cutbacks
Lorne Gunter September 15, 2010 – 7:29 am
Quick, name the source of the following statement, issued Monday:
"Our government cannot and should not continue maintaining companies,
productive entities, services and budgeted sectors with bloated payrolls
[and] losses that hurt the economy."
No, it's not one of Ronald Reagan's State of the Union addresses or a
speech by Margaret Thatcher, although those would be reasonable guesses.
And, no, it's not a page from Mike Harris's Common Sense Revolution
platform, circa 1995.
It's not even for the latest Fraser Institute, Canadian Taxpayers
Federation or National Citizens Coalition study on the failure of
stimulus spending and the growth of public debt in Canada. And it's
definitely not a remark made by federal Finance Minister Jim "Bloated
Budget" Flaherty.
It's from the Cuban Labour Federation, the government-run, union
governing body on the communist Caribbean island, and it is part of an
official announcement that over the next six months, 500,000
public-sector jobs will be cut there.
At a time when purportedly free-market Western governments are running
enormous deficits and hiring tens of thousands of new public-sector
workers in a vain attempt to prop up their economies, socialist Cuba has
just announced massive and immediate layoffs in its public sector.
What gives?
Cuba seems intent on privatizing its economy, undoubtedly to reduce
public expenditures. Because nearly every industry — from agriculture to
tourism to rum and cigar making — is government run, nearly 85% of
working Cubans are state employees. According to StatsCan, at the end of
June this year, 20.3% of Canadian workers (3.6 million) worked for one
level of government or another, or for a public hospital, school,
university or Crown corporation.
The Cuban government's announcement means roughly 8.5% of the Cuban
workforce of 6 million will be displaced over the next 180 days. With
just over 17 million Canadians in the workforce, the equivalent here
would be nearly 1.5 million workers losing their jobs. Everybody would
know people (and perhaps even several people) who were being pushed out
of their jobs.
The social, economic and political implications are enormous.
There may have been some hint of the upheaval last week when the father
of Cuba's Marxist-Leninist revolution and the country's former dictator,
Fidel Castro, admitted to The Atlantic Monthly reporter Jeffrey Goldberg
that socialism "doesn't even work for us anymore."
Since an intestinal ailment forced Castro to turn over official control
of the government to his brother Raul two years ago, the younger Castro
has been trying timid market and political reforms with big brother's
approval. Ordinary Cubans may now own satellite televisions and laptops
(although few can afford to), toasters, electric ovens and even air
conditioners. Most consumer electronics were banned in the 1990s when
the Soviets withdrew their annual oil subsidy, making reliable electric
power a scarce commodity. But their prohibition didn't hurt the
government's control of dissident messages, either.
However, none of this compares to Monday's announcement in terms of the
implications for Cuban society. If jobs cannot be found for these half
million displaced workers, social upheaval could result.
There are currently only 143,000 self-employed Cubans. By March, the
government hopes to issue licenses for 250,000 more. And the official
expectation is that these new entrepreneurs will hire most of the
remaining 250,000 former public sector workers.
"We have to erase forever the notion that Cuba is the only country in
the world in which people can live without working," Raul said last
month. Hear, hear. Now if only we could erase forever the notion that
Cuba is an example of socialist success from the minds of North American
labour leaders, sociology professors and medicare activists.
Can this massive reform succeed? Perhaps. Another of Raul's reforms has
been to permit more trade in U.S. dollars. If the entrepreneurial spirit
of Cubans in the U.S. can be translated to those back home – along with
millions of Yankee greenbacks – the Cubans might just pull off this
experiment.
But if it does succeed, expect it to force democratization and more
personal freedom, too. When people start to pay their own way, they like
to have more of a say over how they're governed.
National Post
lgunter@shaw.ca
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