On the heels of Fidel Castro's admission (and subsequent retraction [1]) that the Cuban economic model no longer works [2], the government has announced [3] [ES] that it intends to cut massive numbers of state jobs [4], in an effort to breathe some life into the island's struggling economy.
The Cuban Triangle [5] says of the news:
The headline is bland: ‘Announcement of the Central de Trabajadores de Cuba.’
The news is huge: 500,000 layoffs by next May, with a ‘parallel an increase in the non-state sector.’
If fully carried out, a major expansion of Cuba’s private sector will benefit many thousands of Cuban families and give Cuban Americans opportunites through remittances to help relatives in Cuba who will be working on their own.
El Cafe Cubano [6] is a bit more cynical:
Communist Cuba announced it will cut one million state jobs and SUPPOSEDLY encourage small business. I wonder if it has to do with the TOTAL INEPTNESS of the Cuban dictatorship? Soon will will be hearing that it's those pesky exiles or the embargo's fault.
Just wondering if some of those state jobs cut are:
-Guards at jails where political prisoners are held?
-maintenance of all of the castro klan? (can save MILLIONS HERE!
Havana Times [7] quotes the Cuban Workers Federation (CTC), which describes the move as “a plan to “update” the Cuban economic model and plans for the economy for the 2011-2015 period”, adding:
When the government-controlled Cuban media reports on layoffs in capitalist countries they are routinely described as inhumane measures to benefit the profitability of businesses as well as demonstrating the incapacity of the system to guarantee employment for all workers.
Now, in presenting the massive layoff program in the local press, it is reported as something positive for the country’s socialist system burdened by a surplus of workers in the giant State sector.
Those not interested will have the option of self-employment or joining another private initiative such as cooperatives. The details on how the self employment options and cooperatives will be allowed to operate have yet to be announced.
El Yuma [8] speculates on whether the measures will herald just that – the return of self-employment in Cuba, and The Cuban Triangle [9], in a follow-up post, lists some keen observations:
- The 500,000 figure is alarming – it conjures up an image of 500,000 Cuban workers going home with a pink slip, not knowing where they will go the next morning, and of the economy suddenly needing to create 500,000 new jobs.
- Self-employment, or trabajo por cuenta propia, is another source of new employment. Many will surely welcome the ability to get a license so they can stop working in the shadows. There are many thousands of Cubans in this category…
- Cubans have been calling for the government to turn small state enterprises into cooperatives in the cities; cooperatives, after all, are a form of property that Cuba has allowed in the countryside for years. This will be interesting to watch. Conversion is easy, but profitability will depend on the workers and the rules under which they work.
- Last time I surveyed Cuba’s cuentapropistas, I found that those whose businesses operated in pesos were earning more than three times the average state salary. Here again, the rules will matter…
Havana Times [10] sums up the situation this way:
The imminent loss of jobs has raised new concerns in Cuba, but also new prospects, expectations and questions with regard to the expansion of private enterprise, as the new tax regime and guarantees for how the new system will function have not yet been made public.