Puerto Rico: austerity law may spark strike

As of June 19 several Puerto Rican public employee unions appeared set to call a general strike to protest Law 76, a special austerity measure that Gov. Alejandro García Padilla signed on June 17. A coalition of 35 unions said it had selected a date for a general strike but would keep it secret so as to take the government by surprise; the union didn't describe the form the strike would take. Two major unions—the Union of Workers of the Electrical Industry and Circulation (UTIER), which represents workers at the Puerto Rico Electric Power Authority (PREPA, AEE in Spanish), and the Authentic Independent Union (UIA), which represents workers at the Puerto Rico Aqueduct and Sewer Authority (PRASA, AAA in Spanish)—held strike votes on June 17 and then staged a protest at San Juan's Plaza Las Américas shopping mall. Some unions also started holding smaller job actions in the first week of June. In October 2009 the unions responded to earlier austerity measures with a powerful one-day general strike, but it was unclear whether they would be able to mount a similar action now.

Law 76, the Special Law of Fiscal and Operational Sustainability of the Government, is a response to a fiscal crisis from February, when US rating agencies decided to reduce Puerto Rican bonds to junk status. The measure allows the government to renegotiate public employees' contracts, liquidate unused sick days and freeze salaries; there are also options for privatizing PREPA and closing 100 public schools. Investors seemed unsure the austerity measures would work: yields on the $3.5 billion junk bonds issued in March soared in June, reaching 9.65% on June 19.

Union leaders insist that the drastic measures are unnecessary. On June 20, Julio Vargas, the president of UTIER's Solidarity Program (ProSol), charged at a press conference that management employees had given themselves raises of as much as $3,500 a month in the last third of 2013, shortly before insisting on sacrifices by unionized workers. Meanwhile, UIA president Pedro Irene Maymí told demonstrators outside the Government Development Bank that day that the government had outsourced work in a total of $8 billion in contracts, not the $1.5 billion claimed by Gov. García Padilla. "This is the way they're carrying off the money, to García Padilla's friends," Maymí said. The Puerto Rican Socialist Workers Movement (MST) called for the government to declare a moratorium on the public debt. (In These Times, June 9; Reuters, June 19; El Nuevo Día, Guaynabo, June 20; Prensa Latina, June 21)

From Weekly News Update on the Americas, June 22.