Puerto Rico labor fights mass layoffs
120,000 public employees return to work
By
Tom Soto
San Juan, Puerto Rico
Published May 16, 2006 10:36 PM
Some 120,000 public
employees returned to their jobs in Puerto Rico May 15 after being laid off for
two weeks. On May 13, after experiencing the impact of large and often militant
worker protests, and the loss of several hundred million dollars from Puerto
Rico’s economy, the legislature and Gov. Anibal Acevedo Vilá had
come to an agreement on securing a new loan to cover the current budget deficit
of $750 million. Repayment of the loan will come from a consumer sales tax that
has not yet been approved.
Teachers union local from Quebradillas, Puerto Rico. May 5.
WW photo: Tom Soto
|
Earlier, on May 12, tens of thousands of public
employees and their supporters marched to the legislature, demanding
reinstatement and opposing the unfair imposition of a consumer sales tax. The
legislature and the governor consider this tax a “solution”to Puerto
Rico’s ongoing fiscal and debt crisis. (See related WW article published
on May 4.)
Unions at the march included the Puerto Rican Workers Council,
the Workers Federation of Puerto Rico AFL-CIO, the Federation of Teachers of
Puerto Rico, the Puerto Rican Workers Union, the General Workers Union, the
Teamsters Union, and dozens of others representing public employees and the
labor movement generally.
Starting at 6 a.m. on May 11, contingents of
workers wearing union T-shirts and carrying colorful flags and banners took over
the “Dos Hermanos” (“Two Brothers”) bridge in the
Condado area of San Juan, an exclusive hotel-dominated tourist area. At the same
time, Teamsters Local 901 and the United Front of Truck Drivers parked their
huge transport trucks in the middle of the streets in front of Puerto
Rico’s Convention Center complex.
The demonstration was impressive.
As the front of the march neared the legislature, the end of the march,
consisting of the transport trucks, was still leaving the gathering
site.
Though the labor movement pulled off this big demonstration, it is
divided as to how to confront an impending 7-percent consumer sales tax and the
layoffs the government plans when it gets down to “cutting
spending.”
Some unions, such as the Federation of Teachers of Puerto
Rico, the Electrical Industry Workers Union, the Teamsters, the Brotherhood of
Exempt and Non-Educational Employees and others, oppose imposing any sales tax
on the working class. They have instead advanced the programmatic demand that
banks and corporations be taxed.
On the other hand, the Workers Federation
of Puerto Rico AFL-CIO, the AFSCME affiliate United Public Servants, the Puerto
Rican Workers Council and their allies, who constitute a large block of
organized labor, are conciliatory and ready to accept an across-the-board
consumer sales tax.
Government ordered layoffs
On May 1 the
central government of Puerto Rico laid off 95,000 public employees, partially
closing 45 government agencies and shutting down the public school system, which
disrupted the education of 560,000 students. Fifteen of Puerto Rico’s 78
municipalities also partially shut down, resulting in layoffs for 25,000
municipal workers.
That’s 10 percent of the labor force laid off in
one stroke. This is the equivalent of laying off 15 million workers in the
United States.
Unprecedented in Puerto Rico’s history, the mass
layoffs ushered in a sudden economic downturn and uncertainty, as 1.4 million
workers and their families pondered what was going on with the economy and what
was going to happen next.
The Puerto Rico Chamber of Commerce and Exports
reported that in the first seven days of the layoffs, consumer retail sales
across Puerto Rico were down 24 percent, amounting to a loss of $120 million as
compared to consumer sales last year in the same period. Losses due to lost
sales for small merchants were reported as even worse.
Many private
businesses began to lay off part-time employees. By the second week of this
crisis, losses were projected totaling close to $300 million.
Since the
crisis exploded on May 1, when Gov. Acevedo Vilá of the Popular
Democratic Party invoked the layoffs, workers have protested daily, demanding
that the government reinstate the public employees. Union delegations have been
constantly lobbying members of the Legislature—which is dominated by the
pro-statehood New Progressive Party—to approve legislation authorizing
borrowing to cover the current budget deficit and return public employees to
their jobs. The current fiscal year ends on June 30.
Unions have set up a
24-hour-a-day encampment before the legislature. Individual unions, student
groups, religious orders, women’s organizations, anti-poverty groups,
associations of the elderly and gay groups have all participated in protests in
front of the legislature and in front of the governor’s mansion. Some have
gone to Puerto Rico’s financial district, pointing to the banks and
corporations as the real culprits.
External debt and capitalist
loans
The current crisis was let out of the bag when Wall Street bond
holders—mostly banks, investment houses and money
managers—represented by Moody’s Investor Services and Standard &
Poor’s threatened to lower the rating classification of government
bonds.
These bond holders demanded that the Puerto Rico government carry
out “austerity measures” like cutting spending and securing new
revenue sources, thus ensuring interest payments on Puerto Rico’s external
debt, which is close to $45 billion.
Puerto Rico has the biggest per
capita debt in all of Latin America. Servicing the total government debt currently requires a yearly outlay of $3 billion and this amount is growing.
Lowering the rating of Puerto
Rico’s government bonds would decrease their value on the capitalist bond
market and increase the interest rates charged for any future loans made by the
government through bond offerings.
What this boils down to is that a
bigger portion of the value of what workers in Puerto Rico produce will now be
extracted from them to pay for the loans made by the bourgeoisie through its
political parties. The workers will have to pay a higher interest rate when the
capitalist government borrows money. Overall, it is an inflationary measure, a
wholesale expropriation of the purchasing power of the masses.
On May 8,
in the middle of this crisis, Moody’s Investor Services did just that,
with Standard & Poor’s positioned to do the same in the coming weeks.
Moody’s announced that due to the “Commonwealth’s strained
financial condition, and ongoing political conflict and lack of agreement
regarding the measures necessary to end the government’s multi-year trend
of financial deterioration,” it was downgrading Puerto Rico’s
government bonds to one notch above junk-bond status.
The announcement
sent shock waves throughout Puerto Rican society, further fueling an already
pessimistic atmosphere and deepening the crisis even further.
To satisfy
Wall Street’s demands, legislators from the two bourgeois
parties—the Popular Democratic Party and the pro-statehood New Progressive
Party—have been imposing austerity measures. These include cutting public
services, forcing the early retirement of public employees, increasing the rates
charged for electricity, water, highway tolls, public transportation, increasing
tuition at the public universities, etc. But the key issue remains imposing a
consumer sales tax that would guarantee debt-service payments.
Teachers
and Electrical workers unions: ‘Let the rich pay’
The most
vocal and consistent opponents of the layoffs and against the consumer sales tax
have been the Federation of Teachers of Puerto Rico, the Electrical Industry
Workers Union, the Teamsters, the Brotherhood of Exempt and Non- Educational
Employees and their allies.
On May 5, which in Puerto Rico was Teachers
Day, some 5,000 teachers converged on the steps of the legislature demanding
immediate reinstatement. The teachers proposed a 5-percent tax on the net
earnings of corporations making more than $10 million, and another 4 percent on
all corporations’ gross income.
Using the pressure of thousands of
teachers practically occupying the south side of the legislature, a delegation
of six union leaders entered the besieged legislature and actually met with
José Aponte, president of the House of Representatives, and made this
proposal. Later the teachers and the union leaders marched militantly to Gov.
Acevedo Vilá’s mansion, sitting down with the governor and making
the same proposal.
The fact that these meetings took place at all is
remarkable. It shows how nervous the bourgeois politicians are about the labor
movement becoming radicalized and militant, given the current
crisis.
Workers developing independent voice
Putting forth
the important slogan of “let the rich pay” and proposing a specific
legislative measure before the politicians, coupled with the mobilization of
thousands of workers and the publicity the proposal has received, has begun to
give the working class an independent voice in this current phase of the
struggle, where the bourgeoisie is seeking to resolve the capitalist monetary
crisis on the backs of the working class.
Banco Popular, the largest bank
in Puerto Rico, has been put on the defensive. During every workers’
protest in the financial district, large numbers of Puerto Rico’s riot
police have surrounded the bank’s offices. On May 7 Banco Popular took out
a full-page ad in Puerto Rico’s largest newspaper that read in part,
“We don’t understand why we are being singled out as being
responsible for the crisis.”
The economic and political crisis has
put all the contending class forces of Puerto Rican society into motion, each
one advocating in its own interests.
In light of the tumultuous events of
the last two weeks, it is no wonder that when the Federation of Teachers and
their supporters launched a campaign to “Stop the Profits of the Big
Corporations and Banks,” picketing the Pan American pier and delaying the
departure of a luxury cruise ship for five hours, the capitalist establishment
began to worry.
What had been projected by the bourgeois politicians and
media as a narrow fiscal crisis based on a budget deficit has been exposed as
full crisis of capitalism.
Articles copyright 1995-2012 Workers World.
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