The World of Work in a Changing Cuba
By Steve Ludlam*
This article first appeared in "Cuba Si", the quarterly magazine of the British Cuba Solidarity Campaign in January 2008.
While commentators have been pre-occupied
with Fidel’s illness and the prospects of change
under Raul, there has been less attention to
changes already happening in the Cuban
economy, especially in employment relations
and union rights. These are key indicators of
Cuba’s socialism as it develops in a world of
ruthless capitalism.
The Special Period, of measures to overcome
the Soviet collapse and renewed US hostility,
is officially not over. However, in spite of the
tightened US blockade, the Cuban economy
has restored its pre-crisis GNP, based on the
success of strategic sectors of the Special
Period, notably tourism and Cuba’s ‘knowledge
economy’ in health, education and science. But,
and it is a big but for Cubans, the pre-crisis
distribution of incomes has not recovered. As
every visitor to Cuba knows, and as Cuban
leaders repeatedly stress, the Special Period,
with its ‘dollarisation’, remittances from
relatives in the USA, western tourists, self-
employment and partial marketisation of
agricultural produce, has undermined equality
in Cuba, both socially, and especially in terms
of income distribution. Less measurable has
been the impact on everyday ethics, with the
population having to boost legal incomes by
odd-jobbing and trading in the informal sector,
often with material pinched from work.
State workers, for example in health and
education, and indeed government ministers, are
paid on the modest national peso scales. Most
have limited opportunities to earn anything on
the side or in Cuba’s ‘hard’ currency, the CUC.
The CUCs are needed in the informal sector
and in the well-stocked CUC stores, which sell
at ‘western’ prices, enabling Cuba to ‘farm’
hard currency to pay for vital imports. Those
who can afford something in these shops, are
those get CUCs in salary bonuses, from tourist
tips, self-employment, remittances, or from
informal or illegal trading. A few constitute the
‘new rich’ attacked by Fidel, some of whom
have no need to work at all, something most
Cubans find shocking and immoral.
Since Fidel’s much-cited November 2005
speech lambasting corruption and black
markets, Cuba’s unions have prioritised the
fight against workplace fiddling. But union
leaders point out that until legal salaries once
again give people a decent income, this is an
uphill struggle. It is in this context that Raul,
in his 26 July speech, admitted bluntly that
ordinary salaries were ‘insufficient to satisfy
all necessities’. Nor, he said, could inadequate
salaries secure the ‘socialist principle’ of
distribution of income based on work. He
launched a nationwide debate in workplaces
and communities to discuss the problems of
everyday life, work and efficiency that preoccupy
Cubans and their government.
Addressing Income Inequalities
So what has been happening in recent years, as
the economy has been recovering, to address
inequalities? In the first place, in 2005, the
government raised national salaries and
benefits. The minimum pension was tripled,
and the minimum wage more than doubled.
All salaries were then raised modestly. There is
no income tax, but higher prices for electricity
and food in the non-rationed food markets
have eaten into the rises. Productivity bonuses
have spread. In the ‘company improvement’
sector of firms given more autonomy and
profit incentives, workers have seen average
30% increases in salaries. More generally
by 2004/5 some 1.5 million workers were
receiving productivity bonuses, often in CUCs.
Such bonuses now count as part of income for
calculating pensions, sick pay etc.
Other measures were aimed at reducing income
inequality. Cuba ‘de-dollarised’ in 2004, making
the peso and CUC the only legal currencies. In
2005 the CUC was revalued against the dollar
by 8%, and a 10% exchange tax imposed, in
effect an 18% tax on dollar remittances. And
the national peso was also revalued to close
the gap a bit with the CUC. In 2004/5 the
government acted to cut out unauthorised hard
currency activities by companies, and to prevent
corruption in dealings with foreign firms. Also
in 2005 the government sent the young social
workers into the fuel distribution networks to
regularise deliveries. This revealed that half of
Cuba’s fuel had been going straight in to the
black market! Since then other campaigns have
targeted cheating consumers in peso shops.
And the new progressive electricity tariff in
2006 indirectly taxes wealthy consumers,
some running self-employed CUC businesses
on highly subsidised peso electricity.
Raul’s insistence on 26 July that higher
salaries
require higher production and productivity,
a commonplace of Cuban debate, raises
other issues of central importance to Cuban
socialism, its workers and their unions. The
economy remains state-regulated, politics
rules the market. Cuba’s ‘apertura’, its opening
to capitalism, has been ‘Special’ and limited.
Cuba did not collapse into Russian-style
gangster capitalism. Nor is it ‘marketising’
along Chinese lines. But working life was
changed forever by the crises of the 1990s.
Full-time employment for life in a ministrycontrolled
enterprise has broken down. Over
90 per cent of workers are union members, but
often with new types of employer: state firms
in the ‘company improvement’ scheme, mixed
enterprises involving foreign capital, worker
co-operatives in agriculture, self-employment,
and much expanded service and high-tech
sectors.
Reforming Employment Relations
To take all this on board the national Labour
Code – Cuba’s core employment law since
1985 – is being reformed in an extensive
process of consultation, above all with the
unions. This is partly to incorporate subsequent
legislation, like greatly extended maternity
and paternal leave. But it will also formalise
the emerging post-crisis world of work. Cuba
is modernising and professionalising its whole
human relations culture. As Elio Valerino
Santiesteban, legal head at the Central de
Trabajadores de Cuba (CTC), the national
union federation, put it, ‘It is a new way of
thinking about human relations, and human
capital as a central element of the economy.’
All of this is delaying the new Code, but in
the meantime important reforms have been
introduced. In 2002 health and safety at work
law was strengthened, and the law on collective
bargaining revised to cover new types of
company. Crucially for workers and unions,
collective bargaining law requires that local
employment relations, and implementation of
employment legislation, are negotiated with
unions, with workplace assemblies having the
final vote on agreements.
In 2005 a major new employment law,
Resolution 8/2005, formalised equal rights for
workers on part-time and other non-standard
contracts. It set down workers rights in the
redeployment and redundancy situations in a
restructuring economy, notably the right to a
new job; income protection; and education and
training on full salary. Procedures for promotion
and training, and recognising qualifications,
were set out, tied to the worker’s right to
an annual review. In 2006 new regulations
covered forms of payment-by-results, shift
rates and other plus payments. There is an
emphasis on flexibility and productivity that
we normally associate with joblessness and
impoverishment. But in Cuba, on top of the
protection of the legal right to work and income
protection, everything has to be negotiated with
the unions and accepted by workers’ assemblies,
where all workers, unionised or not, vote. The
new laws give unions more not less power.
Cuba is Different
A recent example is new
laws on timekeeping
and work discipline,
erroneously described
by the BBC as the
new Labour Code,
and by Miami sources
as having provoked a
revolt against Raul! The
true story illustrates
the strength, not the
weakness of Cuban
society. Resolutions 187
and 188 were announced
in August 2006, for
implementation in
January 2007. But
workers and unions
argued that, while it
was right to regularise the working day, it
was unfair to penalise workers for being late
to work, or nipping out of work. The state of
public transport often made it impossible to get
to work on time. And shops and public service
and council offices worked the same hours as
everyone else, so workers had to visit them
during the working day.
So the implementation was postponed for three
months, to give time to fix transport problems
and negotiate new opening hours in shops and
services. Of course, especially in Havana,
transport could not be sorted out quickly enough.
But the key point here is that implementation
has to be through the collective bargaining
agreement, giving unions and workers
themselves an effective veto until material
conditions make implementation feasible and
fair. As Raul Hodel?n Lugo, Secretary General
of the CTC in City of Havana told me, ‘In the
places where these conditions might not have
been created, even though the implementation
date is reached for these Resolutions, we will
not agree to them being enforced. Unless
the conditions exist, we cannot apply the
Resolutions mechanically. The application is
flexible, not mechanical. Like everything else
in Cuba, we discuss with the workers.’
This is consistent with Cuba’s employment
relations culture. US-inspired propaganda
insists, for example, that strikes are illegal in
Cuba. This is untrue. There is no legislation
against strikes. There is simply no legislation
on strikes. The Cuban constitution and its
employment legislation embody positive
rights for unions. But, unlike in most countries
like the UK, the law does not regulate how
unions conduct their affairs or their industrial
activities. Cuba’s unions are organisationally
and financially independent, but they have a
constitutional right to propose, and be consulted
on, labour legislation. As Dr Francisco Guillén
Landri?n, head of the legal section of the
Labour Ministry, told me, ‘You must remember
that we do nothing, absolutely nothing, until
we reach agreement with our comrades in
the unions. If tripartite co-ordination prevails
today in any country in the world it is in
Cuba, according to the International Labour
Organisation.’ As for Cuba using managerial
‘human resources’ methods to sideline unions,
he laughed heartily and said, ‘Whoever does
that in Cuba is either suicidal or mad. We are
not a society of technocrats or profit seekers.
We work to satisfy peoples’ needs, and labour
is a right of the people.’
Unions know that they have to work hard to
make union and worker rights and participation
a reality. In recent years the unions have
retrained representatives at all levels, right into
the workplace, especially in health and safety,
and in collective bargaining. And the CTC is
restructuring itself to improve its performance.
So, as a new world of work emerges in Cuba’s
expanding economy, Cuba’s unions remains
at the heart of the political process, with the
central role in developing and defending
workers’ rights, rights that are indeed being
strengthened in the new legislation.
*Dr Steve Ludlam, University of Sheffield, has
been researching employment relations in Cuba
with the support of the Nuffield Foundation.
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