Monday, November 29, 2021

PPT Platform: Fighting the Good Fight for Workers or Selling Pipe Dreams?

By on November 4, 2016

Editor’s Note: This is the fifth article in a series analyzing the government platforms of Puerto Rico’s gubernatorial candidates and their implications alongside the Financial Oversight & Management Board.

SAN JUAN – If Rafael Bernabe becomes the next governor of Puerto Rico, the first thing on his agenda will be to require the U.S. Congress to repeal the Puerto Rico Oversight, Management and Economic Stability Act (Promesa).

His approach is based on the possibility that the people will elect the Working People’s Party (PPT by its Spanish initial) candidate, who openly opposes the fiscal oversight board in charge of negotiating the island’s debt, estimated at around $70 billion. His party’s opposition is similar to that shown by the Puerto Rican Independence Party (PIP).

Working People's Party (PPT) gubernatorial candidate Rafael Bernabe arrives to the Junteconómico Gubernatorial Forum (Juan J. Rodriguez/CB)

Working People’s Party (PPT) gubernatorial candidate Rafael Bernabe arrives to the Junteconómico Gubernatorial Forum (Juan J. Rodriguez/CB)

“If we win the elections, that would send the clearest message to Congress that the country, by voting for the PPT, is rejecting the structure created by Promesa as the appropriate mechanism to address Puerto Rico’s crisis. If the PPT wins, it would be a totally different political situation,” Bernabe told Caribbean Business.

Meanwhile, the university professor would push passage of three key initial bills. The first would appoint a committee “with broad Puerto Rico and international representation to complete the audit of the debt as a step to cancel any debt that is illegitimate or illegal.”

The second bill would establish public policy on government priorities in terms of the debt-restructuring process. In this regard, the PPT has prioritized keeping pensions and public employment with all their benefits, as well as ensuring essential services on the island.

See also: PDP platform: Is it possible to reform government without laying off public employees?

The third bill would create a “strategic economic planning body that would have the representation of all sectors” to evaluate policies related to industrial development and tax exemptions in Puerto Rico, in a manner that would further the PPT’s plans for economic growth and at the same time, distribute wealth equally by increasing employment benefits for workers.

As its name suggests, the PPT is the party that promises the greatest benefits for the island’s working class, including adjusting wages periodically upward to keep pace with the rate of inflation, an automatic pension adjustment, a scaled increase in the minimum wage, establishing a paternity leave of 30 days and reducing the hours to seven hours daily (35 hours weekly) without entailing a salary reduction, among others.

To achieve economic growth, the PPT rejects privatization and promotes greater government control of the private sector. It also favors raising taxes on big business under the premise that wealth is being taken out of the island, as well as reducing so-called regressive taxes such as the sales and use tax (IVU by its Spanish acronym), because it affects the poorest classes.

Similarly, the PPT seeks to guarantee the rights of the LGBT communities and women, as well as ensuring the safety of the elderly population, the fastest growing on the island, with proposals such as the creation of a universal pension plan that includes public employees and private workers who don’t receive Social Security benefits.

See also: Cidre’s Platform: Does a business-centric vision work for Puerto Rico?

‘Dreams’ of PPT could be dulled with fiscal control board

According to economist José Alameda, the PPT’s proposals of greater benefits to workers are positive, but rather should be seen as “dreams” that a party with little chance of being elected “is selling.”

Although the provision of better employment benefits “is magnificent,” the economist thinks that the current economy limits their development, and that employers “typically complain about this sort of thing,” although findings show that a well-paid employee can be more productive.

“In the current situation, it will be very difficult [to increase workers’ profits] because you have an external entity, which is the joint fiscal control, that will regulate and control these proposals and ensure they are feasible within the Promesa’s framework…. You can oppose anything and use the principle of authority, but politically we must recognize that Puerto Rico is a U.S. territory and that this power is within the framework of Congress,” Alameda told Caribbean Business.

For political analyst Ramón Rosario, these higher labor benefits “go against what we want, that small and midsize businesses and others create jobs and begin to grow. People always talk about Singapore, but they forget that their laws put few legal burdens on employers. “

See also: PIP platform: Out of touch with reality or a fight against the board?

However, Bernabe explained that these benefits would come with the economic growth they are pushing, which would go hand-in-hand with the debt renegotiation. “If we only try to improve the conditions of workers, it will be a problem if we don’t have economic growth. At the same time, if we generate economic growth and don’t ensure the rights of workers, such growth will be distributed very unequally. We want to distribute both aspects,” he said.

About the right to strike for all workers, Rosario, who was legal adviser to former Gov. Luis Fortuño, said it could lead to a “disaster” in government agencies such as the Police, Fire, Education or Health departments if those entities are paralyzed without providing essential services to the people.

The PPT candidate said he trusts the common sense of workers who “are responsible people and wouldn’t use the right to strike in a way that would endanger the lives of people.” In fact, he said workers are allowed to strike in private hospitals and even in times of strike, workers have been able to address emergencies at the same time.

On the other hand, Rosario said the PPT platform doesn’t consider that the elimination of privileges to large companies and increased taxes could result in the exit of said companies, which currently generate hundreds of jobs on the island.

In response, Bernabe claimed that such large companies “are already on the way out,” despite any tax exemptions. “We have a policy of tax exemption that isn’t creating jobs and at the same time allows a huge amount of profit to leave the island,” he said.

See also: Lúgaro’s Platform: A new vision or absence of a specific plan?

To boost economic growth, the PPT proposes to develop cooperatives in different areas and increase agriculture, something the economist Alameda believes would need large government incentives.

“Most agriculture in the world is highly subsidized due to production costs and because it requires that you keep production under certain regulations,” said Alameda, who believes that local production would have two limitations: first, it could be more expensive than offshore production; second, the limits of Puerto Rico’s relationship with the United States, which prevents protecting the local market over those of other U.S. jurisdictions.”

Meanwhile, Rosario felt that Puerto Rico isn’t necessarily competitive in the agricultural sector, and suggested a balance between “protecting our resources and not limiting the generation of economic activity.”

On the subject, Bernabe said that “we have a different perspective” that proposes the redistribution of incentives currently offered to companies like Monsanto for the development of genetically modified seeds, and shifting them to ecological agricultural projects, which would promote the creation of 25,000 farms of this type around the island.

The professor claimed that this proposal has been prepared by young people who currently maintain ecological agro-farms on the island, with such initiatives aiming to provide the island with food self-sufficiency.

Where would the money come from?

On the other hand, Alameda looked favorably on the proposal of a universal healthcare system, but believes that the problem with such measures, as well as that of educational reform, is that they do not specify where the money would come from or what the transition process to the new system would be.

However, Bernabe said the single-payer healthcare system would be paid with the money that is currently given to insurers, and that mechanisms will be put in place so that “everyone contributes according to their income.”

With regard to parity in Medicare and Medicaid funding that the PPT promotes, Rosario said that “every time Puerto Rico’s statehood isn’t supported, it carries a basic point: There’s no way Congress will grant parity of federal funds to a territory that doesn’t have the responsibilities and benefits of citizens from the states.” Thus, he also criticized the PPT’s lack of definition in terms of status, despite proposing to solve the island’s colonial situation through a constitutional assembly on status.

However, Bernabe insisted that the PPT considers the colonial relationship between Puerto Rico and the United States as “unacceptable,” but that “we don’t defend [a specific] status” because the party integrates people from different ideologies who have agreed that the status assembly, as promoted by the Puerto Rico Bar Association, is the best way to resolve the matter.”

Rosario also criticized that the PPT is promoting a transition to renewable energy sources, but without private investment, at a time in which the government has no money to carry out these changes due to a lack of access to markets.

However, he believes that the PPT’s intention to consolidate government services and agencies, as have supporters in all parties, favorably, and that it promotes reducing the allocations from the electoral fund, because “it is a sensitive response to our fiscal reality.”

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