Diaz Canel’s Wage Increase for Cuba’s Public Sector

By Osmel Ramirez Alvarez

Cuban president Miguel Diaz Canel (l) with his minister of the Economy and Planning, Alejandro Gil Fernandez. Photo: Dario Gabriel Sanchez Garcia/Cubadebate.

HAVANA TIMES – The news was well-received and came to everyone’s surprise. Pay hikes in the public sector came when people were least expecting it, and that’s because it’s the sector that mostly doesn’t produce anything. Honestly though, they had a horrible payment scheme up until yesterday, which was borderline mockery and slavery.

For example, my sister, a university graduate and Ministry of Labor and Social Security representative at a People’s Power Council, was only earning 385 Cuban pesos, just about 15 or 16 USD per month. That was what every People’s Power official earned up until today, as well as housing offices, the justice system and others, who have dedicated themselves to making life difficult for Cubans for decades, instead of helping.

In reality, they haven’t lived off their meager salaries, but off of influence peddling, State resources available to them and corruption. At least those who can, and except for some rare exceptions. Those who don’t, steal working hours instead to dedicate this time to other more profitable ventures, or just in silent protest. There’s a reason why any kind of redtape, even if it is simple, takes years of waiting or grand “gifts”.

Now, out of nowhere, when the country has less economic resources and liquid funds; when we are entering a recession that is similar to the peak of the Special Period (which never really ended), or a new Special Period for those who believe it’s another one; without productivity at work increasing, it has been decided that wages will go up double or triple, just like that.

How great! I celebrate the good news because it is something that will positively affect millions of Cubans, including families, immediately.

How great! Because the private sector will also benefit, as they sell products that the State sells for an exorbitant price and their potential clients have had really low wages up until now.

How great! It holds the expectation that bureaucracy will diminish slightly and our applications might be a little speedier.

I would like to be an optimist, but my objectivity doesn’t let me, as well as what I know about Cuban politics and the economy. Reality too, which is really harsh right now. If the measure were spot-on, if it were upheld properly and could have a major impact on our economy and society, we could shower Diaz-Canel with praise, or whoever it was that authorized the pay increase in our current situation. However, there are still some things missing.

Raising wages is the right thing to do because wages in Cuba are more than an injustice, they are absurd. They pay less than what a slave would receive with just the basics to get by. Raising wages is the first thing that needs to be done in order for Cuba to develop. But, not as a populist measure to give short-lived and dishonest enthusiasm to the Cuban people, but as a fundamental premise to incentivize workers to be efficient and make it possible for employers to demand quality performance.

However, this alone isn’t enough. It needs to go hand-in-hand with many other economic measures that allow productive forces to be free, and make this pay-rise sustainable, real, and even increase further, until Cuba is gradually on par with the rest of the region, or the First World.

This includes allowing (all) Cubans to set up their own companies, not only foreigners; establishing a fair and encouraging tax policy; allowing the private sector to have access to foreign trade; liberalizing the national market so it can satisfy the population’s demands and operate autonomously; and they could also transform the most important state-led companies, at least, into independent, capitalist businesses and offer many of the least important to become shared ventures among employees and privately-run, in different ways, depending on which option is the most feasible. It would be enough in the beginning to untangle the rust of the centralized state system which has been wearing down the bearings of our economy.

But, nothing like this has been done. Suddenly, nominal and real wages have gone up. It’s expected that only the former will remain, as an illusion, because the second will go back to the same as the populaiton’s purchasing power falls. If this unwanted forecast comes true, it will end up causing people more harm.

This initiative amidst a crisis seems to be Nicolas Maduro’s words of advice, to see if another ally stands by him at the top of global hyper-inflation rates. A lot of propaganda has been created around this and a significant percentage of workers have taken a deep breath of relief, but it’s the same kind of relief you get when a strong drug is administered for a terminal illness.

I don’t know why it reminds me of the Party Guidelines, zeolite and moringa. More of the same old.

Osmel Ramirez

I'm from Mayari, a little village in Holguín. I was born on the same day that the Vietnam War ended on April 30, 1975. A good omen, since I identify myself as a pacifist. I am a biologist but I am passionate about politics, history and political philosophy. Writing about these topics, I got to journalism, precisely here on Havana Times. I consider myself a democratic socialist and my main motivation is to try to be useful to the positive change that Cuba needs.

4 thoughts on “Diaz Canel’s Wage Increase for Cuba’s Public Sector

  • July 10, 2019 at 2:46 pm

    As I explained above, they just print the additional pesos.

  • July 9, 2019 at 3:02 pm

    It looks like a piece meal effort to keep the public sector machine running. I heard that their service to the public is terrible. Where did the funds come from? That must be A State Secret as Cuba does not disclose it’s financial affairs to the general population.

  • July 9, 2019 at 10:55 am

    As Cubans are paid in cash pesos Brad, they will just print it! Remember that although it is Diaz-Canel who is the public face, “Comrade Raul will head the decisions for the present and future of the nation.”
    But where will Cubans be able to find food to buy with their increased levels of pay? This is communist economics in practice.

  • July 9, 2019 at 8:31 am

    Where is the money going come from during this new crisis?
    And why did it take so long for this to occur, because they actually don’t have the money?

    Prices for everything will continue to climb rapidly likely.
    Sounds like Osmel here should be running the economy/country instead.

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