Cuba dismissed 596,500 state workers since 2009

Posted on Monday, 02.24.14

Cuba dismissed 596,500 state workers since 2009
BY JUAN O. TAMAYO
JTAMAYO@ELNUEVOHERALD.COM

Cuba has slashed 596,500 workers from its bloated state payrolls, but
remains far short of its initial goals for cutting public spending and
making its economy more efficient, according to official figures.

The campaign to cut back on government and state enterprise jobs,
launched in earnest in 2010, has been part of ruler Raúl Castro's
efforts to make the Soviet-style economy more efficient by opening the
doors to more private enterprise.

But after setting ambitious goals, Castro has slowed the reforms,
recognizing that faster reforms might be risky and acknowledging
resistance from bureaucrats reluctant to surrender their tight — and
personally profitable — controls on economic activities.

A report submitted to a congress of the Cuban Labor Confederation (CTC)
showed that jobs in the public sector fell by 596,500 since 2009,
according to a report Sunday in the newspaper Juventud Rebelde, the
official voice of the Young Communists' League.

The report also noted that the number of licenses issued for small-scale
private businesses like restaurants and "self-employed" jobs such as
plumbers and gardeners, had increased to more than 450,000 in 2013, the
newspaper said.

Castro, addressing the closing session of the CTC congress in Havana
last week, warned that his government would not consider major salary
increases for state workers — their average wage now stands at $20 per
month — unless productivity rises.

"It would be irresponsible and counterproductive to order a generalized
salary increase in the state sector, because it would only cause an
inflationary spiral unless it is fully backed by a matching increase in
the goods and services on offer," he said.

"Let's keep in mind the essential principle that in order to distribute
wealth, it must first be created," Castro said.

Nevertheless, he added, Cuba's economy "will remain based on the
ownership by all the people of the fundamental means of production, with
the state enterprise as its principal form."

Cuba has a labor force of about 5 million. Until Castro's reforms,
launched largely after he officially succeeded ailing brother Fidel
Castro in 2008, the government controlled an estimated 85 percent of the
economy and jobs.

The layoffs, while needed to make the economy more effective, have
fallen short of goals because the opening to the private sector has been
relatively slow and limited, said Carmelo Mesa-Lago, a University of
Pittsburgh expert on the Cuban economy.

The Cuban government has acknowledged it has a surplus of 1.8 million
workers on the state payrolls — one of the reasons behind the low
unemployment rate of just 3.5 percent that it officially reported in 2012.

It initially set a goal of 1 million layoffs by the end of 2011, but the
Juventud Rebelde report showed it had met a little less than 60 percent
of the goal two years after the deadline, Mesa-Lago said.

The latest target set by the government is now 1 million layoffs by
2016, according to Mesa-Lago, regarded as the foremost expert on the
Cuban economy.

Castro has been trying to kick the economy into a higher gear by
shifting second-tier state enterprises — Fidel nationalized every single
business on the island in 1968, down to shoeshine stands and sandwich
shops — to the private sector and self-employed.

His government has been renting barber shops to their employees, for
instance, and taxis to their private drivers. It also has been licensing
private cooperatives to take over state enterprises such as restaurants.

But the Juventud Rebelde report noted that the congress of the CTC, the
island's only legal labor union, heard complaints that the government
retained too many controls over the "self-employed" and needs to do more
to support private businesses.

There are no wholesale markets where the self-employed can buy bulk
supplies at discounted prices, the report said, and government
inspectors are harassing some enterprises while turning a blind eye to
the illegal work of others.

The report, nevertheless, added that CTC members at the congress
"insisted that there's much to be done to confront the violations and
illegalities among members of the non-state sector, such as tax evasions
and other acts of indiscipline."

Source: Cuba dismissed 596,500 state workers since 2009 - Cuba -
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http://www.miamiherald.com/2014/02/24/3957773/cuba-dismissed-596500-state-workers.html