Progreso Económico: Gov’t payroll shrinks by 55K posts

Written by  //  December 13, 2013  //  Economy  //  No comments

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“Progreso Económico" is a publication prepared by the Puerto Rico Institute of Statistics for Banco Popular, the island’s largest bank.

“Progreso Económico” is a publication prepared by the Puerto Rico Institute of Statistics for Banco Popular, the island’s largest bank.

Puerto Rico’s declining population, rapidly aging workforce, significant fiscal pressures and subsequent policy measures have combined to prompt a reduction in the government’s workforce over the past five years by as many as 55,000 jobs, or almost 20 percent of the public sector’s workforce.

Such is the conclusion contained in the latest edition of “Progreso Económico,” a publication prepared by the Puerto Rico Institute of Statistics for Banco Popular, the island’s largest bank.

The Fiscal Reform Act of 2006 called for the establishment of a dataset to maintain a constant watch over the number of filled government posts. The result is a dataset maintained by the Puerto Rico Office of the Comptroller, the study states.

Every month, some 250 public entities, covering a wide array of agencies, public corporations, and municipal governments, among others, are required to certify the number of filled government posts to the agency.

“The data suggests that about three quarters of the reduction has occurred in civil‐service government positions, consistent with the hypothesis that an aging government workforce is retiring,” says the publication prepared as a service to the business community and the public at large.

In 2009, Law 7 — the mandate passed under the Gov. Luis Fortuño administration in an attempt to reduce the size of the island’s burgeoning government — included an initial period (Phase I), during which public employees were offered incentives if they resigned voluntarily, followed by layoffs (Phase II/III).

Another mandate, Law 70 offered government employees an early retirement window, with a late 2010 deadline, after which many of the retirements were processed. Finally, this year, Law 3 reformed the Puerto Rico Government’s Retirement System, prompting some to seek early retirement in 2013.

“While these initiatives have certainly played a role, the aging public sector workforce and the fiscal pressures have also been key drivers of these changes. For better or for worse, the government of Puerto Rico is not as big as it used to be,” the report concludes.

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