In Puerto Rico, young adults are facing financial difficulties, which has led to some returning home.

• The report "An Overview of Factors Tied to the Financial Capability of Adults in Puerto Rico" revealed that 59% of adults aged 18 to 29 on the island are financially fragile, compared to 47% of those aged 30 to 54 and 41% of those aged 55 or older.
• Harold Toro, Research Director and Churchill G. Carey, Jr. Chair in Economic Development Research at the Center for a New Economy, stated that the research highlights things that people experience and feel but are difficult to quantify.

A study reveals that young adults in Puerto Rico are facing financial instability.

A September report from the Financial Industry Regulatory Authority Investor Education Foundation states that approximately 47% of U.S. respondents are financially fragile and lack confidence in their ability to withstand a $2,000 economic shock.

Harold Toro, co-author of the report and research director and chair in economic development research at the Center for a New Economy, stated that this is the first time a study of this nature has been conducted on Puerto Rico.

Toro stated that it emphasizes aspects that individuals experience and feel, but which are challenging to quantify.

According to FINRA, more than half of adults aged 18 to 29 on the island are financially fragile, compared to 47% of those aged 30 to 54 and 41% of those aged 55 or older. The organization surveyed 1,001 adults living in Puerto Rico in 2021.

According to Olivia Valdés, senior researcher at the FINRA Investor Education Foundation, the financial situation in Puerto Rico is dire when compared to the mainland United States.

In Puerto Rico, young adults face higher financial fragility compared to those on the mainland U.S. Specifically, 59% of 18 to 29-year-olds in Puerto Rico are financially struggling, compared to 38% of the same age group in the U.S., according to FINRA data.

In 2021, approximately 30% of U.S. residents were financially fragile, as per FINRA's latest report on financial capability in the United States, which surveyed 27,118 U.S. adults. The Puerto Rico survey was conducted simultaneously.

Young adults in Puerto Rico often depart to enhance their financial prospects through education or job opportunities in the US or abroad. However, those who remain face challenges such as a struggling economy, an unstable power grid, and exorbitant expenses for basic necessities like housing.

Experts suggest that understanding why young Puerto Ricans are financially unstable could aid in retaining younger residents and attracting working professionals back to the island.

"Surviving in Puerto Rico is not enough; it must also be a place where one can flourish," said Fernando Tormos Aponte, an assistant professor of sociology at the University of Pittsburgh.

Young Puerto Ricans are 'having a tougher time'

Typically, people experience financial strain when they are just starting out. However, financial stability tends to improve with age.

Young adults in Puerto Rico are more financially fragile than those in the U.S.

Younger individuals appear to be facing greater challenges, Toro remarked.

FINRA discovered that adults aged 18 to 29 in Puerto Rico are less likely to have emergency and retirement savings compared to those aged 30 and above.

In Puerto Rico, less than a quarter of 18- to 34-year-olds have any type of retirement account, while on the mainland U.S., 43% do, according to the broader FINRA analysis.

In contrast to older residents, young adults in Puerto Rico are more likely to carry both student loan and medical debt.

Younger generations only know a Puerto Rico in crisis

Advantage Business Consulting, a market analysis and business consulting firm in San Juan, Puerto Rico, stated that Puerto Rico's economy is doing quite well, according to founder and president Vicente Feliciano.

The job market has improved, and salaries are growing at a faster pace than inflation due to the increase in minimum wage, according to Feliciano. In Puerto Rico, the federal minimum wage is $10.50.

Since mid-2022, the Federal Reserve Bank of New York reported that private sector employment reached a 15-year high.

The median household income on the island was $25,621 in 2023, which is significantly lower than the $80,610 median household income in the mainland U.S., according to Census data.

Despite recent improvements, the depression that Puerto Rico experienced from 2006 to 2015 has significantly impacted the working lives of adults under 40, according to Feliciano.

"The younger generation has been dealing with financial difficulties for more than two decades, and they are becoming increasingly frustrated with the traditional political parties, which they blame for their problems, whether or not it is their fault."

'We want people to come back'

In 2019, Alejandro Talavera Correa relocated to Washington, D.C. for a finance job that offered a competitive salary and was too good to resist, he stated: "Competitive salaries require individuals to leave."

In a few years, he returned to Puerto Rico.

El Comeback, an online job board, helped Talavera Correa, now 28, find a job opportunity in Puerto Rico that met market salary standards or offered benefit packages.

"Ana Laura Miranda, project manager of El Comeback, stated that the company wants people to return. However, she emphasized the need for realism and suggested investing in employees. If salaries cannot be provided, she recommended creating benefit packages."

The platform's primary users are typically in their late 20s to mid-late 30s, ranging from single adults to families with children, as stated by Miranda.

In states with abortion restrictions, over 3 million Latinas experience financial insecurity.

Miranda stated that the initiative, though in its initial stages, has successfully drawn and retained 51 candidates.

Young workers returning to Puerto Rico may face new financial challenges, said Miranda, while candidates often seek to be close to family or regain a sense of belonging or warmth.

""Always expect a pay cut for six-figure salaries on the island, as they are less common than in the U.S." - Miranda emphasized that Puerto Rico is not inexpensive, and the cost of living is a reality that cannot be ignored."

The island, similar to the mainland U.S., faces an unaffordable housing market for many residents, and a car is necessary to navigate due to the unreliable public transportation services.

During the pandemic, Talavera Correa was fortunate to purchase a condo at a low mortgage rate.

Talavera Correa stated that if one does not possess that amount of money, they are left with no other option but to either rent or reside with their parents.

Despite being a typical Puerto Rican on the island, he grapples with frequent power outages and electricity issues. These issues force him to visit his mother's house, which has more dependable service thanks to her solar panels.

"Advantage Business Consulting's Feliciano stated that blackouts and electricity issues are common occurrences. He pointed out that electricity is a significant difference between the U.S. and Puerto Rico, and it affects the younger generation more than the wealthier, older generation."

Despite the challenges, Talavera Correa is happy with his decision.

The quality of life in Puerto Rico is essentially determined by the beaches, outdoor activities, and the potential for a happy life, as stated.

"If economic constraints or overall living situations related to electricity and water disappoint people who return, it is a common occurrence."