Puerto Rican government unveils anti-worker austerity plan

On Wednesday September 9, Governor Alejandro Padilla announced his government’s plan to deal with Puerto Rico’s historic debt crisis. The plan is a frontal attack on education, health care, jobs and living standards.

The five-year plan, elaborated by Padilla and the Popular Party government, contains an extensive series of budget cuts to deal with the Island’s $72 billion public debt. The government proposal also calls for a restructuring of the debt, asking bondholders to accept longer payment terms and lower interest payments.

The austerity and restructuring plan closely follows the recommendations outlined in a document entitled “Puerto Rico—a way forward,” co-authored by former International Monetary Fund officials, including Anne Krueger and Andrew Wolfe. That paper recommended “pro-growth supply-side” measures to lower labor costs and business taxes in Puerto Rico. It advocated measures such as the elimination of the federal minimum wage, tightening of welfare eligibility, gutting of job-protection regulations, “relaxation” of labor laws for youth and new entrants into the jobs market, and an assault on public education.

Padilla recognized that these new measures come on top of a decade recession, budget cuts, regressive tax increases and higher fees for transportation and other public services (“We have asked our people to sacrifice a lot,” he said). However, he now proposes to ratchet up the attacks on jobs and living standards.

Read more: https://www.wsws.org/en/articles/2015/09/11/puer-s11.html