Development & Aid, Economy & Trade, Headlines, Labour, Latin America & the Caribbean

LABOUR-CUBA: The Challenge of Boosting Productivity

Patricia Grogg

HAVANA, Apr 30 2008 (IPS) - Workers are facing thorny questions related to productivity, wages, participation in decision-making or unemployment at a time when the government is discreetly adopting measures aimed at finally pulling the country out of an economic crisis that has dragged on for more than 15 years.

The suffocating impact of economic problems on living conditions in this socialist nation was the focus of many of the complaints and suggestions voiced by ordinary Cubans during the widespread debates called for by the authorities last year, after a key Jul. 26 speech by President Raúl Castro.

“The problems of low productivity and low wages will be resolved as each sector implements the formula of paying in accordance with production levels,” said Ariel Terrero, a journalist and researcher who specialises in economic questions.

“The ceiling for wages should be productivity, and not the other way around,” he remarked to IPS.

According to Terrero, wages should be linked to performance, especially in leading productive and services sectors, whose development would in turn bring improvements in salaries in other areas, like health and education.

In February, the Labour Ministry approved new general regulations on wages – in resolution 9/2008 – which extended the system of performance-based pay to the entire business community in Cuba.

The new system is aimed at boosting productivity, cutting costs and expenses, curbing energy consumption, improving the quality of goods and services, replacing imports with nationally produced goods, and increasing exports and revenue flows into state coffers.

When the recession broke out in Cuba in the early 1990s, the purchasing power of Cuban families plunged. During that period, the state propped up dozens of inefficient public enterprises, continued paying the wages of thousands of inactive workers, and continued to provide free education and health care and heavily subsidised essential food items.

Experts estimate that today, 15 years after the peak of the crisis, the average wage has one-quarter of its 1989 real value, although the nominal value climbed from 188 to 408 Cuban pesos a month.

In a country where the overwhelming majority of the workforce is employed by the state, it is estimated that an average family of four needs nearly twice the current average income to cover their basic needs.

In 2005, the government granted wage and pension hikes to more than five million public employees and retirees.

A new increase announced Sunday will benefit a total of two million people, including pensioners, families receiving social assistance, and judges and prosecutors.

In an article in the Catholic magazine Espacio Laical, economist Pavel Vidal wrote that workers should receive a share of profits, which would strengthen their stake in the results achieved by the company they work for.

For his part, Terrero argues that improving wages and working conditions is not enough. On his web site, Cuba Profunda, he advocates strengthening “workers’ participation in decision-making in their companies or workplaces,” to strengthen their sense of belonging.

Labour leaders in Cuba have acknowledged that employees have become less disciplined and dedicated as a result of the growing loss of a sense of responsibility for their own performance, given that property in Cuba is state-owned, or supposedly collective.

A Labour Ministry resolution in effect since April 2007 apparently did little to change that. The new rules prohibit workers from accepting personal payments on the job outside of their wages, using vehicles or other equipment belonging to their government employer for personal ends, and engaging in personal income-earning activities within the workplace. “Serious breaches of discipline” listed by the resolution are unexcused, unjustified or repeated absenteeism or tardiness, abandonment of the workplace during the worker’s shift, and low productivity. Parallel to the challenge of improving economic efficiency, authorities in Cuba must restore the prestige of work, especially among the younger generations.

A 2007 study by the Communist Youth League (UJC) found that more than 282,000 young people in Cuba neither work nor study. The magnitude of the problem is especially alarming in Havana, where 20 percent of the working age population does not work.

The report attributes the phenomenon to the low level of education of the young people who do not work or study, the gap between their aspirations and the job opportunities available to them, and the shortcomings of the coverage and assistance they are offered by the relevant state bodies.

Many of these young people prefer to do whatever they have to do to get by instead of working, because ultimately, they do not need to work for a living, said an article in Trabajadores, the weekly publication of Cuba’s central trade union.

But in the meantime, “the country is lacking labour power in important areas like education, health, construction or agriculture,” it added.