Cuba moves to cut 'inflated payrolls'

Cuba’s trade union confederation, the CTC, announced in the September 13 edition of the Communist Party (PCC) daily Granma that half a million workers, one in 10 state employees, will be dismissed by May 1. This is downsizing on a vast scale: in Cuba’s post-capitalist, centrally planned economy, the socialist state currently employs 85% the workforce of 5.2 million.


Raul Castro: leading Cuba’s socialist construction in tough times.

That same day, British trade unions threatened strike action to save 150,000 public sector jobs from Conservative-led government budget cuts. That’s 150,000 out of a workforce of 30 million, or 0.5% of all British workers. Like the dog that didn’t bark in the Sherlock Holmes story, the fact that the Cuban government is not bracing itself for a political crisis in the wake of the CTC announcement reveals something about the relationship between the working class and the government in Cuba.

Unlike in Greece or Britain or Australia, working people hold state power in revolutionary Cuba and the Cuban government acts to defend and promote the interests of the working class as a whole. This is lost on those leftist critics who have rushed to proclaim that the PCC leadership is embracing neoliberal capitalism. If this were true, why aren’t masses of Cubans out in the streets protesting? Would a working class capable of sustaining a popular revolution for five decades in the teeth of vicious US trade sanctions , and two decades of the harsh post-Soviet “Special Period” crisis, roll over to sackings of this magnitude without so much as a whimper?

The acquiescence cannot be explained by invoking a terrifying police state that exists only in the imaginations of the ill-informed. The Cuban Revolution is held together by the force of persuasion, not the persuasion of force. Most Cuban workers support the dismissals because they understand the need for them, even though it will be a wrenching change for those accustomed to the state guaranteeing nearly every citizen a job.

The workers who are likely to be first in line for dismissal are those with much higher illicit incomes whose state-provided job is a cover for their real “work”, which involves pilfering materials from their state-owned workplace to peddle them on Cuba’s black market. Some dismissed workers will return to their existing workplace but as members of a production or service cooperative, rather than as employees of the state. Nobody will be made homeless by becoming unemployed, and all Cubans will comtinue to enjoy the right to free health care and education.

New socialist model

The rationalisation of Cuba’s state-sector workforce is not an isolated initiative, but part of what Cuban President Raul Castro calls the “updating” of Cuba’s socialist economic model. This, in turn, is part of a wider process of socialist renewal. Cuban journalist Luis Sexto captured the essence of this renewal within the revolution in a July 2009 commentary for the Progreso Weekly website: “Cuban society, rigid for many years, shakes off the starch that immobilized it ... to change what is obsolete without compromising the solidity of the Revolution’s power.” What is obsolete are many of the Cuban Revolution’s concepts, structures and methods that it copied from the Soviet Union.

The changes underway in Cuba take place in the context of an unprecedented public debate launched by Raul Castro in 2007, after his brother Fidel retired from the presidency to recover from a life-threatening illness. The aim of this debate is to strive for consensus on Cuba’s socialist renewal. Its depth and richness can be glimpsed in the commentaries and letters pages of the Spanish-language editions, accessible online, of Cuba’s two daily newspapers, Granma and Juventud Rebelde. For decades Cuba’s press was notoriously lacking in criticism and debate, but this is no longer the case.

Through the debate, a clearer picture has emerged of the broad outlines of what must be done to “change everything that must be changed”. The reform process strives for a new Cuban “model” of socialist development to replace the one that, as Fidel acknowledged in a comment to US journalist Jeffrey Goldberg, “doesn’t even work for us anymore”. The prevailing model, if it can be called that, is a patchwork of improvisation carried over from the malign influence of Soviet bureaucratic “socialism” and the post-Soviet Special Period; as well as much that is of enduring value.

As the debate in the Cuban press reveals, Cuba’s most class-conscious workers, far from resisting a radical overhaul of Cuba’s socialist project, have been urging the PCC leadership to move faster. Raul Castro referred to this pressure “from below” in his April 4 speech to the closing session of the 9th Congress of Cuba’s Union of Young Communists: “I know that some comrades sometimes get impatient and wish for immediate changes in many areas ... We understand such concerns that, generally, stem from ignorance of the magnitude of the work ahead of us, of its depth and of the complexity of the interrelations between the different elements that make society work and that shall be modified.”

Earlier in the same speech, he explained the need for a rationalisation of the state-employed workforce, “an extremely sensitive issue that we should confront firmly and with political common sense”. Castro explained that if people “do not feel the need to work for a living because they are covered by extremely paternalistic and irrational state regulations, we will never be able to stimulate love for work or resolve the chronic lack of construction, farming and industrial workers, teachers, police officers and other indispensable trades that have steadily been disappearing ... If we keep the inflated payrolls in nearly every sector of national life and pay salaries that fail to correspond with the results of work, thus raising the amount of money in circulation, we cannot expect the prices to cease climbing constantly or prevent the deterioration of the people’s purchasing power...”

Anticipating the current moves to deal with this problem, the Cuban president stated: “The Revolution will not leave anyone helpless. It will strive to create the necessary conditions for every Cuban to have a dignified job, but this does not mean that the state will be responsible for providing a job to everyone after they have been made several work offers.” He concluded: “We are facing really unpleasant realities, but we do not close our eyes to them. We are convinced that we need to break away from dogma and assume firmly and confidently the ongoing upgrading of our economic model in order to set the foundations of the irreversibility of Cuban socialism and its development.”

In an August 1 speech to Cuba’s National Assembly of People’s Power, Castro said that the success of the rationalisation process would depend on the active participation of the trade union movement “in a climate of transparency and dialogue”. The principle that those who are most capable and committed should keep their jobs must be strictly observed, he said, “to avoid any display of favouritism, as well as gender discrimination or any other, which we must deal with firmly”.

Private sector

What will happen to the half a million workers who will lose their state jobs in the coming months? According to reports in Granma and PCC briefing documents leaked to the foreign press, the state aims to rehire 35,000 workers in priority sectors such as construction, agriculture and education, where there are labour shortages. The government hopes the rest will be quickly absorbed by an expanded cooperative and private sector. To facilitate this, restrictions on self-employment and small businesses will be eased. For the first time since 1968, when the revolutionary government nationalised all urban small businesses, the self-employed will be permitted to hire workers other than family members, reviving a class of small and perhaps medium-sized capitalist entrepreneurs in Cuba’s cities and towns.

Some 250,000 workers are expected to join the ranks of the existing 143,000 licensed self-employed. A further 200,000 will be encouraged to form small production and service cooperatives. It is likely that urban cooperatives will rent state-owned premises, pay taxes, share profits, set prices and be able to sell goods and services to state entities. Cuba’s central bank is studying the feasibility of extending credit to the private sector.

The PCC leadership’s decision to allow the private sector to play a greater role in Cuba’s post-capitalist economy is not without risks, but neither is it a desperate gamble. It breaks with decades of Soviet-inspired “Marxist-Leninist” dogma, but not with Marx or Lenin’s ideas about the transition from capitalism to a fully socialist society. Neither Marx nor Lenin advocated state ownership and management of the entire economy during the building of socialism, only its “commanding heights” — large-scale enterprises in which labour is objectively socialised.

Subordinated to the planned economy, taxed and regulated by the socialist state and kept within certain limits, a flourishing cooperative and small-scale private sector would not only boost labour productivity by absorbing excess workers in the state sector. It would also contribute to the revenue needed to maintain the Cuban Revolution’s achievements in health care, education, sports, culture and international solidarity, and to fund Cuba’s industrialisation.