Wednesday, April 30, 2008

The Challenge of Boosting Productivity

LABOUR-CUBA: The Challenge of Boosting Productivity
By Patricia Grogg

HAVANA, Apr 30 (IPS) - Workers are facing thorny questions related to
productivity, wages, participation in decision-making or unemployment at
a time when the government is discreetly adopting measures aimed at
finally pulling the country out of an economic crisis that has dragged
on for more than 15 years.

The suffocating impact of economic problems on living conditions in this
socialist nation was the focus of many of the complaints and suggestions
voiced by ordinary Cubans during the widespread debates called for by
the authorities last year, after a key Jul. 26 speech by President Raúl

"The problems of low productivity and low wages will be resolved as each
sector implements the formula of paying in accordance with production
levels," said Ariel Terrero, a journalist and researcher who specialises
in economic questions.

"The ceiling for wages should be productivity, and not the other way
around," he remarked to IPS.

According to Terrero, wages should be linked to performance, especially
in leading productive and services sectors, whose development would in
turn bring improvements in salaries in other areas, like health and

In February, the Labour Ministry approved new general regulations on
wages -- in resolution 9/2008 -- which extended the system of
performance-based pay to the entire business community in Cuba.

The new system is aimed at boosting productivity, cutting costs and
expenses, curbing energy consumption, improving the quality of goods and
services, replacing imports with nationally produced goods, and
increasing exports and revenue flows into state coffers.

When the recession broke out in Cuba in the early 1990s, the purchasing
power of Cuban families plunged. During that period, the state propped
up dozens of inefficient public enterprises, continued paying the wages
of thousands of inactive workers, and continued to provide free
education and health care and heavily subsidised essential food items.

Experts estimate that today, 15 years after the peak of the crisis, the
average wage has one-quarter of its 1989 real value, although the
nominal value climbed from 188 to 408 Cuban pesos a month.

In a country where the overwhelming majority of the workforce is
employed by the state, it is estimated that an average family of four
needs nearly twice the current average income to cover their basic needs.

In 2005, the government granted wage and pension hikes to more than five
million public employees and retirees.

A new increase announced Sunday will benefit a total of two million
people, including pensioners, families receiving social assistance, and
judges and prosecutors.

In an article in the Catholic magazine Espacio Laical, economist Pavel
Vidal wrote that workers should receive a share of profits, which would
strengthen their stake in the results achieved by the company they work for.

For his part, Terrero argues that improving wages and working conditions
is not enough. On his web site, Cuba Profunda, he advocates
strengthening "workers' participation in decision-making in their
companies or workplaces," to strengthen their sense of belonging.

Labour leaders in Cuba have acknowledged that employees have become less
disciplined and dedicated as a result of the growing loss of a sense of
responsibility for their own performance, given that property in Cuba is
state-owned, or supposedly collective.

A Labour Ministry resolution in effect since April 2007 apparently did
little to change that. The new rules prohibit workers from accepting
personal payments on the job outside of their wages, using vehicles or
other equipment belonging to their government employer for personal
ends, and engaging in personal income-earning activities within the
workplace. "Serious breaches of discipline" listed by the resolution are
unexcused, unjustified or repeated absenteeism or tardiness, abandonment
of the workplace during the worker's shift, and low productivity.
Parallel to the challenge of improving economic efficiency, authorities
in Cuba must restore the prestige of work, especially among the younger

A 2007 study by the Communist Youth League (UJC) found that more than
282,000 young people in Cuba neither work nor study. The magnitude of
the problem is especially alarming in Havana, where 20 percent of the
working age population does not work.

The report attributes the phenomenon to the low level of education of
the young people who do not work or study, the gap between their
aspirations and the job opportunities available to them, and the
shortcomings of the coverage and assistance they are offered by the
relevant state bodies.

Many of these young people prefer to do whatever they have to do to get
by instead of working, because ultimately, they do not need to work for
a living, said an article in Trabajadores, the weekly publication of
Cuba's central trade union.

But in the meantime, "the country is lacking labour power in important
areas like education, health, construction or agriculture," it added.

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