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Posted June 11, 2008 by publisher in Business In Cuba

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(original title: Cuban official says equal pay may not work)

By WILL WEISSERT | Associated Press

The egalitarian wage system Fidel Castro spent decades building in Cuba is no longer viable, plagued by low pay, corruption and waste that can be eased by paying workers more for better work, a top labor official said in an interview published Wednesday.

Carlos Mateu, a vice minister of labor and social security, said many government companies have already eliminated caps on salaries for productive workers and the rest must do so by August.

The article in the Communist Party daily Granma contained few direct quotes from Mateu, a practice common in official Cuban media. But it said Mateu “underscored that there has been a tendency for everyone to get the same, and that egalitarianism is not convenient.”

“That is something we have to resolve,” Granma said, adding that the traditional Cuban pay system saps employees’ incentives to excel since everyone earns the same regardless of performance.

That is “unfair because if it’s harmful to give a worker less than he deserves, it’s also harmful to give him what he doesn’t deserve,” the article said.

Mateu said the new compensation system fits with the mantra of “socialist distribution” often mentioned by new President Raul Castro: “From each according to his ability, to each according to his work.”

That’s meant to distinguish the current system from Cuba’s ideological goal, Karl Marx’s formula of communism: “From each according to his ability, to each according to his need.”

The vice minister was unavailable for further comment Wednesday, and a Labor Ministry official said she was not authorized to provide more information.

Details of the new system were not revealed. It is not clear if officials plan to pay higher regular salaries for better workers, or if they would just receive bonuses for good performance.

Mateu told Granma that while ordinary workers will no longer be subject to wage limits, managers will be limited to a 30 percent increase if the team working under them increases production.

The government controls more than 90 percent of the economy, and while most Cubans get free housing, education, health care and subsidized food rations, the average salary is just 408 Cuban pesos—US$19.50 a month.

An end to wage caps could eventually lead to a true middle class, since it would potentially allow Cubans to openly accumulate wealth. But it runs counter to the notion of an egalitarian society that ailing, 81-year-old Fidel Castro promoted throughout his 49 years in power.

Since succeeding his elder brother in February, Raul Castro has dropped much-despised bans that prohibited most Cubans from obtaining cell phones in their own names, renting cars, staying in luxury hotels and buying computers, DVD players and other devices.

He has also made it easier for thousands of state employees to get title for homes they once rented for work, and moved to overhaul the floundering, state-run agricultural sector, making it easier for private farmers to tend unused government land so as to increase food production.

  1. Follow up post #1 added on June 11, 2008 by publisher with 3905 total posts

    Fidel must be spinning in his grave. grin

    How dare Raul undo in mere months what Fidel did for decades!!!

    At this rate Raul will have the entire economy overhauled by this time next year.

    Let’s hope he’s not afraid to release some political prisoners along the way.

    Cuba consulting services

  2. Follow up post #2 added on June 12, 2008 by publisher with 3905 total posts

    The more I think about this situation the more I wonder if it is really a desperate attempt to get the worker’s (read Cuban government) more productive.

    I’m not sure that paying Cuban workers more money based on their performance is going to be enough to motivate them. Even if they make TWICE as much money than they do now, will that even motivate them to work harder and be more productive?

    I wonder, maybe not.

    So, is the Cuban government desperate because they need hard working people who don’t have to steal from the government and/or work other jobs to make a living.

    If this new reform does not work, could the economy simply collapse because no one wants to work for the Cuban government anymore?

    Raul can’t just launch one reform after another without the Cuban people saying “Hey, I want to work in the tourism industry or be self employed”.  Therefore no one is left working of the largest employer on the island, the Cuban government.

    Is this an early sign that Raul is losing control of Cuba?

    Cuba consulting services

  3. Follow up post #3 added on June 12, 2008 by nacho with 111 total posts

    Among other comments, the BBC correspondent in Havana writes here that the impact of the salary increases will be limited

    Agreed, but how about the psychological effect? I am sure you’re average Cuba might think (at least for while) “Wow, salary increases, things are getting better”

    Maybe in their desperation the Cuban goverment is hoping the reforms will buy them time?

    I can’t wait to Fidel’s response to this wink

    I remember when Raul lifted the ban on DVDs and cellphones, Fidel wrote one of his editorials warning about the danger to health allegedly posed by cellphones wink

  4. Follow up post #4 added on June 12, 2008 by publisher with 3905 total posts

    Good point.

    Let’s see what Fidel’s ghost has to say about this. Unless they waitied until he was dead to release this news.

    Yikes. Fidel might come back from the dead to reply to this one.

    Cuba consulting services

  5. Follow up post #5 added on June 12, 2008 by manfredz with 464 total posts

    Actually this “change”  may have more potential than all teh cell phones and devd players and computers combined…
    of course it has to statrt small (30% increase of next to nothing is still next to nothing) but a sacred cow is being sacrificed.
    Rather than seeing this as a signal that raol is losing it, it may be a sign that he is firmly in control.
    Again, time will tell.
    P.S.  I agree with your mention of releasing political prisoners along the way.  It should be such an easy step, yet bring in a whole lot of international approval.

  6. Follow up post #6 added on June 12, 2008 by publisher with 3905 total posts

    Agree with your sacred cow being sacrificed comment. Right on about that.

    Cuba consulting services

  7. Follow up post #7 added on June 13, 2008 by publisher with 3905 total posts

    CubaNews is reporting in a special report that this resolution was adopted in February. That would mean that within just days of Raul becoming President on February 24 that this resolution was adopted.

    Apparently this is one of Raul’s very top priorities.

    Probably would have been too shocking if they released it sooner.

    Cuba consulting services

  8. Follow up post #8 added on June 16, 2008 by abh with 244 total posts

    The discussion here surrounding the issue of the wage change prompted me to write that I don’t think one should expect as much political change as economic policy change.  If Raul will mimic the “Chinese Model” in any way it will be this.

  9. Follow up post #9 added on June 18, 2008 by cubanpete with 127 total posts

    I’ll believe it when they rename the Karl Marx theatre in Havana after Groucho.

    For change (cambio) we can believe in.

  10. Follow up post #10 added on June 18, 2008 by abh with 244 total posts

    haha well maybe you will need to pitch in and get the Groucho Marx theater built pete, as I’m sure you know they already have a Parque (Vladimir) Lenin and Parque (John) Lennon.

  11. Follow up post #11 added on August 26, 2008 by Viva Cuba- Viva la Revolucion!

    Be clear that the only reason Raul waited until he had been appointed to be his brothers successor to reveal such delicate news was so as to not undermine his brothers orginal ideas, cause even tho he understood his brothers idealistic old fashioned beliefs ..Raul has a much more openminded approach to certain subjects, lifting these bans is his way of retaining the peoples trust & faith in his leadership abilities, ensuring that CUBA will continue to flourish as it has over the last Fifty Years.

    Our Government is the one you should be disecting, as it is this government that is seeking to turn Canada,Mexico & the UsA in to a one government society within the next two years - making every right you now know to be yours be taken away without even your consent.
    This is already in the works, President Bush signed this agreement in 2005
    educate yourselves people!


  12. Follow up post #12 added on August 26, 2008 by publisher with 3905 total posts


    You are on a very short leash. If you think Cuba has been flourishing for the past 50 years you are yet another Castro propagandist and I’m sick of that shit.

    Stay on topic and leave out the propaganda.

    Very simple rules.

    Cuba consulting services

  13. Follow up post #13 added on August 26, 2008 by Viva Cuba- Viva la Revolucion!

    no propaganda, just an honest well informed opinion!
    Go learn about this governments plans for the people it represents and see where you stand on this al whn your aware of whats really going on around you… the link is included in my above post!

  14. Follow up post #14 added on August 27, 2008 by nacho with 111 total posts

    “Well-informed opinion”? When was the last time you went to Cuba? If you’ve been there (unless it was on a Castro-sponsored tour) you’d realise that the country is crumbling down, that the over-touted “achievements” of the revolution (aka free education and healthcare) lie in tatters after decades of “flourishing” under the government.

    Also, you’re lucky you can get a “well-informed opinion” for yourself. Spare a thought for the Cubans living in the island that only hear one voice and one opinion, dictated through the Granma newspaper and the Cubavision TV channel. Have you forgotten the limits to the free flow of information in Cuba?

    So you say that “Bush is trying to turn Canada, Mexico & the UsA in to a one government society”

    Last time I looked, Castro and Chavez were trying to do the same. wink
    Also do you remember what Castro did in the 70s and 80s? “Spreading the revolution” in Africa, Asia and Latin America, same way the Soviet did in the 50s and 60s in Europe etc ? Does that sound familiar

    I have my own thoughts on the USA goverment and policy but that is not the topic of this posting

    You also posted “Be clear that the only reason Raul waited until he had been appointed to be his brothers successor to reveal such delicate news was so as to not undermine his brothers original ideas”

    Does that mean that the “original ideas” of Castro I are now too old fashioned for the XXI century?

    How will a few crappy cellphones at outrageous high prices will make a difference? And the access to hotels? Don’t get me started on that one!

    AND did you ever wonder why were these things banned in the first place? NO, I’m sure many like you, VIVA, applaud magnanimous heir Raul for giving access to cellphones and hotels and you would not dare questioning Fidel for banning them in the first place. Access to hotels in 2008? That has been part of the Cuban Constitution as set out by the Cuban goverment!!!!
    Have you ever read Nicolas Guillen????? Give the poem “Tengo” a go

  15. Follow up post #15 added on August 27, 2008 by Yeyo with 411 total posts

    Mr. WILL WEISSERT says on his article “.....while most Cubans get free housing…..”

    The only cubans that get free housing are people on high positions on the government, the rest of the Cubans pay for their housing. Obviously an small amount if you compare it with the rentals and mortgates in North America but not so small if you compare it to the Cuban salaries.

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