Better salaries for some in Cuba

Some game changes for Cuban workers

Last Thursday May 8^th Cuban workers received good news, at least some of them. Workers contracted to work at the free zone in Mariel will be able to keep 80% of their salary, out of which they will need to pay 5% tax to the state. Up to now the average salary for Cuban workers is only 20 dollars a month, so there is a considerable increase for those who will be selected to work in that area.

The Cuban government has recognized that salaries are no incentives to the workers and it has become an element that discourages work. For example, on recent years some doctors and nurses have started to work as taxi drivers or handicraft workers to be able to survive. Teachers have become so scarce on the island that the government needed to star classes by TV and accepted personnel not ready for those positions.  Some increases of salaries for doctors and nurses have been already announced and will take start on the month of June.

The bad news is that free contracting will not be allowed. Foreign companies would need to accept the condition to contract workers through a state owned contracting agency. This will guarantee the state the power to oblige the workers to faithfulness in order to work at Mariel, and the state security will have a guaranteed collaboration from the workers as a condition of employment.

It seems to make no sense that the official exchange rate to the dollar will be 10 to one, while now the official rate of a convertible peso is 24 to one. In my opinion that will be due to the following situation:

a.     The change of currency of Cuba will take place before June 28^th, date in which the new law for foreign investments will come into place.

b.     The state will artificially set an exchange rate of 10 to one for the American dollar.

All these news will change the dynamics of the relations with Cuba, especially of those companies dedicated to send money to the island and those sending packages to the island.

In Cuba prices will have a dramatic change and the new economic reality of the population and Cubans may modify dramatically their work relation with the government.

Let’s see if my speculation will be proved by reality.

Estela T. Delgado