First Published: The Call, Vol. 4, No. 3, December 1975.
Transcription, Editing and Markup: Paul Saba
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The present economic crisis has devastated the Puerto Rican economy and added fire to the political struggle sweeping across the island.
Unemployment, a constant plague in Puerto Rico, today runs between 40 and 50%and is still climbing. More than 70%of the people have been forced onto food stamps, while 60% struggle to subsist on sub-poverty incomes. In addition, everything costs more in Puerto Rico. During “normal” times, prices in San Juan skip 25% ahead of U.S. mainland prices. A dozen eggs during crisis times, however, averages 100 to 125% higher on the island.
In some areas conditions are even more horrifying. The town of Jayuya reflects the worst face of the crisis. Jayuya – where thousands ross up against U.S. colonial rule in 1950, where hundreds were massacred and 2,000 jailed in the fight for independence – today has an official rate of unemployment of 96%. It’s an extreme but not an isolated case. Many towns across the island have grown dependent on one or two large foreign companies, so that a bankruptcy or closure of just one company can destroy a city. Last year Phillips Petroleum turned Guayama into a wasteland when it shut its doors, laying off 2,300 workers and idling indirectly another 6,900. The total population is only 36,000.
With the crisis threatening to eat away at profits, many companies have shifted their operations out of Puerto Rico in the past two years and moved to Taiwan and South Korea. The garment industry in particular, which used to employ 25%of all Puerto Rican workers in manufacturing, has virtually deserted the island.
No one in Puerto Rico today talks about the glowing prospects of a “recovery.” Every key industry and sector of the economy has been on the decline. In construction alone, almost one quarter of the work force has been axed–affecting 14,000 workers.
The tourist industry has lost its glitter. Two major luxury hotels recently closed down and three more threaten to follow.
In manufacturing–where the government poured in support under the Fomento program–bankruptcies increased by 25% last year. From June, 1974 to February, 1975, 53 Fomento-backed industries closed down, leaving over 1.0% of all workers in this sector unemployed.
A huge petrochemical plant built between 1966 and 1972, costing $1.6 billion, postponed its opening date because of the crisis and high cost of oil. What few plants have been enticed into setting up shop in Puerto Rico have been largely chemical and petrochemical: highly mechanized so that they employ only a handful of workers, are highly pollutant to the environment and deadly to the workers.
What has been the government’s solution? Colonial Governor Rafael Hernandez Colon has prostrated himself before the U.S. imperialists and offered up the island’s natural wealth, resources, and people in exchange for a short-term lease on life for his colonial puppet regime.
In some ways he has been a “model” for New York City. He has called for massive layoffs and salary cutbacks, dropped minimum wages, postponed indefinitely all wage adjustments for public employees, and fired 16,000 public school teachers. To try to block the huge protests and strike wave. Colon produced a new personnel law with a new “merit” system that dumps seniority down the drain and is nothing but a direct campaign of union busting. To raise some cold cash to fill the empty tills, Colon pushed through a special surtax on personal income that hits people earning as little as $1,000 a year.
Desperate to attract U.S. companies back to Puerto Rico, Colon has tripled government budget funds for industrial promotion materials and is handing out handsome bribes to any company that will put a plant on the island.
“Profit Island-USA” is the name of a new brochure put out by the colonial government and advertised recently in a full page of the New York Times. According to the ad, the Puerto Rican government will provide free training programs for workers and will pay 25% of all salaries if a company employs 500 workers or more. “100 % exemption,” the ad proclaims, “from all taxes, federal and local.”
In addition, the colonial government bailed out some firms by buying them, and then tried to cover these costly moves by calling them “nationalizations.” First it bought out the service sector of ITT, described by one official as “helping ITT drop a hot potato.” It had a $95 million deficit.
More recently the colonial government bought out three shipping firms which had racked up a SI0million loss in three years.
When questioned about the state of the Puerto Rican economy, Governor Hernandez Colon interjected, “What has happened is that the vulnerability of our system has been exposed.”
Puerto Rico’s pro-imperialist rulers try to depict the island as “vulnerable” in or der to put forward their treacherous sell-out solutions. Colon and his cronies insist that Puerto Rico is too small an island to be independent and that it must tighten its relationship to the U.S. if it is to survive this crisis.
Puerto Rico’s dependency is a fact. Almost all the food and textiles consumed on the island have to be imported. Most of the manufacturing is based on processing imported materials which are then exported. Eighty five percent of its imports come from the U.S.
What the imperialists and their supporters hide, however, is that this dependency and the harshness of the present crisis are direct consequences of U.S. colonial domination and its much-acclaimed Operation Bootstrap. Before Operation Bootstrap, most of the food consumed on the island was grown there. Agriculture employed 214,000 workers in 1950. Today fewer than 53,000 do agricultural labor. In 1950, unemployment was 12%; today it is 50%.
Bootstrap was just another name to increase U.S. corporate profits. It was a plan to help U.S. post-war economic expansion, by offering cheap labor and no taxation for U.S. companies.
As a result of Bootstrap, thousands of Puerto Ricans were forced off agricultural lands and agriculture was stifled. As the unemployed went to towns and cities in search of jobs, the colonial government set up special migration programs to encourage people to go to the U.S. About three million Puerto Ricans live in the U.S. today. For those who remained, massive sterilization programs were initiated as a further measure “to reduce unemployment.”
Under these brutal conditions, thousands of Puerto Ricans have swelled the ranks of the workers movement and the independence struggle. No amount of colonial propaganda about Puerto Rico’s “cheap and loyal labor force” can cover the realities. Tens and thousands of workers have gone out on strike against Hernandez Colon’s iron-fisted measures. His new “personnel law” was met with an island-wide one-day general strike of all public employees. Attempts to reorganize the maritime industry to suit the imperialists sparked an extended strike of dock workers that paralyzed the island. The cement workers have been out for over nine months.
The U.S. and its colonial government have stepped up their repression because they fear this popular upsurge. U.S. imperialism also fears that the other superpower, the USSR, will take advantage of the situation and gain the upper hand in Puerto Rico.
In recent months, the Soviet Union has openly moved to challenge U.S. domination over Puerto Rico. The September, 1975, conference in Havana in “solidarity” with the Puerto Rican independence movement, was an outright imperialist maneuver by the USSR to manipulate and control the opposition to U.S. imperialism and the independence movement. The USSR lauds “detente” and calls on the Puerto Rican people not to fight imperialism but to rely on the Soviet Union for help. But its “help” has proven to be treachery. Its so-called “international division of labor” and friendly “aid,” for example, are nothing more than “Operation Bootstrap” in a new disguise, a “socialist” disguise.
No superpower will “help” Puerto Rico out of the present crisis. As the conditions become more grave and rivalry intensifies, more and more people are opposing imperialist domination. Hernandez Colon’s “solutions” and the USSR’s “offers” will be swept aside by the powerful forces for the genuine independence of Puerto Rico.