Cubans look to private sector to make ends meet

HAVANA (Reuters) - Cubans are finding that working for private employers instead of a paternalistic communist state is putting more money in their pockets, but they are still struggling to make ends meet.

Under ongoing economic reforms, tens of thousands are now working for small businesses, restaurants, farms and other enterprises where they put in long hours for relatively little pay, but say they have no better options.

The reforms announced last year are aimed at fostering private sector development as part of a broad plan to modernize Cuba's Soviet-style command economy and end a two-decade old economic crisis.

For the first time since the early years of Fidel Castro's 1959 revolution, private individuals in retail services, agriculture and construction have been allowed to hire employees, despite an article in the Cuban Constitution that says one's property and equipment "cannot be used to obtain earnings from the exploitation of the labor of others."

Cuba's new private workers appear to worry less about exploitation than they do remuneration.

Twenty-three year-old Lizet Chaviano said she was not happy with her job serving customers and cleaning up at "La Paladar de Alina", one of nearly 400 home-based restaurants in the capital, but it was better than the alternatives.

"I work from 8 a.m. to 10 p.m. every other day. I work too much ... and have to put up with the verbal abuse of the owners," said Lizet, who complained she only earned the equivalent of between $3 and $5 a day.

"But what am I to do? There is no possibility except this to make money since state salaries are not enough even to eat," she said.

MISERABLE, BUT BETTER

An informal survey in Havana and the provinces found wages as high as two to four times the average state pay of 20 pesos per day, or 440 pesos per month, the equivalent of around $18.

But, as with state jobs, income and working conditions vary widely depending on location and type of employment.

The government argues that any evaluation of Cuban living standards and wages should take into account what the state spends on subsidized food, services and utilities, along with free healthcare and education.

"It is still miserable, just less miserable," said Klaisi, a 32-year-old psychology professor and single mother who works weekend shifts at a Havana cafeteria called "El Principe."

She said she earns 75 pesos serving food, or little over $3 a day, which is double her state salary.

Wages for similar employment, and such jobs as making sandwiches and pizzas, range from 50 pesos to 100 pesos for a 10 to 12-hour day in Havana, and as low as 20 pesos to 30 pesos in other parts of Cuba where the economy is more depressed.

There are exceptions, such as the upscale "Bom Apetite" paladar in Havana, which caters mainly to tourists and local expats and where workers can make serious money for Cuba.

A 10 percent service charge added to each bill and tips are split between the employees, who can take home the equivalent of between 500 and 1,000 pesos per day, and occasionally more, according to a Bom Apetite employee.

GROWING SELF-EMPLOYMENT

The cash-strapped state, which still controls 90 percent of the Cuban economy, wants to slash a million workers from its payrolls and hoped to be half way there by last March.

But less than 150,000 have been cut, government insiders say, partly because there are not enough jobs for laid off workers to go to -- which is one reason the government is pushing private sector growth.

The number of people licensed for self-employment, often a euphemism for small business, has jumped from 148,000 at the close of last year to 330,000 as of September, according to the government, including 33,000 employees.

The figure does not include more than 200,000 agricultural workers who earn anywhere from 20 pesos to 50 pesos a day, depending on their hours, job and the season, according to private farmers.

There are also a large number of unreported employees, ranging from maids and gardeners to skilled tradesmen and construction workers, according to local economists, as owners seek to avoid labor and social security taxes and employees license fees.

Nearly 1,500 home-based restaurants, thousands of cafeterias and snack shops, as well as private lodgings for travelers, appear to be the biggest employers, though there are no official statistics.

"The going rate for an employee is 250 pesos a month, the minimum wage, but that is not what we really pay," said the owner of a bed-and-breakfast that rents rooms to foreigners in eastern Santiago de Cuba, asking her name not be used.

"I pay 24 pesos a day for someone who cleans four or five hours, plus a meal and the possibility for additional odd jobs such as washing tourists' clothes," she said.

(Editing by Jeff Franks and Anthony Boadle)