worked at Centro Medico. Great guy, he liked that selling hot dogs and potatoes he could drive his kids to school and pick them up. No grueling working conditions, no stress. Last I heard, he had 3 carts in different areas so I guess its going well for him.
I don't know how to feel about this trend. On one side, its another aspect of our brain drain. On the other its really Entrepreneurial Spirit, working for oneself. The proliferation and success of small and very small business is essential to our country but we need more companies offering higher value services, not just cheap food.

MC Don Dees

20 de marzo de 2009, 10:59
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dijo...

Two points:

1. I agree this does show some entrepreneurial motivation, but the only thing that will drive economic growth in PR is either small companies that grow into big companies or big companies that spin off other big companies created form R&D.

2. I might even go so far as to say that I agree 100%, except in each of these cases, we have a tax payer who completely disappears from the Hacienda revenue stream. It's like they left the island, but stick around and consume its' resources. As Gil repeatedly says, if it was easy to build a legitimate business as it was an underground one, then more entrepreneurs would choose the legitimate way.

3. And finally, just to be clear, while we all cheat a little on our taxes, we all do so at the risk of having to pay back on any savings, plus interest, and penalties. Well, that is if we are caught.

But when you step out of the system completely, as it stands now, there is little or no risk you'll ever be caught and be required to pay back taxes owed.

So not only do we have a government that is so huge it's like an anchor on our economy, that anchor is around only those who actually pay taxes; a number which shrinks daily.

Gabriel

31 de marzo de 2009, 15:46
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dijo...

Nothing much to add except to say I just finished reading how the Fiscal Emergency Act is going to cause us even more tax administration overheard. Government is so clueless it would be funny except its just tragic. I bet this will drive more to the gray market.
Oh, and did you do Hacienda style accounting on purpose? You said 2 points but made 3 ;-)

Anacorider

18 de abril de 2009, 19:56
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dijo...

If Puerto Ricans exerted the same amount of effort in preparing themselves, rather than gaming the system, the economic situation on the island would be significantly improved.

Acording to Social Security I worked for 47 years, which squares with starting at age 20 and retiring at age 67. I worked for the first 24 years for a major petroleum company which was acquired in 1984 by another major company. During this period of time I was transferred three times, including Puerto Rico in 1966, married, obtained a degree attending University at night, earned a CPA License and rose steadily in the organization occupying positions of increasing responsibility.

I spent the other twenty three years at five other firms not as large as the first, but in managerial positions as Country Controller, CFO and General Manager. We transferred to Puerto Rico a second time in 1998, when Hugo Chavez disinvited us from Venezuela, and I thought I wanted to retire. A very bad decision.

The period of employment on the island was eye-opening. The majority of employees acted as if their employer owed them something, whether salary, a position or some type of recognition completely out of proportion to the contributions they made to the common corporate effort.

Employment at a firm is not the same as Secondary School, but many employees were perennial adolescents. People need to look insightfully at themselves and determine who they really areand wha they contribute, but what are the chances of this occurring?

If there were a change in attitude then perhaps an environment could be created where government would be responsible, spend the peoples money wisely and provide realistic government instead of the self-serving bombast which has been typical of the past 43 years.