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realclearworld

Reports from Cuba: Wages in Mariel: One Good Thing and a Lot of Bad Things

By Dimas Castellanos in Translating Cuba:

Wages in Mariel: One Good Thing and a Lot of Bad Things

From cubacontemporanea.com

In accordance  with the new Foreign Investment Law*, workers will be engaged by an State-run employing organisation. When you factor in the fact that the only union permitted is the one representing the interests of the State, we are looking at a capitalist-style relationship in which the workers have no-one to defend them. Although we already knew about this, the information provided by the Director General of the regulating office of the Mariel Special Development Zone (ZEDM) is surprising just the same. Let’s see:

First of all, the ZEDM workers will receive 80% of the pay rate agreed between the employment agency and the investors. Next, payment will be in Cuban pesos (CUP), so that, in order to pay for nearly all their daily necessities they will have to convert them into convertible pesos (CUC). Thirdly, they won’t exchange what the workers are paid into CUC at the official conversion rate of 24 CUPs to 1 CUP, but at a special rate giving the workers only 10 CUPs for every 1 CUC.

The first of these is relatively good, because up to now Cuban workers contracted to entrepreneurs or countries never received 4/5 of the amount paid amount for their work. The second one is bad.

Let’s suppose that a foreign entrepreneur pays $1,000 a month for the services of an electrician; the employment agency converts the dollars into 1,000 CUC, of which the electrician gets 800. With this money, which he has earned, he could lead a decent life without having to “fight” or “invent” anything to survive.

The third part is the worst, because with the special rate of 1 CUC for 10 Cuban pesos, the 800 dollars is no longer 800 CUC, it gets converted into 333 CUC. And in the end the state grabs two-thirds of the $1,000 paid. In this way the worker is hurt by the foreigner but more than anything by the State.

On the other hand, the worker will retain the rights contained in Art 27 of the  Foreign Investment Law, which indicates that the investor has to comply with the employment and social security legislation applying in the Republic of Cuba.

But the fact is that the employment legislation, contained in the Employment Rules Law, passed 29 December 2013, in spite of the fact that it constitutes a step backwards from the Law of Labour Information Commissions of 1924 (enacted in order to channel the employer-employee conflicts related to loading sugar), nevertheless, having disappeared, it is impossible to know exactly what it says.

The disparity between the level of pay and the cost of living in Cuba is primarily due to the decades of totalitarian socialism, especially from 1989 on, when price inflation began to outstrip salary increases, leading up to the present crisis, one of whose manifestations–with the most negative impact–is inadequate pay.

That problem is so worrying for Cuban workers that it was referred to in an interview with Carmen Rosa–who is right now leading the preparation for the 20th Congress of the CTC (Workers Central Union of Cuba)–published in the newspaper Granma dated 27th April: in all the analyses carried out this year the recurrent theme of the assembly members’ proposals relates to salaries. That shows that the organisers’ objectives go in a different direction to the worries of the unemployed.

The 1940 Constitution affirms the following in Art. 61: The Law will set up a process for periodic review of salaries or minimum wages, by way of joint committees for each employment sector; in accordance with the living standards and particular circumstances appurtaining in each region and each industrial, agricultural or commercial activity.

Today, not only do the workers not participate in this process, but they also do not know how the calculation works out. By definition, the minimum wage is the basic amount you need to subsist. Using this definition, most of the salaries in Cuba, being insufficient to cover basic necessities, are in fact lower than what the minimum wage should be.

Because of that anomaly, people have to look for other employment outside of the wage relationship–almost always on the edge of what is legal–and Cubans are forced to keep shifting from one place to another, from one activity to another and one profession to another, without regard to vocation or training.

The official press has stressed that thousands of jobs are going to be created with much higher salaries than the current average of 20 CUC a month. Nevertheless, the way in which they are paid, which in any other part of the world would lead to union protests, in the case of Cuban workers, having no space or institutions to defend them, they can only express their discontent in private, at the same time as they go to the employment agencies to try to improve their position, because that mechanism, in spite of the abuse and mockery, permits them to receive a higher wage than the national average.

It has to be added that one of the main worries of foreign investors is whether they can count on efficient workers, and therefore it suits them to pay them a salary capable of motivating them and awakening their interest in the results of their activities.

Having said that, the current analysis shows us that the way in which workers will be paid now can act as an obstacle to the objective of attracting foreign investment. Therefore, they need to change the proportion from one good thing and many bad things to the opposite of one bad thing and many good things, because asking for everything to be good would be like asking for the moon.

*Translator’s notes: This refers to foreign investment into Cuba, not the reverse.

Translated by GH

Originally published in Diario de Cuba.

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