August 30, 2012 / 10:54 PM / 7 years ago

Cuba reports mixed results of labor reform

HAVANA (Reuters) - Communist-run Cuba’s five-year plan to cut more than a million state jobs, 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 economic 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. (here)

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, not 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.

Editing by David Adams and Eric Beech

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below