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The low Cuban workplace productivity – 5 matters (?)

November 7, 2011

One of the things I was interested in having a look at in Cuba is the economy. For several decades Cuba followed the USSR economic model. With the demise of the Soviet Union the economic upheavel required a bit of the rethink. In the past couple of years the Cuban state has once again turned its mind to economic change and (some) renewal. A English chap staying in Cuba has recently blogged about the changes here and here if you are interested. I have been told that Cuba workplace productivity in Cuba is fairly low. Having talked to some people and observed some practices I can offer at least 5 suggested reasons why this may be the case.

1. Wages are low. Wage apparently start somewhere around 300 to 400 Cuban Pesos (CUP) per month, that is about 12 to 16 Convertible (tourist) Pesos (CUC). Whether it is possible to live on that money per month is a moot point, if possible, its certainly not easy. A view of one tourist is here but there is far more on the net as well.

2. Borrowing (theft) from the workplace is fairly common. Whether Cuban workers do so on the knowledge it is wrong, or justify it on the basis that the workers ‘own’ the means of production and thereby the products they are ‘reallocating’, may depend on the person doping the ‘borrowing’ (stealing). It seems however that getting by on the low wages is one driving force for the practise. What you can’t obtain (both income and goods and services) in the formal economy is obtained through the informal economy.

3. Seemingly a lack of ownership of work or a feeling of inclusion and participation. These are my words to describe a situation where (until recently and through most of the economy) the state makes many of the decisions and rules. Being Socialist, the state represents the workers, or so the theory states. My sense is a bit of socialism ‘in the name of’ the workers but without true representation and inclusion by the workers themselves. In New Zealand we hear from time to time the importance of people feeling like they have a stake in society and the need for inclusion. A lack of such causes alientation and withdrawl. In NZ this inclusion requires amongst other things, money. I won’t speculate too much on the Cuban situation as I simply don’t know anything in depth.

4. Centralised decision making. Too many decisions are made at a central level and too few at the point production or consumption occurs. An example I saw was a cafe a few blocks from a Casa I stayed at. The cafe served ‘food’ and beverages. It also made available magazines and books for reading or purchase. Decisions made about the ‘food’ and beverages, I was told, was made by one bureaucracy (whether local or central Government I am not sure) whilst decisions about the hire or sale of the magazines by another arm of government. 2 complimentary activities on one premise but administered by 2 seperate and remote decision making bodies.  

5. Misallocation of human resources. A few years ago it was fairly common apparently to have the likes of doctors, nurses, scientists and teachers working in the tourist sector, waiting tables, driving taxis etc as the income stream was greater than doing the jobs they trained for. Tips from waiting tables was more lucrative than teaching children or looking after peoples health. That situation, I have been told, has changed a little bit in recent times. Whether it has or has not however, having highly skilled people undertaking rotuine service industry work must be an incredible waste of human resources and skills.

So maybe these are 5 reasons (amongst others perhaps) for low productivity in the Cuban economy. Low wages, workplace theft and misallocation of resources, a lack of emotional investment and ownership of work, centralised decision maing and poor allocation of skilled human resources. I have been assured many times that the Cuban state and workers are well aware of such issues. How the solutions play out is something that time will reveal no doubt.

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