Mass Cuban layoffs get mixed reaction
By Alan Gomez, USA TODAY
Cuba's announcement Monday that it will allow half a million Cubans to
work for themselves rather than the state was greeted with mixed
reactions from U.S. observers of the communist nation.
Jaime Suchlicki, director of the University of Miami's Institute for
Cuban and Cuban-American Studies, said it's wrong to interpret the move
as a drastic shift toward a capitalistic economy.
Suchlicki said Eastern Europe saw similar slow "creeps" toward
capitalism in the past that failed. Only countries such as China, which
took large steps toward a true version of capitalism, have had success
in their attempts to move away from their centralized economies.
"These systems are not transformable little by little. Band-Aid
solutions don't work," he said.
But Philip Peters, Cuba specialist for the Lexington Institute, a
Washington-area think tank that promotes free markets with minimal
government intrusion, said many of the workers will benefit from the move.
"If this grows, then you start to see a sector that becomes a much
larger private sector within the socialist economy and generates a lot
of purchasing power," he said.
As a socialist country, the state officially employs 95% of the
country's workforce. That means mechanics, barbers, store clerks,
waiters and others who work in retail and service industries are paid
salaries by the state.
Unemployment hasn't risen above 3% in eight years, according to the
regime, but that ignores thousands of Cubans who aren't looking for jobs
that pay salaries worth $20 a month on average.
On Monday, the Cuban Workers Confederation, a union controlled by the
Communist Party, announced that layoffs will start immediately and
continue through the first half of next year. The confederation said
Cuba will increase private-sector job opportunities, including allowing
more Cubans to become self-employed, forming cooperatives run by
employees rather than government administrators and increasing private
control of state land, businesses and infrastructure through long-term
The statement did not say which parts of the economy would be retooled
to allow for more private enterprise. The confederation said that the
state would continue to employ people only in "indispensable" areas such
as farming, construction, industry, law enforcement and education.
"Our state cannot and should not continue supporting businesses … and
services with inflated payrolls, and losses that hurt our economy are
ultimately counterproductive, creating bad habits and distorting worker
conduct," the confederation said. Cubans will soon be "paid according to
results," it said.
Castro has permitted small aspects of a free market, such as approving
some licenses for private taxis. But Suchlicki said that even though
some of those workers will be granted business licenses, little will
change for the better until workers are allowed to own their businesses
and buy from and sell to foreign companies.
"It's not a market economy. It's a survival economy," he said of a
system that has helped make Cuba one of the poorest nations in the
Western Hemisphere for decades.
Peters said the change will give workers an incentive to expand their
businesses, hire additional employees and maximize profits.
"I'm sure they'll take advantage of it, and I'm sure they'll do well,"