(Bloomberg) -- Puerto Rico demonstrators battled police on San Juan’s streets as they marched against proposed cuts to retirement benefits and looser labor laws as the bankrupt island seeks to reduce $74 billion of debt.
Thousands of protesters came out to contest retirement-plan changes that a federal board overseeing the bankrupt commonwealth’s finances says would help end years of overspending as it also seeks concessions from bondholders.
Tension broke out as young protesters tried to enter the Hato Rey neighborhood, San Juan’s banking center, where helmeted police officers wearing gas masks formed lines to block them from advancing. The group called itself Se Acabaron Las Promesas, or the Promises are Finished, a play on the law called Promesa that Congress passed in 2016 to resolve Puerto Rico’s debt crisis.
Once the protesters tried to push their way through the wall of police, some officers raised their batons and tear gas billowed through the air. The demonstrators ran in confusion, screaming and coughing. The police said some threw stones and bottles of water at the officers. Two people were arrested, police said.
The Promesa law established the oversight board, which wants Governor Ricardo Rossello to begin reducing pension benefits in 2020 by an average 10 percent for some retirees as the island’s largest retirement system has run out of cash. Rossello and island lawmakers have rejected the proposed changes and workers are vowing to fight for the benefits that they’ve been promised.
“We prefer to fight against the board rather than die in our homes without money,” Andres Miranda, vice president of the Federal Association of Pensioners and Retired People, said during the march. “If Rossello gives up on defending us, we will not. We will fight for what belongs to us.”
In San Juan, where May Day protests are an annual event, the crowd covered almost the length of the 1,000-foot Dos Hermanos Bridge. Other groups marched toward the Hato Rey district, converging on the building where the federal board has its offices. The financial district known as La Milla de Oro closed thanks to protests, and no banks were open in Hato Rey.
Public employees throughout the U.S. for decades have accepted an implicit deal: low wages in exchange for comfortable and secure retirements. Politicians often doled out generous promises in lieu of raises, secure in the knowledge that the price would be paid later. In the wake of the financial crisis, many of those assumptions have been upended.
While Puerto Rico’s governor and legislature refuse to take up the board’s pension initiatives, public workers in Detroit and Central Falls, Rhode Island, have been forced to take benefit cuts as those cities emerged from bankruptcy. About 45 percent of island residents live in poverty and its 10.3 percent unemployment is more than double the U.S. average.
The federal board is overseeing Puerto Rico’s bankruptcy. The panel, creditors and bond insurers are negotiating how to reduce the island’s debt.
The panel last week offered legislation that would eliminate mandatory Christmas bonuses, reduce required vacation and sick time and enable businesses to fire employees without having to first prove a just cause. Rossello and the island’s legislature have dismissed those changes.
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