New rules of the wage game

The Cuban government put into force new regulations for the payment systems to bring enterprises closer to the paradigms of efficiency and productivity proposed by the process of economic changes.

Cuban enterprises continue seeking formulas to simultaneously increase their productivity, efficiency and their workers’ incomes.

Foto: Empresa de Artículos Plásticos Suchel-Cepil, perteneciente a la Industria Ligera, organismo que contribuyó a que la provincia de Ciego de Ávila, ganara la sede del acto central por el 26 de Julio, Día de la Rebeldía Nacional, el 18 de julio de 2011.AIN FOTO/ Osvaldo GUTIERREZ GOMEZ/Mvh

One of the most sensitive subjects in the sphere of labour and daily life in Cuba, wages, again came to the fore this month. The Labour and Social Security Ministry (MTSS) put into force on April 1 Resolution 6 to modify the payment systems according to results applied in the Cuban entrepreneurial system.

 

The new regulation replaces Resolution 17, implemented barely two years ago with a similar purpose: directly linking the wages of workers in enterprises to the fruit of their personal labourwhether through payment systems according to yield or through the payment by individual or collective piecework, fundamentally.

 

Driven by the explicit goal of increasing productivity and reanimating the economy, the government began these tests in 2008 with Resolution 9 of that ministry, which soon was forgotten since it was unable to achieve the benefits announced then.

 

When the Labour Ministry presented the latest version some days ago, it recognised in an official note, in addition to positive results, the existence of “problems that were assessed in the Council of Ministers meetings in May and December of last year.” Resolution 17’s faults had led to debates among workers, officials and economists, which even reached the media and gave government food for thought.

 

According to the MTSS, the new formula ratifies that “wages are self-financed by the entity and their formation responds to the level of fulfilment of the management indicators,” a principle cited once and again by the Cuban authorities.

When a business entity does not meet its plans and cannot finance the wages previewed for reasons not attributed to it, it will be able to implement forms of payment that protect more its workers.

When a business entity does not meet its plans and cannot finance the wages previewed for reasons not attributed to it, it will be able to implement forms of payment that protect more its workers.

 

“One cannot pay if there isn’t a productive backup,” Economy Minister Marino Murillo, who also heads the Commission for implementation and Development, said last December to Parliament. “One cannot pay more if wealth is not created,” he insisted, after reporting to the MPs that 113 enterprises had surpassed the indicator limit established then by Resolution 17: spending on wages per peso of gross added value. Resolution 6 maintains that ceiling.

 

That regulation frequently put workers in a cul-de-sac, when the enterprise did not meet the plans and could not finance the wages still previewed because of reasons not attributable to the work collective. They were only left with the alternative of getting paid the minimum wage approved by the law. The new legal regulation increases protection “to the wage scale, according to complexity and responsibility of the posts.”

 

It also offers the possibility of going on to the form of payment by time instead of payment per yield. The enterprise management can make this adjustment once a year if the conditions previewed in the plan change because of reasons not attributed to the entity.

 

Resolution 6 takes a more advanced step toward the decentralisation of the payment systems per yields. While the preceding regulation left the authority to approve and implement them in the hands of the management of the entire enterprise, now the managements of the so-called basic business units (UEB) will have the autonomy to do so.

 

With the previous formula, all those structures or cells of an enterprise used the same wage system, without considering the differences in productivity and efficiency or the concrete benefits contributed by each one of them. A UEB is made up by a factory, a hotel or a business structure which groups together with others of similar type of work or activity, under a single enterprise. These units, in addition to being geographically distant from each other, frequently have sensitive differences from the point of view of the production of profits. But the enterprise, when the time comes to apply Resolution 17, did not recognise them.

 

The “same penalisation of all the UEBs of an enterprise when one of them did meet the requirements for the payment” had already been denounced in the debates about the application of the new wage policies.

 

Resolution 6 decentralises even further the authority to approve the payment systems per yields in the enterprises, an option that brings them closer to the reality and possibilities of each labour collective and to the goal of increasing productivity, efficiency and the workers’ incomes in the entrepreneurial system, something proposed by the process of changes of the Cuban economic model. (2016)

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