Widespread Puerto Rico protests for higher government salaries are pressuring the local government both in the short- and long-term.
An expanding number of government workers have joined a march to the governor’s office to ask for improved salaries and retirement benefits. Called the “Grand March of Indignation,” the workers were scheduled to end up in front of the governor’s office Wednesday afternoon.
In the last few weeks teachers took the lead in seeking pay raises. A bill was presented in the legislature to increase their pay by $1,000 per month. Gov. Pedro Pierluisi said he supported the proposal but the Oversight Board rejected it.
The board announced it would grant a pay raise of $235 per month as of July 1 and an additional $235 per month on Jan. 1, 2023, dependent on the completion of certain milestones.
Pierluisi on Monday said he would use federal grant money to temporarily boost teacher salaries, when combined with the board-approved General Fund money, by $1,000 a month. This would last until September 2024, when the federal money would run out. In the meantime, Pierluisi said the local government would look for ways to make the raise permanent.
Since then, other branches of government workers have joined in seeking raises.
On Tuesday Puerto Rico Attorney John Mudd tweeted, “Now the whole government wants a raise and they want to recruit more employees. Insolvency is inevitable with this attitude.”
Asked if the calls for raises threatens the long-term fiscal stability of the government, Mudd told The Bond Buyer, it “depends on whether the government will give in to the demands and to what extent.”
Asked about Pierluisi’s promise to use federal funds for a $1,000 per month raise, the Oversight Board said Tuesday, it "has always supported increases in teachers’ salaries. Teachers are crucial for improving Puerto Rico’s education system and supporting economic development."
The board noted that salaries were increased in fiscal 2019 by $1,500 per year and by $500 per year in fiscal 2020.
The January updated certified fiscal plan added an incremental increase in teachers’ salaries by 20% starting in fiscal year 2023, "as much as fiscally possible under Puerto Rico’s General Fund budget given the incremental investments made in other civil service salaries, the pension reserve trust, and police pensions," the board said.
“The Oversight Board has no oversight over the Puerto Rico government’s use of federal funds, which the governor has now made available to additionally support the salaries of teachers,” the board said.
Another Puerto Rican analyst said the real concern was a repeat of the demonstrations that forced former Gov. Ricardo Rosselló to resign in the summer of 2019. Whereas those demonstrations encompassed demonstrators from a wide swath of Puerto Rico’s populace, the current demonstrations so far are just from Puerto Rico’s public sector employees.
“I don't think it will hurt the fiscal stability in the short term (it will be paid federal funds that will last until 2024). But his bending to the teachers' demands will only encourage more demonstrations, like today's, and weaken his image," said University of Puerto Rico Professor José Garriga Picó. "The labor movement, the left, and the Popular Democratic Party are bent on ousting him by the summer.
“Political instability could be a more serious threat to fiscal stability,” Garriga Picó continued.
Pierluisi last week said he wanted to do “salary justice” to the teachers and firefighters but that despite the protests the teachers must continue teaching and public safety must be assured. As much as 72% of teachers were absent from work last week.
“We are pleased that Governor Pedro Pierluisi has finally backed the legislation that originated in the House of Representatives to give teachers a $1,000 increase… ," Popular Democratic Party Representatives Domingo Torres García and José Anibal Díaz Collazo said on Monday. “In the House of Representatives, we will continue working to improve the working conditions of our essential-service providers such as nurses, firefighters, police, paramedics, social workers, and employees of the Department of the Family, among others."
