Why Cuban cab drivers earn more than doctors

Why Cuban cab drivers earn more than doctors
by Johnny Harris on October 26, 2015

On his worst days, Rafa, a Cuban taxi driver, makes $60 from all his
rides. A doctor in Cuba makes around $45 in a month. The colossal
disparity between these two salaries is one of the many perplexing
realities of the Cuban economy. Watch why the Cuban economy is so upside
down:

The taxi driver and the doctor

Armando is a 34-year-old taxi driver. He's also among Havana's rich, and
not because he inherited any money. I bump into Armando outside his
Central Havana apartment at dusk on a warm Sunday. He has stepped out to
have a drink of high-quality aged rum while taking in the evening
breeze. "I've been driving a taxi for 15 years," he says with pride,
sipping his rum with an air of prestige not normally shown by taxi
drivers. He goes on to tell me of his years driving a taxi he rented
from the government. After several years, with a small loan from a
family member, Armando bought a yellow taxi, obtained one of the
few private licenses available in the country, and began making big bucks.


"I have to pay $20 per day in taxes. But after that, all the money goes
straight to me." Armando has tapped into the hottest market in Cuba from
which to extract his fortune: tourism. He can charge between $20 and $25
per ride to the airport. Doing that a few times per day plus some rides
within the city puts him at around $1,500 per month in profits, over 30
times more than the average physician's monthly pay of around $45.

"I live good here, and I have no intention of leaving," boasts Armando,
in one of the rare moments that someone talks to me with no complaints
about the situation in Cuba.

His entire family has emigrated to Miami, but he has no desire to
follow. "Cuba is safe. You see right there?" he says, pointing to a
lamppost across the street. "There are five security cameras just on
that one post, with police monitoring every one, 24 hours a day. You
think I'll ever get robbed with that kind of security?" He doesn't need
an answer. He continues, "If this were Mexico, a robber would pop out
right now with a gun this big and stick it in your side and steal that
camera in an instant. But not here. Why would anyone leave Cuba?"

The key to Armando's success

Cuba's economy works as a central planning model, where government
ministries dole out resources and set everything from prices to
inventories to salaries. The fact that a taxi driver can make so much
more than a physician is a reflection of the Cuban government's heavy
focus on tourism. For years, the central planning apparatus has valued
tourism as a key mechanism for both bringing in revenue as well as
propagating the idea that Cuba is thriving. Many pesos are collected by
the high prices on everything related to the tourism industry.

A walk through Old Havana reveals the fruits of this focus: Old
architecture is restored, trendy venues are humming with people and
alcohol, and, lucky for Armando, taxis are abundant, their prices
hovering around typical rich-country rates or higher. This means lots of
tax money for the government, and lots of profits for Armando.

There are other ways to compensate doctors

Even with the clumsy pricing schemes of the central system, Cubans have
developed alternative ways of valuing the highly skilled. "Tomorrow I'm
going to the doctor because my kidneys have been hurting because I sit
so much in the car," says Armando, speaking a little louder and more
candidly now that the rum has hit his blood. "I am going to show up with
a fresh bottle of a fine liquor under my coat and when I get there I
will flash it to the doctor. The doctor will then call me in sooner than
later, and I will present him with this 'regalito' [little gift]. In
return he will do a good job on me." Armando claims that going to the
doctor without a "regalito" is asking for longer wait times and a
halfhearted job by the doctor. "That's how we do thing 'a lo Cubano,'"
he says, echoing a catchall phrase that captures every idiosyncratic
form of corruption that has emerged in the Cuba of the Castros.

The exodus of skilled labor

Armando's relatively high income and the economic backwardness contained
therein helped shed light on a question I have run into since I arrived
here. I go to places and ask the bottom-of-the-totem-pole workers if
they've "been working in this for a long time." Some had. Others would
recount their past life as a highly skilled tradesperson who left that
life for a higher salary doing remedial entry-level work. Eduardo used
to be a mechanical engineer; now he cooks at one of Havana's few private
restaurants. Lazaro used to be an information scientist and now
illegally serves ice cream in the street. Carlos used to be an
elementary school teacher and now waits tables at a tourist restaurant
in Central Havana. And Graciela was a professor of technical sciences
for the military academy and now walks the streets illegally selling
faded copies of the Cuban constitution. This is how you survive "a lo
Cubano."

Source: Why Cuban cab drivers earn more than doctors - Vox -
http://www.vox.com/2015/10/26/9593658/cuban-castro-taxi-driver-doctor-economy