Cuba reports mixed results of labor reform

Cuba reports mixed results of labor reform
Fri Aug 31, 2012 4:09am IST

* More than 350,000 join "non-state" sector
* Unemployment nearly doubles since 2009
* Wages show little improvement
By Marc Frank

HAVANA, Aug 30 (Reuters) - Communist-run Cuba's five-year plan to cut
more than a million state j obs, create a strong "non-state sector" and
improve wages has made only limited progress, according to a government
report released this week.

Authorities announced the shift of state workers to private and leased
small businesses and farming in late 2009 as the core of a broader
reform of the state-dominated economy that employed 90 percent of the
workforce.

Authorities want to streamline the state and pull it out of secondary e
conomic activity in order to focus on improving the efficiency of larger
state-run companies and the wages they pay employees.

The report, "Workforce and Salaries," revealed some progress in
self-employment, often a euphemism for small businesses and their
employees, and cutting bureaucratic jobs, but little improvement in
wages. ()

The report said there were 5 million people employed in 2011, similar to
2009, while unemployment rose from 86,000 to 164,000.

Of those working, 391,500 were self-employed in 2011, compared with
147,400 in 2009, when the government loosened regulations on small
businesses.

More than 170,000 individuals have also taken advantage of a land lease
program begun in 2008, the government recently reported.

There was some significant progress reported in trimming the
bureaucracy. The number of "directors" fell from 380,000 in 2009 to
249,000 in 2011.

But if the shift from state to non-state employment is aimed in part at
improving state wages and thus performance, to date the plan has failed.

The average monthly wage increased from 429 pesos in 2009 to 455 in
20l1, the equivalent of just over a dollar based on the official
exchange rate of 25 to 1, no t nearly enough to stimulate productivity.

The government reported food prices alone increased 20 percent in 2011.

Cubans spend most of their wages on food, as health and education are
free, few pay rents or mortgages, there is no insurance, and few pay
income and property taxes.

http://in.reuters.com/article/2012/08/30/cuba-reform-idINL2E8JUI9I20120830