CUBA: Low Wages Make ‘Extra Income’ Necessary

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Feb 28 2003 (IPS) - The high cost of life is one of the biggest worries of families in Cuba, where salaries fall increasingly short of covering minimum dietary and clothing needs.

”Everything is so expensive, the money just doesn’t stretch far enough” is the most common complaint heard in this socialist island nation today, especially among those who have to subsist on their wages, without extra income from relatives abroad or from a second – often unauthorised – economic activity.

Archbishop of Havana Cardinal Jaime Ortega addressed the issue this week in a pastoral letter released on the 150th anniversary of the death of priest Félix Varela, one of the leading thinkers of Cuba’s 19th century independence movement.

”Although school and health care are free, salaries are not generally in line with the cost of life,” said the head of the Catholic Church in Cuba.

Ortega said the low incomes make it difficult for families to get by, and that the faithful turn to the Church to express their anxiety.

Official reports estimate the average salary in Cuba at 262 pesos a month. Since the peso stands at 26 to the dollar in the government exchange bureaux, that means the average monthly salary is equivalent to 10 dollars.

Government sources also reported that more than 1.1 million workers received wage hikes in late 2002, while 1.4 million are covered by programmes designed to motivate performance by the partial payment of wages in hard currency.

María Josefina Bello, assistant principal of a primary school, saw her salary rise to 450 pesos. But she has no other income, besides the child support from her ex-husband.

”There are probably countries in a worse situation, but when I was studying, in the 1980s, salaries like mine amounted to a lot of money, and we ate well in the cafeteria,” she recalled.

Bello was talking about the period prior to the economic crisis that broke out in Cuba after the collapse of the east European socialist bloc and the Soviet Union in the early 1990s.

Back then, the Cuban state guaranteed a basket of essential food items and clothing at subsidised prices through a ration-book that covered the basic needs of families.

The regulated distribution of basic food items continues today, but it only covers a portion of a family’s dietary needs, and no longer includes clothing and footwear.

”I spend around 100 pesos a month on utilities: water, electricity, gas and telephone,” she said. ”What really eats up my salary is the ‘shopping’ (the stores that only accept dollars) and the farmers’ market, where a head of garlic can cost as much as five pesos and a pound of pork 25 pesos or more.”

The recession led to a 34.8 percent contraction of Cuba’s Gross Domestic Product (GDP) between 1990 and 1993, and forced the government of Fidel Castro to legalise the possession and free circulation of dollars, open the country up to tourism and foreign investment, and create free farmers’ markets where prices are determined by the law of supply and demand.

In addition, the list of occupations in which people can apply for licences to be self-employed and run their own businesses was expanded, which allowed Cubans to open small family-run restaurants and cafes and let rooms in their homes to tourists.

But strict regulations and taxes have curtailed the expansion of private enterprise, which employed only 3.8 percent of the country’s 3.9 million economically active people in 2001.

However, economists and independent sources say the estimate of the number of people who engage in private enterprise in Cuba would be much greater if those who do so without a license and without paying taxes were counted.

Archbishop Ortega said professionals, employees and labourers alike who receive no cash remittances from family members or friends living abroad ”are forced to carry out some type of legal or illegal labour activity simultaneous to their jobs.”

Given the ”anxiety and fears” suffered by those who work in unauthorised activities and caused by the high taxes, Ortega asked ”those who should respond” whether it would be possible to ease the tax burden in order to make ”what is illegal, legal.”

He said a reduction of the taxes that the state levies on the self-employed would help ”avoid corruption” and legalise activities that are now carried out on the black market.

Ortega’s remarks coincided with a major government offensive against ”an incipient market for drugs” and unauthorised economic activities like the letting of rooms to foreigners by people who do not have a licence or pay taxes.

Witnesses say the police have dismantled hundreds of clandestine factories producing a number of products since it began to clamp down on illegal activities in January.