October 1, 2009 — vol. 45, no 8
Puerto Rico to lay off 16,000 workers, cut deficit
SAN JUAN, Puerto Rico — Puerto Rico’s government announced last Friday that it will lay off more than 16,000 public workers in the U.S. Caribbean territory, adding to an unemployment rate higher than that of any U.S state.
The government hopes the layoffs will help close a $3.2 billion deficit as the island struggles through its third year of recession and a 15 percent unemployment rate.Union leaders announced an island-wide strike in protest, scheduled for Oct. 15.
The layoffs of 16,970 employees are needed to prevent the government from shutting down and sinking the island’s credit, said Carlos Garcia, president of the Government Development Bank of Puerto Rico.
“Today is an extremely difficult day for all Puerto Ricans,” he said.
Most workers will be laid off Nov. 6 in a move expected to save $386 million, he said.
However, 500 of those workers will be contracted by the Treasury Department to help collect $3.6 billion in outstanding debts owed by residents, private corporations and other entities. It is unclear whether the contracts will just be temporary.
Gov. Luis Fortuno said the layoffs were unavoidable.
“Not doing anything would have been devastating to our economy, your pocketbook, your family and our society,” he told Puerto Ricans in a pre-recorded message issued to the news media. “It would have meant more increases, more taxes and another government shutdown.”
In May 2006, a budget standoff forced a partial government shutdown.
Garcia said the layoffs were delayed because 75 percent of 134 governmental agencies did not have statistics about their employees or their responsibilities. He said officials identified 800 employees not accounted for within the Corrections and Public Works departments.
They also found employees in jobs they were not hired for, such as a low-level secretary who oversaw air operations at a local military base and an office clerk who served as a bailiff, Garcia said.
The layoffs mean unemployment will now rise to 17 percent, Garcia said.
Jose Rodriguez Baez, president of a union that represents about a third of the island’s 200,000 public employees, said that other protests beyond the strike also are planned.
Rey Rosario, a 34-year-old teacher, argued the layoffs will only worsen the economic crisis.
“This will have a domino effect on the economy because with less income there is less consumption,” he said. “This is an insensitive act, and layoffs should always be the last alternative.”
Eight thousand workers were fired in May.
(Associated Press)
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