Cuba to cut 500,000 gov't workers, reform salaries
By WILL WEISSERT and PAUL HAVEN
Associated Press Writers
HAVANA -- Cuba announced Monday it will cast off at least half a million
state workers by early next year and reduce restrictions on private
enterprise to help them find new jobs - the most dramatic step yet in
President Raul Castro's push to radically remake employment on the
communist-run island.
Castro suggested during a nationally televised address on Easter Sunday
that as many as 1 million Cuban workers - about one in five - may be
redundant. But the government had not previously laid out specific plans
to slash its work force, and the speed and scope of the coming cutbacks
were astounding.
Cuba's official work force is 5.1 million - meaning nearly 10 percent of
all employees could soon be out of a government job.
Workers caught off guard by the announcement said they worried whether
the tiny private sector could support so many new jobs, a sentiment
echoed by some analysts.
"For me the problem is the salaries, that's the root of it," said
Alberto Fuentes, a 47-year-old government worker. "If they fire all of
these people, how can they all become self-employed?"
The layoffs will start immediately and continue through April 2011,
according to a statement from the nearly 3 million-strong Cuban Workers
Confederation, which is affiliated with the Communist Party and the only
labor union allowed by the government. Eventually the state will only
employ people in "indispensable" areas such as farming, construction,
industry, law enforcement and education.
To soften the blow, the statement - which appeared in state newspapers
and was read on television and radio - said the government would
increase private-sector job opportunities, including allowing more
Cubans to become self-employed. They also will be able to form
cooperatives run by employees rather than government administrators, and
increasingly lease state land, businesses and infrastructure.
The announcement was short on details of how such a major shift could be
achieved, but its intent appeared to deal a body-blow to the decades-old
social safety net upon which the island's egalitarian society is built.
Castro has long complained that Cubans expect too much from the
government, which pays average monthly salaries of just $20 but also
provides free education and health care and heavily subsidizes housing,
transportation and basic food. Because unemployment is anathema in a
communist society, state businesses have been forced to carry many
people who do almost nothing.
"Our state cannot and should not continue supporting businesses,
production entities and services with inflated payrolls, and losses that
hurt our economy are ultimately counterproductive, creating bad habits
and distorting worker conduct," the union said.
Even before the announcement, interviews with scores of workers across
several government sectors showed that layoffs were already under way -
with many complaining the state was not doing enough to find them new jobs.
Larry Birns, director of the Washington-based Council on Hemispheric
Affairs, said a series of small changes - such as allowing the
unrestricted sale of cell phones, privatizing some state-run
barbershops, licensing more private taxis and distributing fallow land
to private farmers - have moved Cuba toward economic reform since July
2006, when serious intestinal illness nearly killed Fidel Castro and
forced him to cede power to Raul.
While none of those were blockbusters, Birns said, Monday's revelation
has the potential to be one.
"Cuba is rapidly becoming like any other country," he said. "It is not
going back. These are big changes."
Some Cubans also said they supported the changes, hoping that even a
small dose of private enterprise would go a long way in a country where
state mismanagement has led to frequent shortages of everything from
potatoes to toothpaste.
"There are many things that are deficient now including services, which,
of course, the private sector will improve on," said Moraima Santos, a
65-year-old employee in the Office of the City of Havana Historian. "I
completely support the government giving private employment licenses.
That's going to benefit a lot of people."
Others were skeptical.
Arch Ritter, an expert on the Cuban economy at Carleton University in
Ottawa, Canada, said the cutbacks rely too heavily on a work force
unaccustomed to going into business for itself.
"To imagine that the private sector is going to absorb so many people is
a bit of a stretch," he said. "It's going to be a major problem for the
country."
Building on his April remarks, Castro warned in August that layoffs
would be coming and said Cuba would expand private enterprise on a small
scale, increasing the number of jobs where Cubans could go into business
for themselves.
Monday's announcement also said Cuba will overhaul its labor structure
and salary systems to emphasize productivity so that workers are "paid
according to results."
Castro has said repeatedly he is seeking to reform the pay system to
hold workers accountable for production, but change has been slow in coming.
Currently the state employs 95 percent of the official work force.
Unemployment last year was 1.7 percent and hasn't risen above 3 percent
in eight years - but that ignores thousands of Cubans who aren't looking
for jobs because wages are so low.
The labor overhaul comes less than a week after Fidel Castro caused a
stir around the globe when he was quoted by visiting American magazine
writer Jeffrey Goldberg as saying Cuba's communist economy no longer works.
Castro later said that while he was not misquoted, his words were
misinterpreted - and that he meant to say capitalist reforms could never
work in Cuba.
Goldberg said Monday he was surprised by Fidel Castro's claim, since he
has made similar statements before. He said economic reforms such as the
one announced Monday prove the Cuban government realizes the need for
change.
"Not only has he said things like this before, but the on-the-ground
reality is that it is a truism that the Cuban model is not working, and
that is why they are starting this large-scale experiment with
privatization," Goldberg told reporters.
Associated Press writer Andrea Rodriguez contributed to this report.
http://www.miamiherald.com/2010/09/13/v-fullstory/1822656/cuba-to-cut-500000-govt-workers.html
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