Cuba removes wage limits in latest reform
Thu Apr 10, 2008 12:44pm EDT
By Marc Frank
HAVANA (Reuters) – Communist Cuba is revamping the state wage system to
create more incentive by allowing workers to earn as much as they can,
local media said on Thursday, in the latest sign new President Raul
Castro wants to improve the country's economic performance.
Under Labor and Social Security resolution nine, and for the first time
in decades, there is no limit on a state employee's earnings,
"For the first time it is clearly and precisely stated that a salary
does not have a limit, that the roof of a salary depends on
productivity," economic commentator Ariel Terrero said.
The Cuban state controls about 90 percent of the country's economic
activity and employs the vast majority of the labor force, often setting
wages from central offices in Havana.
Cuba has always prided itself on its limited range of salaries, while at
the same time some jobs do have perks and in the past bonuses were
available for some workers.
However, the egalitarian approach has come under fire in recent years
for holding back production.
"One reason for low productivity is there is little wage incentive and
this breaks productivity and stops bigger salaries," Terrero said.
He said the resolution, signed in February but yet to be published in
the official Gazette, is aimed at breaking the cycle.
Terrero said it corresponded with the socialist slogan, "to each
according to his work, from each according to his ability."
Raul Castro, upon taking over from his ailing brother Fidel Castro in
February as Cuba's first new leader in almost half a century, promised
to make wages better reflect one's work, a major complaint of the
"It is our strategic objective today to advance in an articulate, sound
and well-thought-out manner until the wages recover their role and
everyone's living standard corresponds directly with their legally
earned incomes," he said.
Raul Castro has also launched a major reform of the agricultural sector
to create conditions for state and private farmers to legally earn as
much as they can from their efforts after meeting state quotas.
In addition, since taking office, Raul Castro has lifted bans on the
sale of computers, DVD players, other consumer goods, cellphones and on
Cubans staying at tourist hotels, though prices remain out of reach for
"It is an old problem. There is no reason to fear someone earning lots
of money if it really is due to their work," Adalberto Torres, a Havana
"It is the same with farmers. Give them land, let them work, it is not
important how much they make. It is good because it means they are
producing," he said.
(Editing by Michael Christie and Bill Trott)