June,
2001
Report of
violations of the ILO's International Labor Standars by the government
of Cuba (Cont.)
Chapter IV
The Effects of
Economic Policies of the Government on Salaries and Employment Policies
Salaries
At the beginning
of the 1980's, the face of employment and salaries was characterized by
what the government defined as a general reorganization of the salary
system. A general salary reform plan conceived for application during a
five year, period from 1981 to 1985. It's objective, to decisively improve
the economic sector by incrementally achieving productivity and therefore
improve efficiency in the economy. The plan didn't function as the emphasis
as always had been on pursuing the already failed socialist principals
of distribution while trying to fix the employment issues based on an
arbitrary quantity and quality of work quota increments set by the
government.
The salary scale
contended with the existence of a unique structural system that contemplates
twenty-three groups with salaries ranging from a minimum of [$100 pesos]
a maximum of [$450 pesos] monthly. Those specifications (a system
designed and fostered by the Soviets), creates a predetermined and
substantial salary differential between one group and another. The
State defines all the conditions of salary remuneration essentially
imposing strong arm, tactics, due to a higher elevation of
centralization. From the technical perspective, the excessive level of
uniformity provides no margin for identification of individual grades
of contributions and constitutes a destimulating factor for workers.
Workers are aware that their economic situation will continue to be
difficult, as basic needs are not met.
In the majority of
cases the salary that is paid is not a material response for goods and
services created. An over dimensionalized system has been maintained over
the years to sustain an artificially high level of employment. This
incongruency, has completely halted the financial progress and given
way to the accelerated devaluation of the salaries acquisitive power,
favoring a strong growth of inflation and drastically raising levels of
poverty.
The limited salaries
paid has in essence, proportionalized manual labor. A majority of which
requires great physical effort under adverse working conditions, (like
that of agricultural workers), and which are not properly esteemed. This
inefficient economic has salary structure has caused on occasions mass
exodus of qualified personnel from the country and reduced the chances
for a full work force in vital sectors in the impoverished economy.
At the present moment,
the designers of the economic policies are facing the point of crisis.
Salaries are not reaching workers, measures for curing financial ills
are a failure and inflation continues to gallop. If the desire is to
achieve increments of efficiency, the rational process of the work
force must be accelerated closing the gap of pay equal-to-equal work.
External debts constitute strong pressure over the government as it
gets dangerously close to the maximum level of exposure possible from
creditors. Necessities are accumulating and discontentment continues to
grow.
In 1994, when the
"special period" began, a substitute form of stimulation takes
effect. Currency is converted into essential goods in the hopes of
rescuing the economic motivation of workers. As a result the hard
currency lost its stimulus effect and acquisitive powers. This method
of compensation was being to be applied in those sectors connected to
foreign investments and which entailed monetary expenditures. These
systems create social segments of society that can be considered
privileged although in reality these workers are subject to intense
pressures and must, unconditionally surrender themselves to the system
as a prerequisite for working within it.
All of these forms
of compensation are strictly conditioned to the laborers compliance to
certain rules and regulations. They are not permitted absences or tardiness
regardless of the reason. They must avail themselves to the whim of the
administrators even if their desires are not work oriented. Before
placing a worker as a replacement in a position the administration has
to lower the pay scale and increase the levels of productivity and
responsibilities expected. Salaries paid cannot exceed five percent of
the national pay scale.
The politics of
employment is regulated by an accord signed on May 24th 1996 by the
Executive Committee of the Counsel of Ministers, which precisely
details guidelines for incorporating specific enterprises in accepting
alternatives to currency for the production stimuli. The accord says, "Vigilantly
maintaining the concept that the system of convertible pesos
[substitute currencies] is not considered a part of the salary, but is
awarded if the collective economic results meet the goals set forth. In
order to be eligible for this compensation the standard predetermined
regulations will be adhered to without flexibility." "The
financing of currencies for the stimulation in convertible pesos will
be sustained by the efficiency of each entity. It must be valued
jealously so workers do not see the stimulation of currency as part of
their fixed salary, but should be associated as an economic result which
requires a determined will for meeting goals."
Other privileged
workers, (who's salary base is lower than the country's average), are
those in the tourist industry. They are considered privileged because
they have access to hard currency (tips in dollars). To attain one of
these positions one has to be well connected to the government. The Minister
of Tourism has publicly stated that work in the tourism sector is for
revolutionaries.
One curious fact
to make note of, is that a portion of the employees gratuities are promised
by union representatives to be "donated voluntarily". According
to the CTC to help with the costs of the maintaining an infant and
maternity program and to help with the fight against Cancer. This is an
evident form of government, Party and union control of this sector's
workers. The government has gone so far as calculating the expected
percentages of monetary contributions to be made by these employees,
that if they don't receive will subject the employee to dismissal, as
positions in the tourism sector are considered lucrative.
In the last three
years the fixed exchange rate set forth by the National Bank of Cuba gives
an estimated twenty-two pesos for every dollar. This indicates that more
than three million Cuban workers earn a little bit over ten dollars a
month. The average Cuban worker earns a salary less than that of an
agricultural worker from any Central American country.
At the moment, the
salary situation may suffer another change with the introduction of a
new policy in state run companies mixed with the "System of Company
Perfectionism of the Armed Forces". This is a strategic move to
incorporate military personnel, in otherwise civilian administrative
positions. In its first phases the labor system is currently undergoing
the process of change in leadership in more than three
hundred-and-sixty selected entities. This structure has more than
sixteen subsystem components related to corporate goals that are based
in a decree entitled, "The general basis of Corporate
Perfectionism in Cuban State Companies". This is not a serious solution
to the problems, but a formula to seriously elongate the decline process
of Cuba's catastrophic economic situation
Salaries of Foreign
Exchange Workers
Due to Cuba by being
considered a high risk for investors salaries charged to entities with
mixed (foreign/State) capital is in general determined not to exceed the
pay scale of others areas such as the Caribbean and Central America. To
make offers more stimulating investors are guaranteed a competitive edge.
The maximum salary
of employees working in foreign entities is 700, Cuban pesos and the
investor is responsible for covering all of the predetermined salary
scale. This amount is based on the salaries as directed by the
Ministers of Salary and Social Securities, which breaks down in the
following manner:
100% Salary Scale
plus 30% additional pays (base coefficients, distant and late night shifts),
30% for the intensity of the work, plus 60% for social benefits, which
empowers the Cuban employment agency) plus 10%. This is a total of 230%.
The policies
established by the government for foreign exchange, contradict ILO's
95th Convention for the Protection of Wages:
· Article 5:
o "Wages shall be
paid directly to workers concerned..."
· Article 6:
o "Employers shall
be prohibited from limiting in any manner the freedom of the worker to
dispose of his wages."
The fact that the
Cuban government charges investors for workers wages in currencies with
the highest acquisitive power and in a quantity higher than that which
is paid to workers denotes the level of discrimination that exists in
this type of institution.
The Granma daily,
published March 26, 2001, the results of the work year as examined by
the counselors widened direction office of the Foreign Investments Ministry.
This report titled Marta Lomas provides information and analysis up to
the closing of the month of December of 392 active international economic
(investor/State) partnerships (333 in Cuba and 59 abroad). There have
also been 53 signed Promotional & Reciprocal Investments Protection
Agreements. During the first couple of months in 2001, 8 of agreements
were signed with Belarus, Austria, Yugoslavia, Zambia, Peru, Paraguay,
Denmark, and Croatia.
The emphasis was
on the "International Collaborators" workers who help meet the needs
for technical assistance. The report revealed that in 2000, 8,968
workers from varying sectors worked abroad [1,811 more than in 1999].
54% of the increment coming from the Integral Health Program, with
2,623 doctors, nurses, and technicians being loaned to 17 countries,
the majority being concentrated in Haiti with 725 of which 599 are part
of the IHP. "International Collaborators" only receive 10% of
the salary the foreign employer pays the Cuban government for their
services. To avoid massive desertions of personnel, passports are
confiscated by administrators, as soon as they arrive at the workplace
destination. Independent studies estimate that there are about 195,000
workers in companies tied to Foreign Investments.
A document titled,
" To the Foreign Investors", was ratified in Cuba on July 16th,
1998, by more than 30 independent organizations. It clearly states the
position to be assumed by the Cuban public and its work force when
dealing with the foreign investors as soon as a democratic government
is reestablished in Cuba. Considering that Cuban workers are paid 5% of
what the government is charging for their labor and level of commitment
these investors have with the non-democratic government, they have been
cataloged as traitors of the Cuban workers creators and collaborators
of the extreme levels of exploitation they are submitted to. To its
merit this document also recognizes foreign investors by considering
that they truly represent a possible option for the best interest of
the Cuban workers and proposes the immediate acceptance of the "Highest
Principals".
Recently in a meeting
concerning the Cuban economy, Carlos Lage stated, "The economy has
reported an increase of 4.7 % since 1995." and predicted that this
year there would be a growth in the Gross National Product. Ultimately,
he referred to what he qualified as, "discrete levels of
improvement in the lives of the population and the salary being
received by the workers of the island."
The existence of
independent investigative economists, journalists, and unions make it
clear that although statistics made public by the government assuring
economic growth, the measurements against which the population appraises
its situation is different. The Cuban government is a master of statistical
manipulation the results are the mirrored fruits of their expectations
and not reality. Calculating economic growth based on prices a decade
old gives little credibility to statistics. The Ministry of Economics
acknowledges, errors in the publicly recognized standard of measurements.
The governments desire to grow at any and all costs while not admitting
that the plans for development are elaborated on ideological policies
rather than on economic realities appears to be the primary reason for
Cuba's failing economy.
The Employment
Situation In Cuba
Based on official
estimates, the 1980's decade was characterized by the coming of age of
approximately 1 million juvenile workers born in the 1960's. The solution
to finding them work was what the government called broadening of productive
capacities and services. During the five year period from 1986 –
1990 15,000,000 pesos were paid, these youths.
In the early part
of the decade incremented growth goals of the Gross National Product were
attained, with the constant injection of Soviet financing. Acceptable
levels of productivity and efficiency processes allowed investors to widen
their scope of investment.
The process of
prioritizing political objectives, to maintain an unproductive
workforce is a detriment to the effective utilization of the same. This
mistaken policy permits the proliferation of superfluous employment,
intensifying the phenomenon of tumescent factories that are also a
socialist sub-employer. This whole situation has been reflected over
the course of many years in a deliberate fall and deterioration of
productivity and lowered renderings of basic funds. The decline of
basic funds was so severe that at the end of 1987 and again in 1989, a
part of the investments was allocated to compensate these renderings
The expectations
without limits of the foreign investors in the Cuban economy, has taken
its toll on employment. One example is: The largest textile factory in
Latin America was built in Cuba and at the beginning of 1988 it was supposed
to produce an average of 80 million meters of fabrics, an unattainable
sum. This factory employed more that 15,000 workers, it utilized more
public bus transportation than the whole city of Santiago, Cuba. The plant
managers also forgot to mention that this factory was probaly the most
inefficient in the world. In actuality, more than 70% of the workers were
left without jobs and the textile industry in the city of Santiago was
left a Slippers factory, a shoe repair shop, and other ideas concocted
of reconverting the plant to whatever suited a light industry.
By 1991, the
sub-employment rate, which became manifest at the end of the previous
decade had already increased, leaving a concealed but true unemployment
rate. The unemployment crisis continues to grow.
The unemployment
rates were at about 7.5% from 1994 to 1998. This seemingly low number
only takes into account people who go to the City Employment Director
to be inscribed for programs and who solicit government work. Evidently,
the unemployment calculation, just like the Cuban economy, is not a reliable
source of information. In 2001, the unemployment rate is placed at
anywhere from 18% to 20% of the economically active population. At the
moment, the number young adults that have a higher level of culture and
who generally live in the capital cities of the provinces characterize
the unemployment situation of today.
Until a there is
a radical change in economic policies, a vicious cycle is maintained of
not substantially increasing productivity. Middle class salaries increase
on occasion more than the economic policies. The circulation of money
within the population will not be diminished, therefore, reducing the
effect of the already miserably low salary the workers earn. This ultimately
causes a negative effect in productivity.
Basic employment,
artificially created and sustained at any and all cost to productivity
in the Cuban economy created the following:
o An excessive
abundance of mid-level management.
o High degrees of
productivity fluctuation and absenteeism.
o Undisciplined
laborers and technicians.
o Unproductiveness
o Corruption
o Salaries that rank
below poverty level.
The sugar cane and
other agricultural sectors, which are not sources of employment for
displaced workers due to the process of "Industrial Perfectionism"
is a paradigm of the inefficiencies in the utilization of productive
recourses. The number of agricultural workers, including the so-called
Basic Units of Cooperative Production, is estimated a 1,129,000
workers.
According to the
FAO statistics, which the Cuban government never refers to for information,
states that the Cuban agriculture demonstrates an outcome that is lower
than the lowest global levels and is inferior to the levels in Haiti.
It is distressing to observe how over the course of 42 years of constant
economic experimentation, Cuban agriculture has evolved in this mortifying
way.
One of the problems
is created when there is a reorganization of employment. Produced by
governmentally operated companies that function under the "Process
of Industrial Perfectionism" umbrella. The constant restructuring
creates uncertainties in the workers.
Resolutions released
by the Ministry of Work, Financing and Prices, relates "that the
salary and condition of workers who's, work results exceed the
expectations of the process of nationalizing the work force, do not
result in problematic realities." In an essence workers are not
compensated for extra or overtime work and the government doesn't
acknowledge this as a significant issue. There is no unemployment
compensation in Cuba, when an employee's contract ends so does all
source of income. Only the workers who are laid-off due to the "perfectionism
process" are guaranteed 60% of the contracted salary during a
determined period of time
In practice and based
on the constant reports received from Cuba on a daily basis. Each time
that a process of strange persuasion is put in place "to remedy",
"to nationalize", "to perfect", "reorganize",
etc. workers that oppose the system or are simply not wanted or needed
by the system are displaced. All members of the country's work force,
any one who fails, gets sick, too old, too political or humanitarian,
men women and children alike are without labor rights. Sectors, like
the Tourist Industry, are subject to even further discrimination
persons will remain jobless for not having a "professional
demeanor" or for "Being Black".
There are strong
concerns facing Cuban workers.
- How do the economic
strategists plan to deal with the critical unemployment situation?
- Will there be
financial assistance offered to the hundreds of thousands currently
without employment?
- Will there be
some kind of resolution, positive or negative, for those unemployed
for refusing to do hard labor in the agricultural sector or "volunteer
work" in the micro-brigades?
- How will the
government deal with the incongruent reality of failed economic policies
(needing substantial incremental improvements in efficiency) and the
supposed lower levels of unemployment?
- Is it possible
to reach adequate levels of productivity in an economy controlled by
an outdated monolithic structure who's goal is not the improvement of
its work force but rather its own preservation?
- How and when
will the change to democratic representation and a market driven economy
be implemented, as they are the only mechanisms that can revert the
current processes.
Without a doubt
socialist economic principals have failed in Cuba as they have
everywhere else. The economy is spiraling out of control and in many
sectors of society has already crashed. The government's current
integration of administration and armed forces is a move to further
entrench itself. The independent labor movement seeks a constructive
working relationship with Capitalists in a future democratic Cuba.
Investors will no doubt contribute to the economic recuperation of the
country. Democratic representation is the predecessor to the creation
of dignified employment, and living standards for all sectors of Cuban
society. CONCLUSIONS
This report shows
that the government of the Republic of Cuba consciously violates the
fundamental conventions of the International Labor Organization. They
have offered no convincing response when inquired regarding these
violations. The Cuban government's contempt towards human and labor
rights is evident, which is all the more reason it should be pressured
to change. Free human rights and labor organizations should denounce
these aggressive policies, which are contrary to the international
standards of civilized labor rights.
The advancement of
democracy and independent unions in Cuba is unattainable within the current
process, though its cultivation is essential for the development a solid
union structure. Economic motivation along with equal representation
must reach all sectors of society in all corners of the country.
The diversity of
the free trade organizations, of which there are currently approximately
62 groups, could immediately ease unemployment on a short-term basis.
These organizations have to work diligently to guarantee a cohesive unity
despite their diversity. It is very clear that the Cuban government is
interested in dividing and conquering this movement. It is still easier
to discredit perceived adversaries by branding them as counterrevolutionaries
working for the mafia in Miami than it is to admit failure and change.
The efforts to divulge
this information should be increased. What Cuba's independent labor
movement does for its workers and what it is subjected to by the
government should be known internationally. Another limitation of the
independent labor movement in Cuba is its lack of affiliation to
international labor organizations, be it the Inter-American Labor
Organization, (affiliated to the CTC before 1959), or to the "CLAT"
(Latin America Workers Union). The CLAT has taken stride in this
direction affiliating and supporting the efforts of the "CUTC"
(Cuban Workers Unitary Council). This affiliation without doubt has
favored the work of this "CUTC". The Inter-American Labor Organization
shows no interest nor does it have a coherent policy in reference to
the dilemma of the Cuban workers.
It is urgent for
the International Labor Organization and others to evaluate the human
and labor violations that occur daily in Cuba, as per the International
Employment Standards. It is necessary to further inquire and investigate
what is happening to Cuban workers. It is with the vigil help from abroad
that the Cuban economy will begin to recuperate itself.
RECOMMENDATIONS
1)It is evident that
the lack of financial recourse is a hindering factor of the evolution
of free trade unions within Cuba. For this reason it is of the utmost
importance to find sources of funding which would contribute to creation
and development of the independent labor movement.
2)To officially
recognize designate and teach independent labor leaders from the
principle opposition groups the International Standards of Labor. To
provide them with the tools and materials necessary to further teach
workers of these Standards. This could be achieved through ILO
(International Labor Organization) and its regional infrastructure.
3)Independent labor
organizations within Cuba should inform workers of ILO's fundamental
conventions.
4)Expand radio
programming directed at the Cuban workers, realizing an economic labor
analysis taking into account the State/Employer aspect and divulging
ongoing results.
5)Cuba's independent
labor unions must continue to insist the Ministry of Justice give a formal
response to their solicitude for legalization.
6)Reports and documents
on the reality of Cuban workers should be made known at regional
events.
7)Independent Labor
Unions should focus their efforts on the recuperation of lost economic
and labor rights, such as:
a.Freedoms to Organize
and Associate.
b.Cost of Living/Wage
Increases
c.Improved Health and
Safety Standards
d.The creation of
a Labor Collective, according to international parameters.
8)U. S. needs to
verify what has happened to the thousands of Cuban workers repatriated
as part of the migratory accords. The U.S. and International Human Rights
Organizations should formally insist the Cuban government cease the hostility
campaign waged on certain workers when they are returned.
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