Teachers in Puerto Rico have won a significant victory in their fight to defend their pensions. A court action taken by the teachers union against plans to 'reform' the pension system has been successful, with the judge ruling that the plans are unlawful. Teachers had mounted strikes and demonstrations to co-incide with the court case.
Teachers say that the contested Law 160 has already led to a further teacher shortage in the country, as teachers left the profession before the changes could come into effect, fearing the poverty which would ensue. Union leaders say the plans are part of a bigger project to downgrade public education and turn it over to the privatisers.
The impetus for passing the law had come from the US credit rating agencies and investors, who have insisted that the government cut the $70 billion public debt by attacking teachers' pensions. The agencies had degraded the country's debt to junk status. As is the case all over the world, the first people who are attacked by governments looking to placate such agencies are the poor and the public servants and services, on which they rely. For teachers, their pensions are their only source of income once they retire, since there is no social security system in the country, and the changes would have led to their impoverishment.
As we reported in January, when the teachers took strike action, Puerto Rico is used as a low tax economy by corporations seeking to avoid income tax. One such avoider is arch education reformer and anti-poverty guru, Bill Gates. According to a recent article in the UK Guardian newspaper: 'The (Microsoft) company was used as a case study in a Senate investigation into US tax avoidance, which found one example of offshoring profits through a tiny Puerto Rico office alone saved it $4m a day in taxes.'
So while teachers struggle to save the public education service in Puerto Rico, Gates and his corporate colleagues use the crisis hit country to launder their tax liabilities. However this is a significant triumph in the fight back of public services against the privatisers in Puerto Rico.