Monday, July 19, 2010

Cuba's Private Sector Push

While growth in government spending under Obama has contributed to a counter-cyclical rise in Washington DC employment, Cuba's moving the other way:
At a state project to refurbish a decaying building in Old Havana, one worker paints a wall white while two others watch. A fourth sleeps in a wheelbarrow positioned in a sliver of shade nearby and two more smoke and chat on the curb.

President Raul Castro has startled the nation lately by saying about one in five Cuban workers may be redundant. At the work site on Obispo street, those numbers run in reverse.

It's a common sight in communist Cuba. Here, nearly everyone works for the state and official unemployment is minuscule, but pay is so low that Cubans like to joke that "the state pretends to pay us and we pretend to work."

Now, facing a severe budget deficit, the government has hinted at restructuring or trimming its bloated work force. Such talk is causing tension, however, in a country where guaranteed employment was a building block of the 1959 revolution that swept Fidel Castro to power.

Details are sketchy on how and when such pruning would take place. Still, acknowledgment that cuts are needed has come from Raul Castro himself.

"We know that there are hundreds of thousands of unnecessary workers on the budget and labor books, and some analysts calculate that the excess of jobs has surpassed 1 million," said Castro, who replaced his ailing brother Fidel as president nearly four years ago. Cuba's work force totals 5.1 million, in a population of 11.2 million.

In his nationally televised speech in April, Castro also had harsh words for those who do little to deserve their salaries

1 comment:

Gringo said...

Fidel has a problem with people making money. It upsets him that someone can be prosperous yet not depend on his largesse. If Cuba lays off redundant employees yet still has rules that penalize and prohibit the making of money in private enterprise, there may be an explosion.

"We are laying you off, but you will not be permitted to work in private enterprise, and if you do so you will not be permitted to make money, as it would humiliate the state workers."

That is a problem.