Is the time for wages here?

The economic transformations in Cuba this year have made incursions into the business sphere, deregulate the forms of payment to workers and almost increased threefold wages in the health sector.

Resolution 17 of the Labour Ministry only left as a limit for wages the productive capacity the workers and enterprises are able to display.

After being the focus of interminable controversies and dissatisfactions in the corridors of enterprises, workers’ meetings, in the streets and gatherings of friends, wages came up this year in the strategy of the Cuban economic transformations. After keeping them in the background, or frankly frozen, the authorities made several moves in that field to give some breathing space to workers and the very process of reforms identified as Updating of the economic model.

Resolution 17 of the Labour and Social Security Ministry (MTSS) in June opened a door to the solution of one of the most painful conflicts of national life. Three months before that, the government had decided to substantially increase wages in public health, a key social service in the traditional policy of the Cuban Revolution and now also basic as a source of net incomes in hard currency for the country.

The agreements came into force a bit after President Raúl Castro had personally rejected “a generalised wage increase in the state sector,” based on the opinion that it would cause “an inflationary spiral” if it was not backed by an increase in the commercial supply of goods and services. He expressed this concern in February at the 20th Congress of the Central Organisation of Cuban Trade Unions (CTC), which centred intense debates on the dilemma of low wages.

However, the president recognised before the union delegates a clear truth: “wages do not meet all the needs of the workers and their families.” He even reasoned that the low retribution “generates lack of motivation and apathy toward work, has a negative influence on discipline and encourages the exodus of qualified personnel to better paid activities depending on the required professional level.”

With the exception of the explicit reluctance to increase workers’ wages in general, starting March the government almost increased threefold the wages of more than 440,000 workers of the medical sector. The measure raised by billions of pesos the expenditures of the State Budget, precisely in the year in which the economy’s slowdown was most acute.

He justified the exclusive concession since the medical missions abroad had been contributing almost half of all the incomes for Cuba’s export of goods and services for several years. In 2014 they will grow to more than 8.2 billion dollars, according to the forecasts of the current economy minister, Marino Murillo.

A few weeks after the good news for the medical personnel, the Gaceta Oficial published a group of legal regulations to change the rules of the game in the sphere of business. In that package of regulations, issued almost at the same time as the approval of a new Labour Code, Resolution 17 of the MTSS eliminated the bureaucratic ceiling imposed until then on the wages of state enterprise workers.

The new legislation reorganises the payment for real results. It establishes as a ceiling only the productive capacity and profitability each worker or work collective are able to achieve and grants more autonomy to enterprise managements to decide the method of payment per item or by results, in order to really encourage productivity, quality and sales.

This regulation’s aim is to “eliminate administrative restrictions to encourage the increase in work productivity in the business system and modify the authority for the approval of the manner of payment according to yield.” Its Seventh article determines that the payment to workers “has no limits, as long as the expenditure of wages per peso of gross added value planned for the period does not suffer.”

Compared to its predecessor, the failed Resolution 9 of 2008 of the Labour Ministry, Resolution 17 came accompanied by other decrees that point to gradually deregulating the business activity, previously subject to a system of national economic organisation excessively centralised and vertical, which restricts the capacity for investment, development, inter-enterprise links and the structuring of value or production chains.

Now, the form of payment by yield is approved by the directors of enterprises or business groups, without being subject to established rates in offices of the MTSS that are far from the internal reality of each enterprise.

If this regulation were to find the paths to achieve an efficient application, it will resolve one of the objectives of social and economic justice assumed by the Updating of the economic model: guaranteeing higher incomes in the enterprises and in the work collectives that contribute greater wealth in goods and services to society.

Resolution 17, however, has not generated immediate applauses in labour circles. The workers have received it with caution. They see in it the threats their enterprises are facing to develop and expand their productions or services, and with them the wages, in an economy still wracked by structural deformations like the dual currency and exchange rate, among other problems that hinder a more agile commercial work to acquire raw materials or more productive technologies, for example.

The head of labour, wage and employment organisation of the CTC, Abel Rivero Ochoa, opined that “there won’t be a legislation that is able to satisfy wage improvements through the payment by results without an adequate guarantee of materials.”

In a commentary signed by Rivero Ochoa in the newspaper Trabajadores, this union leader identified as a danger the absence of liquidity to guarantee on time the productive resources to meet the plans and “the payment of wages to the workers without them having to do anything to avoid it.”

But he also recognised the threat of administrations without the capacity to act in the processes of reconciliating the demands and contracts, “even when they have the financing.”

The door seems open to a new road, but on the other side the lights are not clearly seen. (2014)

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