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Vol. 81/No. 34      September 18, 2017


US board orders wage, pension cuts in its colony Puerto Rico

The U.S. ruling families and their colonial regime in Puerto Rico are stepping up attacks on the wages, pensions and living conditions of workers on the island.

To maximize payment of some $74 billion in government debt to wealthy bondholders, they aim to “right-size” the colonial regime — a euphemism for laying off public workers and cutting social services. Over the next three years they plan to slash the budget of the U.S. colony by 30 percent.

All pretenses that Puerto Ricans and the colonial government there call any of the shots were torn apart when then President Barack Obama appointed a Financial Oversight and Management Board for Puerto Rico in 2016 and gave it dictatorial control over the island’s government finances. When Gov. Ricardo Rosselló chafes at the speed they want him to move in making working people pay for the crisis, they just push harder.

In an Aug. 4 letter, José Carrión, chair of the junta — as people in Puerto Rico call the board — praised Rosselló for the new budget he approved, which includes $662 million in deep cuts for the coming year. But it’s not enough, Carrión complained. The junta wants $218 million more right away.

He ordered Rosselló to furlough government employees two days a month and to make mandatory an additional 10 percent cut in public pension payments. Rosselló worried that going that far might provoke big protests, so the junta sued the Puerto Rican government Aug. 28 to get its way.

“The governor always says he’s not going to give in to the junta’s demands, but in the end he always does,” Verónica Figueroa, 23, told the Militant in a phone interview from Caguas. She was part of the two-month-long student strike this year against government plans to slash the University of Puerto Rico’s budget and graduated in August. “He wants to give the impression that the government is trying to defend some of the rights of the people.”

The school’s budget was cut $202 million for the coming year, she said, and tuition and other fees are being more than doubled.

Even though they weren’t successful, Figueroa said that she was inspired by participating in the movement. Now that she has graduated, she’s looking for ways to stay involved in the fight against the attacks on workers and youth.

Imperialist plunder

The effects of the worldwide capitalist economic crisis are magnified in Puerto Rico because of its status as a U.S. colony. U.S. imperialism has plundered its resources and the wealth created by the island’s workers to fill the coffers of U.S. capitalists since wresting control of the island from Spain in 1898. As a result the average annual income in Puerto Rico is less than half that of Mississippi, the poorest U.S. state.

Puerto Rico’s gross national product has declined 18 percent since 2006. A nearly 70 percent cut in infrastructure spending by the government and government-owned utilities has left roads and the electrical grid in bad shape. Power outages are becoming more frequent.

Since 2006 the government cut spending by 12 percent, laid off nearly one-quarter of the government workforce, jacked up sales taxes, closed schools and reduced pensions.

With a population of 3.35 million, official unemployment stood at 9.8 percent in July, down from 12 percent in February. But in fact there is no “decline” in unemployment. Workers and youth are fleeing the island in droves, skewing the figures. As many as 1,700 people a week move to the U.S. to escape the deepening crisis.

“Everyone knows someone who has moved,” said Figueroa. “A friend of mine moved to Boston. She got a job, but she still has to work overtime every day to make ends meet. The cost of living and rent are so high, there’s not much left over.”

Attack on pensions

Roselló signed a law Aug. 23 that eliminated the pension funds for government and judiciary workers and teachers, and ordered fund managers to sell all their “assets” and turn the money over to the government’s general fund. Whatever workers get in the future will depend on the state of this fund.

Any remaining “defined benefit” plans — which are supposed to guarantee a pension amount — are being replaced with “defined contributions plans,” where money is deducted from each workers paycheck and “invested” in stocks and bonds.

“They’ve changed the rules of the game,” Iván Vargas, a worker at the Water and Sewage Authority and a member of the independent union there, told the Militant from Mayagüez Sept. 3, but workers have no idea who will run this operation or how it will work.

“The health care crisis is getting worse,” Yazmín López, a nurse in Mayagüez, told the Militant. “The cost of medicines are very high. So many doctors have left the country that you can wait six months to see a specialist.” An even bigger crisis is looming in March 2018, when a one-time fund to shore up the island’s Medicaid program will run out.

Workers have a wide variety of opinions on whether Puerto Rico becoming independent or a U.S. state would help them fight the crisis. Or whether the answer lies in emulating the example of the Cuban Revolution, wresting freedom from Washington by overthrowing capitalist rule.

Vargas noted that Rosselló supports statehood. “They make it sound like statehood would be a magic wand to solve our problems,” he said. “But it’s not like that, Washington’s not going to just start sending us dollars.”

Figueroa says she’s a supporter of independence. “And it should be a socialist project,” she said. “It’s a question of Puerto Rico for whom. Are the rich people going to keep making the decisions with more problems for the poor, the working class and the middle class? Or will it mean a different road for the country?”

Protests against the attacks from Washington and the colonial regime continue, as well as the debate on how to move forward. Hundreds of unionists demonstrated in San Juan Aug. 30 against the furloughs, pension cuts, new taxes and increases in utility bills. “They’re taking advantage of us poor workers. We did not steal. We are not corrupt,” read the sign carried by  
70-year-old retired government worker Eva Feliciano.  
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