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Melissa Harris-Perry: This is The Takeaway, I'm Melissa Harris-Perry. Last week, the governor of Puerto Rico announced that all public school teachers will receive a temporary salary increase of up to $1,000 per month. Now, this temporary wage increase is a result of weeks of direct action, as thousands of public employees in Puerto Rico have used public demonstration and work-stoppages to demand better pay and working conditions. To learn more about it, we talk with a representative from the Teachers Union in Puerto Rico.

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Victor Bonilla Sanchez: [Spanish language]

Melissa Harris-Perry: Victor Bonilla Sanchez leads the Puerto Rican Teachers Association. He's spent 30 years as a high school Spanish Language teacher. He says that he felt many of the frustrations that teachers are currently expressing, all due to insufficient funding for the Puerto Rican school system.

Victor Bonilla Sanchez: [Spanish language]

Melissa Harris-Perry: As Victor told us here, teachers in Puerto Rico have repeatedly experienced the problem of being promised more federal resources, but then discovering those resources never appear.

Victor Bonilla Sanchez: [Spanish language]

Melissa Harris-Perry: Indeed, 13 years without a pay increase is challenging for any professional. As Victor says, it's particularly troubling when we consider that teachers in Puerto Rico have had to manage the challenges of hurricanes Irma and Maria, the 2020 earthquakes, and the pandemic. This is why Victor Bonilla Sanchez says the Teachers Association of Puerto Rico and its local union are tired of hearing only words rather than seeing action, which acknowledge the important contribution of teachers to society.

Victor Bonilla Sanchez: [Spanish language]

Melissa Harris-Perry: "After all," Victor told us, "teachers are educating the souls of the nation."

Victor Bonilla Sanchez: [Spanish language]

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Melissa Harris-Perry: For more on this I'm joined now by Dánica Coto, correspondent for the AP covering the Caribbean. Welcome back to The Takeaway, Dánica.

Dánica Coto: Thank you for having me.

Melissa Harris-Perry: Let's start with the teachers. What are their concerns?

Dánica Coto: Well, there are multiple concerns. Like you mentioned, the base salary hasn't increased in 13 years, but that's coupled with an increase in higher utility bills, more expensive grocery bills. A lot of people are still trying to recuperate from the hurricanes, from a string of strong earthquakes, the economic crisis, and the pandemic.

One of the growing concerns, despite the announcement of the increase, is where's the money going to come from after those federal funds run out in 2024? The governor also has promised increase for firefighters, but those federal funds also are going to run out in 2026. You have a lot of hesitancy, a lot of fear that, in a couple of years, these increases are just going to disappear. The ongoing protests are part to ensure that these local funds are going to appear in some way.

Legislators are drafting a bill that would make the salary increases permanent, but they don't identify yet where the money will come from. Teachers and firefighters as well, are also facing dwindling pensions. They've raised the retirement age and they've cut benefits. That's going to be another hit for those public employees.

Melissa Harris-Perry: In some ways, this is not that different than some of what's happening in the mainland. Certainly, a teacher shortage has driven the ability of everyone from substitutes to school nurses to ask for better pay and working conditions. I'm wondering if there's something about Puerto Rico that has created a particular urgency for teachers?

Dánica Coto: Indeed. It's been a long time since they've seen a salary increase. A lot of them are working two to three jobs. There was a recent fatal accident in which a teacher died. He had been working overnight as a security guard. That also propelled or led to these protests. It's saying people are actually dying because they're trying to make enough money to just be able to have a basic life, and they're not even able to do that.

In part, the ongoing protests also are fueled by comments from the governor. He recently said that no one is obligated to be a firefighter, a police officer, or a teacher, and that, we can imagine, did not go very well with many of the public employees.

Melissa Harris-Perry: Oh, yes. [chuckles] That is not necessarily the way to win friends and influence people. Talk to me about-- Teachers were leading, but you mentioned firefighters a couple of times here. Are there other public workers who are joining and, again, part of the nature of their concerns?

Dánica Coto: Indeed. Throughout the years, these public employees have been fighting behind doors, meeting with the government, trying to seek pay raises, but the teachers did embolden other public employees. They were encouraged by the recent announcements of increases for firefighters and teachers. They've joined the movement. There's another island-wide strike scheduled for Friday, and they're saying, "If you were able to do it for the teachers and the firefighters, why not us?"

Among them, our forensic science workers, health professionals, including paramedics, and all hospital staff. Paramedics, for example, haven't had a salary increase in 12 years, while firefighters haven't had one in more than two decades. There's just a lot of pressure to have salaries catch up with the current economy, which is mired in a crisis and certainly not helped by the debt crisis as well, as Puerto Rico tries to emerge from a bankruptcy process.

Melissa Harris-Perry: Of course, just one more beat on paramedics and firefighters, because it seems critical to place that in the context of the hurricanes of the 2020 earthquakes, and of course, of COVID.

Dánica Coto: Indeed. I spoke to one of the union leaders for firefighters, and he said, "Most of the time, more than 80% of fire stations, we only have one person there." There's just not enough people to go around. He blames that in part, due to the salaries. You have firefighters making a base salary of roughly $1,750 a month. More than 100 people who graduated from the academy in December, 40 of them have already left.

They say, "We need to be able to offer people salary where they can live just a basic life because many of them are working other jobs, some of them, as you know, have run to the US mainland, but others have family here, aging parents that they need to take care of. In part, they feel like they have to stay here to care for their family.

Melissa Harris-Peery: Tell me, who is the Oversight Board?

Dánica Coto: The Oversight Board was created in 2016 by US Congress, and this was part of a law to help Puerto Rico emerge from bankruptcy because in 2015, Puerto Rico's former governor had declared that the more than $70 billion public debt load was unpayable. Then in 2017, the island filed for the biggest municipal bankruptcy in history. In these recent years, there's just been going back and forth, trying to negotiate with creditors, trying to reach an agreement to pull the island out of this bankruptcy process. They finally had a federal judge issue a plan that will do exactly that.

The debt payments will be less than before, not as much tax money will be going to creditors, but again, this is still a hard hit for the island. One of the concerns from some economists is that the governor, when he swiftly announced the salary increase for teachers and firefighters, they say that that kind of improvisation is exactly what helped unleash the debt crisis.

They know that it's unlikely. Even if state funds were to be found for these increases, that it's unlikely the board will approve them because it has previously denied them, and the board, again, has the final word on that.

Melissa Harris-Perry: Dánica Coto is a correspondent for the AP, covering the Caribbean. Dánica, thank you for joining The Takeaway.

Dánica Coto: Thank you very much for having me.

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Melissa Harris-Perry: We're going to continue our conversation about the protests in Puerto Rico by asking how did we get here? With me now is Fernando Tormos-Aponte, Assistant Professor of Public Policy and Political Science at the University of Maryland Baltimore County. Welcome to The Takeaway, Fernando.

Fernando Tormos-Aponte: Thank you for having me.

Melissa Harris-Perry: Let's begin with the economic crisis in Puerto Rico. Talk to me about its origins.

Fernando Tormos-Aponte: This has been a long time coming. Puerto Rico has failed to develop an economic model of economic growth for as long it's been a colony of the United States. It was never sustainable to give foreign companies tax centers to manufacture in Puerto Rico because a lot of that financial capital was never reinvested in Puerto Rico. Once tax incentives were removed under the Clinton administration, Puerto Rico lost a lot of manufacturing, the presence of a lot of manufacturing companies mostly through income tax revenue not necessarily through taxation on the financial capital of the companies themselves.

That really shrunk its revenue base, all the while having big commitments to social policies like healthcare, education, all of which are now under attack because of these new policies that are meant to address this economic crisis. Very, very little tax revenue and a lot of expenditures on social policies like education and healthcare.

Melissa Harris-Perry: Now I feel we're going to have to take one step back further than where we started here. Talk to me, when you say these tax incentives to do manufacturing in Puerto Rico-- I think that I understand what you're saying is that the loss of revenue was less about the companies moving out and more about the fact that as they moved out then people weren't making income and those individuals weren't paying into the taxes because they didn't have income. It wasn't that the companies themselves had previously been paying a sufficient revenue into the island.

Fernando Tormos-Aponte: That's exactly right. No, they weren't really contributing that much other than employing folks, in many cases, in good-paying jobs. It was the tax revenue from those income taxes, the local tax revenues, that were really propelling the economy and artificially injecting money into the economy. I say "artificially" because these tax incentives as soon as they were removed it was revealed that Puerto Rico didn't really have a sustainable model for economic growth, that did not depend on something like these major tax incentives. Once they were removed, manufacturing companies were able to find more profitable places to manufacture their medicines.

Melissa Harris-Perry: Hold for me just one moment. We're going to take a very quick break, and when we come back I want to understand more about the pharmaceutical angle.

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Melissa-Harris-Perry: We've been talking about some of the conditions that led to the recent protests by public employees in Puerto Rico with Assistant Professor of Public Policy at the University of Maryland Baltimore County, Fernando Tormos-Aponte. All right Fernando. You were just saying to manufacture their medicines, were these primarily pharmaceutical companies?

Fernando Tormos-Aponte: That's correct. There were other industries in Puerto Rico like the textile manufacturing industry and other industries that were set up to service the pharmaceutical manufacturing industry, many of which took a big big loss when these started to move into other countries and other settings.

Melissa Harris-Perry: When you say there were tax incentives and then they were removed, who is both, or what sort of government entity, what decision-makers were both making the decision to implement the initial incentives and to remove the incentives.

Fernando Tormos-Aponte: The US federal government had developed, as part of this US tax code, a Section 936. It was known as Section 936. This provided these tax incentives to develop manufacturing industries in the pharmaceutical industry, particularly in Puerto Rico. There were some advocacy amongst Puerto Ricans as well as others in the United States, continental United States, asking to remove these tax incentives.

Some, for instance in Puerto Rico, who supported statehood argued that Puerto Rico would never be admitted as a state if it was considered this exceptional case where manufacturing companies were going to set up and skew their tax responsibilities. There were some advocacy amongst those who were saying this is not the route to statehood. It ended up being actually a huge attack on the Puerto Rican economy, but again, this was always destined to fail because it was an artificial way of propping up this economy.

Some have argued that this was in part a result of the cold war because the United States wanted to show that Puerto Rico was a beacon of hope for capitalist economic development in the Caribbean, and compare that to the struggles of socialist and communist countries in Latin America, particularly Cuba.

Melissa Harris-Perry: Of course, Cuba is not an imperialized space. It's not a colony. It exists as its own independent nation. What I hear you saying is that this is in part related to this long colonial and semi-colonial relationship between mainland US and Puerto Rico.

Fernando Tormos-Aponte: That's correct. What has been prompting some of these protests has been the fact that Puerto Ricans are currently facing a massive amount of debt. A lot of which was issued under dubious circumstances by the local government in order to continue spending in ways that were essentially known as clientelistic. Ways in which they spent that made sure that they would get reelected by providing things like universal healthcare in Puerto Rico, among other kinds of what is known as pork-barrel spending. A lot of spending that helps their constituents and makes sure that they go back and vote for them when the elections come around.

Well, the problem was that people weren't necessarily involved in a lot of these efforts to issue all these bonds and generate this huge debt. Once this debt amounted to more than $70 billion, which for a small archipelago like Puerto Rico is a lot of money to owe. Then, finally, two administrations ago Alejandro García Padilla governor at the time said, "This debt is unpayable."

Well, by virtue of being a colony of the United States, Puerto Rico does not have access to the bankruptcies that a place like Detroit or other places in the United States have been able to access. What happened? There had to be federal legislation passed in order to give Puerto Rico a route to bankruptcy.

The problem is Puerto Ricans were not a part of these decision-making processes of restructuring Puerto Rico's debt. They were instead told, "You have to pay for the mistakes of these previous administrations, and you will have to take on the burden of paying back all these folks who invested your debt." Part of the problem with that debt is that again it was issued under dubious circumstances. Puerto Rico was never legally allowed under its own constitution to issue that much debt but the local government, nor the federal government, had been willing to audit the debt and prosecute those who were responsible for issuing that kind of debt.

Melissa Harris-Perry: There's already been significant population decline in Puerto Rico after, as you talked about, this economic crisis and the manufacturing base falling out. Then of course these recent disasters of Hurricane Maria, of the earthquake, of all of the ways in which we are seeing these very significant challenges. Given the population decline, is there a way to climb out of this?

Fernando Tormos-Aponte: That's a big question because one of the things that people are really frustrated about is that they're given all of these different new policies that essentially take away their schools. They take away their hospitals, they take away all of their essentially social spending, the things that makes a country run but they are not giving any hope for any kind of economic model that is an alternative to what we've had over the history of Puerto Rico.

Folks are really frustrated right now because they haven't seen any actual proposals on behalf of the United States or from local administrations that signal any kind of actual coherent philosophy for bringing the country out of crisis.

Melissa Harris-Perry: Under these circumstances, does Puerto Rico fare better by becoming a state, by becoming independent, or continuing to stay in this colonial imperial model with the US?

Fernando Tormos-Aponte: Well that's a huge debate and it's actually really divisive among Puerto Ricans which is part of how we got here. Because a lot of the parties that compete to get elected in Puerto Rico are organized around status options to change Puerto Rico's political status and relationship with the United States, they tend to neglect other issues other than status things like economic development, things like education, things like healthcare policy. When these issues get ignored and status is at the forefront of these parties' minds, you really don't spend much time developing a platform for economic development.

Melissa Harris-Perry: Fernando Tormos-Aponte is Assistant Professor of Public Policy and Political Science at the University of Maryland Baltimore County. Thanks for joining us today.

Fernando Tormos-Aponte: It's been my pleasure.

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