Cuba’s private sector out earns state workers
Development: The national statistics office (ONE) reports that Cuba’s urban private sector workers and rural farmers now earn more than state workers.
Significance: These latest figures prompted one commentator to ask whether this amounts to Cuba’s first “capitalist crisis”. The cash-strapped Cuban government is preparing to lay off up to a 1.0m public sector workers in the next few years and hopes that they will be absorbed by the nascent private sector. It is also withdrawing other benefits for state workers, such as the monthly food ration book, which will be reserved for the neediest. The authorities will also have to resolve the problem of the island’s dual currency system sooner rather than later in order to prevent even wider income disparities developing between state and private sector workers and between those citizens with access to US dollars (whether through the black market or via family remittances from aboard) and those without such support. President Raúl Castro is determined not to allow social divisions between the ‘haves’ and ‘have-nots’. It may already be too late for that.
Key points:
• According to the ONE, urban workers had an average monthly salary of US$41 in 2010, while farmers earned US$28 a month on average. In contrast, state workers earned about US$18/m, though state wages are supplemented with additional benefits. However many state sector workers depend heavily on the illegal black market and on US dollar remittances to subsist.
• The ONE says that 3.9m people are employed by the state, with almost 750,000 now classed as private sector (individual or cooperative) workers. The total economically active population is 4.9m (of a total population of 11.2m).
• In 2010, 589,000 farmers generated earnings of US$197m, while 147,000 urban private sector workers generated US$73m. The state sector generated US$831m.