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SAN JUAN, Puerto Rico – Puerto Rico fired nearly 8,000 government workers Friday, the start of a wave of layoffs aimed at closing a budget deficit as the island struggles through its third year of recession.
The first round included mostly temporary clerical workers in the education, treasury and health departments. Gov. Luis Fortuno has said he needs to cut 30,000 public sector jobs on an island where more than one-fifth of the people work for the local government.
The layoffs come as Puerto Rico faces an unemployment rate of nearly 15 percent, higher than anywhere on the U.S. mainland. Many fear the new job losses will ripple through the economy in the form of unpaid mortgages and failing businesses.
"The effects will be fatal," said Francisco Catala, an economics professor at the University of Puerto Rico. "We are going about this the wrong way."
The layoffs were immediate for 4,000 workers, while the remaining will be dismissed by early July, according to Carlos Garcia, president of the island's Government Development Bank for Puerto Rico.
Many are refusing to speak or be identified because they hope the government might employ them again in the near future, said Lydia Rosado, who has worked 11 years in the Treasury Department.
"There is a lot of tension, a lot of uncertainty and a lot of fear," she said.
Those affected will receive health insurance coverage for up to six months. They also can choose to receive $5,000 to go back to school or start a new business, or $2,500 for relocation costs, among other offers.
Fortuno announced the cuts in March, saying they would save about $2 billion a year and will affect about 14 percent of the public work force. Police officers and teachers are exempt.
"The problem is that we cannot afford to pay these people," he said. "This is a difficult process, but the alternative was to increase sales tax, income taxes and other measures that would have affected even more people."
About 2,500 government workers already have agreed to voluntary buyouts, which translates into $51.2 million in savings, according to the government.
Fortuno declared a fiscal emergency shortly after taking office in January.
He said the cuts are needed despite the government's injection of $500 million into the economy earlier this year. Fortuno also has promised to reduce his $70,000 annual salary by 10 percent and that of his Cabinet officials by 5 percent over the next two years.
The first round included mostly temporary clerical workers in the education, treasury and health departments. Gov. Luis Fortuno has said he needs to cut 30,000 public sector jobs on an island where more than one-fifth of the people work for the local government.
The layoffs come as Puerto Rico faces an unemployment rate of nearly 15 percent, higher than anywhere on the U.S. mainland. Many fear the new job losses will ripple through the economy in the form of unpaid mortgages and failing businesses.
"The effects will be fatal," said Francisco Catala, an economics professor at the University of Puerto Rico. "We are going about this the wrong way."
The layoffs were immediate for 4,000 workers, while the remaining will be dismissed by early July, according to Carlos Garcia, president of the island's Government Development Bank for Puerto Rico.
Many are refusing to speak or be identified because they hope the government might employ them again in the near future, said Lydia Rosado, who has worked 11 years in the Treasury Department.
"There is a lot of tension, a lot of uncertainty and a lot of fear," she said.
Those affected will receive health insurance coverage for up to six months. They also can choose to receive $5,000 to go back to school or start a new business, or $2,500 for relocation costs, among other offers.
Fortuno announced the cuts in March, saying they would save about $2 billion a year and will affect about 14 percent of the public work force. Police officers and teachers are exempt.
"The problem is that we cannot afford to pay these people," he said. "This is a difficult process, but the alternative was to increase sales tax, income taxes and other measures that would have affected even more people."
About 2,500 government workers already have agreed to voluntary buyouts, which translates into $51.2 million in savings, according to the government.
Fortuno declared a fiscal emergency shortly after taking office in January.
He said the cuts are needed despite the government's injection of $500 million into the economy earlier this year. Fortuno also has promised to reduce his $70,000 annual salary by 10 percent and that of his Cabinet officials by 5 percent over the next two years.
