September 27, 2009: Puerto Rico Announces Plan to Furlough Over 16,000 Public Workers

Following the furloughs of nearly 8,000 workers in May, Puerto Rico announces that it will lay off an additional 16,970 public workers to prevent a government shutdown as well as to prevent damage to the island’s credit. Government officials are hoping that the layoffs will assist in allaying a $32 billion deficit. Cuts in contract spending, a freeze on hiring, and temporary taxes have already been implemented. The island is in the third year of a recession and the unemployment rate is at 15 percent. Says Carlos Garcia, president of the Government Development Bank of Puerto Rico, “Today is an extremely difficult day for all Puerto Ricans.” Garcia adds that, as a result of the layoffs, the island’s unemployment rate will rise to 17 percent, higher than any US state. Some of the workers will be contracted by the US Treasury to assist in collecting outstanding debts of over $3.6 billion owed by residents, private companies, and other entities. Others will be hired for jobs in education. Most workers will be laid off on or around November 6. According to Garcia, the move could save the island $386 million. “The layoffs are unavoidable,” Governor Luis Fortuno tells Puerto Ricans in a recorded news media event. “Not doing anything would have been devastating to our economy, your pocketbook, your family, and our society,” he says. “It would have meant more increases, more taxes, and another government shutdown.” Organized labor leaders have announced an October 15 protest to be held all over the island. [Huliq News, 9/25/2009; Associated Press, 9/26/2009]