In Cuba, the Majority of Independent Workers Aren’t Business Owners

The feminist economist Teresa Lara gives us insight about the employment panorama in Cuba and suggests measures that could improve the situation of working women.

By Itziar Abad  (Pikara magazine)

Teresa Lara: “Going back to a single currency will imply inevitable risk, but financial measures can be taken so that this risk is minimal and conserve socialism and its achievements.”

HAVANA TIMES — In Cuba, women represent almost a third of the wage-earning population, in both the state and private sector. Before 2010, over 90% of women used to work in the state sector. Later, many also moved to the private sector out of their own choice and because the government suggested the need to reduce state personnel, mainly in the services.

“That’s where Cuban working women are, just like Latin American and European women, as a result of traditional gender roles: education, care, cleaning…,” the feminist economist Teresa Lara analyzes. From 2009 to 2015, approximately 82,000 women left their jobs on the government payroll.

And they are now registered as independent laborers, but that doesn’t mean that they have their own businesses.

Teresa Lara: In Cuba, not every independent laborer is a business owner. Independent labor means that you don’t work in the state sector, not that you are self-employed, like they say in Spain when you have your own business. The majority of women aren’t business owners, but are employed instead to offer services for those who have capital, men generally-speaking. For example, if you rent out a room for tourism, the guest house might belong to the man. In the private transport sector, another service which has progressed quite well because of the public sector’s deficiencies, there are hardly any women, or female car owners or drivers.

So, women are found working in areas such as care providers and food service. A lot of the time, when they look at the list of activities that can be exercized independently and are approved by the State, they can’t find their job. Even though more than 60% of Cuban women graduate with university degrees, the list of legal approved self-employment options includes activities such as manicures, button sewer, hairdresser or babysitter, which don’t require a high level of professional training.

And are these jobs sustainable?

“Black women aren’t where the money is. 500 years of slavery mean that the black population can’t compete in equal circumstances.”

Generally-speaking, these kinds of jobs are mainly only done because of short term financial reasons. Women who have set up their own businesses and are the owners are often very successful and have sustainable results. Employed women are more unstable. Many women work in a particular job for a short while, to sort out the money they need for something, for example: to build, buy or do up a home, to complement family expenditures, necessary expenses to emigrate or to move to another region within the country.

Is the presence of black women proportional within the 30% of women who work in the private sector?

The private sector pays more than the state-owned sector but black women aren’t where the money is. Five hundred years of slavery means that the black population can’t compete in equal circumstances.” Plus, the private sector works off of the “ideal and beautiful woman” stereotype, who is white, wears a size X and has a certain face, to attract tourists.

Nevertheless, you need to analyze every region separately. In the Santiago de Cuba province, where there is a greater percentage of Black people, you will see black women working in banks or as waitresses. Anyway, you also have to bear in mind that if the representation of black people in Cuba is only 9.3%, we can’t aspire to have 50% of black people in universities, for example. Nevertheless, we need to underline the fact that 39% of working women are black and mixed race, according to the 2012 Population and Housing Census.

What is the average salary in the state and private sector?

Those who work in private cafes can earn up to 30 CUC [Convertible Cuban pesos, the equivalent of the USD) in a week, 120 CUC per month, versus the average salary (approximately 687 Cuban pesos [CUP], [30 CUC] which is earned in the state sector. That is to say: people who work independently earn in a week what people who work for the State earn in a month.

What makes State-salaries so low?

Low production of goods and services, inefficient productivity, exchange rates and two currencies circulating within the same country.

When efficient productivity levels increase, the State can use just one national currency and the exchange rate will adapt to these efficient productivity levels which justify the Cuban peso’s purchasing power and incomes will correspond to the payment for work they do. We have been living with two currencies and low levels of efficient productivity for over 20 years. That’s why real incomes have decreased. Now, going back to a single currency will imply inevitable risk, but financial measures can be taken so that this risk is minimal and conserve socialism and its achievements.

What measures?

“We have human capital that is able to take on the necessary changes if they are given the opportunity to apply their knowledge to industry, agriculture, construction.”

The National Economic Development Plan 2016-2030 contemplates very sensible changes. The pharmaceutical industry has been given priority and there is more modern technology. However, the manufacturing industry, construction, agriculture and cattle breeding are out-dated. This sovereign, independent, socialist, sustainable and prosperous development that the government wants for 2030 needs sensible, comprehensive and bold economic changes.

As we know, the economic blockade is still in force, but there is also a lack of resources and exports haven’t progressed. Cuba still depends too much on food imports. For example, we import a large part of the rice we consume. In this country, we have skilled human capital, both women and men, who are able to take on these necessary changes if they are given the opportunity to apply their knowledge to industry, agriculture, construction. But they need resources in order to do this.

Furthermore, Cuba has a Foreign Investment Law, which we have to take advantage of in these priority sectors and to make alliances with the private sector, where women also have lots of opportunities to develop, to associate themselves. Meanwhile, state-run companies need to look for investment from Cubans who live in Cuba. The Law doesn’t allow it but I think that, by 2030, this will have changed.

And in the meantime…

We are trying to find opportunities in this bleak landscape: oil prices have fallen, the blockade continues, the 2016 economy has decreased, Trump is in the White House, people still think that emigration is their only way out… We want the private sector to progress but we have many restrictions, like a lack of a wholesale market. Why doesn’t the State make things easier for private sector workers and then prices will fall as a result? If they stop buying at retail prices, they will have to lower their prices in order to compete with one another, which would have better results for the population. Karl Marx wasn’t wrong about that. The government has created a self-employment law, but it hasn’t created the infrastructure independent businesses need to develop.

This is far from happening…

Now, as the State doesn’t have a stable offer of quality goods, private business owners are buying all of the goods on the market and they keep prices high for the population. Social assistance and subsidized foods are a priority: milk for children, diets for sick people and chicken for pregnant women. The other subsidy, which is given to you for being Cuban and for living here, isn’t enough for anything. This is the famous “rations book”: sugar, rice, and very small quantities of chicken, oil. We haven’t managed to reach a level of economic development that isn’t subsistence. That’s why economic change is necessary. In order to ensure the diets of children and old people, we need more money! We have to produce more! The universality of the State budget is wonderful, but Cuba needs to be producing in order to maintain this; it can’t live off of credits forever nor keep up universal spending.

So, you aren’t for giving the rations book to everyone?

No; only to those who really need it and to minors, the elderly, the handicapped, students and those who work in the state sector. The State has to continue giving, but it needs to see who it gives to and what the repercussions of this are for society as a whole. In fact, it is working on targeting social assistance so that products reach people who really need them.

3 thoughts on “In Cuba, the Majority of Independent Workers Aren’t Business Owners

  • Well said, I am from Canada as well. Making money in small business here is not easy, but in Cuba its tough.

  • I read this twice trying to make sense of it. I am a Canadian woman who had my own business here. The Canadian government makes owning your own business difficult (lots of paper work, high taxes) but nothing like this. My Cuban friend will be in her 60’s in 2030, so any reforms won’t be of any use to her. China still has a communist government, but somehow they have managed to change to a market driven system and are supplying the world with agricultural and manufactured products. Why doesn’t Castro, look to China’s example and copy the things that work, and can be adapted to an island nation.

  • Wow, planning stuff out to 10-15 years is surely the sign of a failed economic policy, such as it is for Marxist. The discussions of 2030 apparently give hope to some including Raul who knows he’ll be worm food by then and the Havana Trump Tower should be finished.

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