LABOUR-CUBA: Reviving the Utopia of Full Employment

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Mar 5 2001 (IPS) - The Cuban government has once again adopted the goal of guaranteeing “work for all” and increasing wages, while taking care not to trigger financial imbalances or under- employment.

The government must “guarantee full employment for the workforce, because subsidising the unemployed is not the solution,” Vice-President Carlos Lage said last month.

The dream of full employment was put on hold in the early 1990s, when authorities were forced to adopt a series of mild free- market reforms to tackle the 34.8 percent plunge in Gross Domestic Product (GDP) that occurred from 1990 to 1993.

Unemployment, which affected 8.5 percent of the economically active population in 1995, dropped to 5.5 percent by late last year – an improvement that authorities attributed to the gradual recovery of the economy.

The socialist government of Fidel Castro has announced its decision to once again take up the old utopia of full employment, but without renouncing a set of conditions that experts say will guarantee the consolidation of the country’s recovery.

For example, economists say the money supply must not be allowed to expand indefinitely, and that people employed in productive sectors must receive higher salaries, in accordance with the work they do.

However, the problem is more than one of creating jobs. The five million Cubans of working age, of a total population of 11.1 million, can be picky when it comes to accepting employment.

In late 1999, 46,000 people in Havana were looking for work, while 45,000 jobs were actually available. Official data indicates that this paradox is repeated every year, because many unemployed people refuse to work in agriculture or construction.

“I prefer to be in the street, making a living with whatever I can invent, than laying bricks,” said Rodrigo Valdés, 34, who left his job with a construction company a few months ago.

Vice-President Lage said that after a decade of severe economic crisis – which hit Cuba in the wake of the collapse of the Soviet Union and the east European socialist bloc – the challenges facing the country today are boosting production and efficiency, achieving financial equilibrium, diminishing the current accounts deficit and improving the living standards of the population.

Statistics from the Ministry of Labour and Social Security indicate that last year, the state generated 140,852 new jobs, while there were more than 4.4 million active workers.

Juan Triana, a researcher at the governmental Centre of Studies on the Cuban Economy, estimated that last September, some 17,000 people were still “available” – a euphemism used in Cuba to describe people left unemployed by the closing of factories or other adjustment measures.

Forty-four percent of the new jobs were taken by women, who constitute 43.3 percent of the public labour force in Cuba, according to the Ministry of Labour and Social Security.

In the past two years, more than one million workers have received wage raises as part of a policy that began to be applied in the health and education sectors, and which will leave the employees of the state’s central administrative bodies to the last.

More than one million people also received “wage incentives” in dollars for good performance, while 1.2 million workers were incorporated into a productivity-linked wage system.

As a result of the wage rises, the average monthly salary rose to 249 Cuban pesos in mid-2000, 12 percent up from the previous year, while average monthly income climbed to 359 pesos. (The peso stands at 22 to the dollar in the government exchange bureaux).

The wage incentives are aimed at giving the local currency a boost. However, salaries still fall short for those people who depend exclusively on their wages, and who receive, for example, no family remittances to help them afford the basic products like cooking oil that are sold only in dollars.

Authorities guarantee a packet of basic items and services at subsidised prices. However, an important part of the basic basket of essential goods and services must be acquired in the government’s chain of stores that sell only in dollars.

In addition, food prices in Cuban pesos remain high. A kilo of pork sells at more than 40 pesos, a pineapple at 15 pesos, and a bunch of six onions goes for around eight pesos.

Lage, referring to the wage increases applied in the past two years, warned in February of the need to closely monitor the situation to prevent financial imbalances.

In 1994, authorities were forced to apply financial measures designed to tighten the money supply, which amounted to 11.9 billion pesos, equivalent to 15 months of average salary.

Experts warn that a return to the policy of full employment might not only expand the money supply, but may also drive up under-employment, as has occurred in the past.

In 1996, official sources acknowledged that some 600,000 to 800,000 of the 4.6 million Cubans working in the civil sector of the state (in other words, not the military), cooperatives and the private sector earned full-time salaries for doing part-time work.

Economist Angela Ferriol, an expert at the National Institute of Economic Research, said that in the mid-1990s, perhaps one million people in this country of 11.1 million people were under- employed.

Meanwhile, although authorities have not yet specifically referred to the future of private initiative, some say the return to a policy of full employment will mean the end to any possibility of being legally self-employed.

In the 1990s, the government announced an expansion of the list of areas in which private initiative was permitted to more than 100 occupations or trades, authorised the opening of small family restaurants (“paladares”) and began to permit people to rent out their houses and let rooms.

At that time, self-employment was conceived of as a partial solution to the closing of a large number of factories due to the lack of raw materials and inputs, and to the possibility of more than half a million people being left unemployed as a result of the labour reforms that were going into effect.

Luis Puebla, a waiter in a private restaurant, told IPS that “the government has never liked this kind of work. It authorised it because it had no other choice, but at the slightest chance, they’ll close us all down.”

Madga González, a 27-year-old economist, argued in the meantime that “there is a sector of the population, like pensioners, who will always need to exercise certain occupations to boost their incomes, and other sectors that need those services.”