Wage reform off to slow start in Cuba, report says

Wage reform off to slow start in Cuba, report says
Mon May 11, 2009 7:18pm BST

* Only 25 percent of companies said to embrace reform

* Workers and managers alike know little about new law

* Raul Castro's reform "still in diapers," magazine says

By Marc Frank

HAVANA, May 11 (Reuters) - More than a year after Cuban President Raul
Castro pushed through a wage reform aimed at rewarding productive
workers most state-run companies have yet to implement it, the official
Bohemia magazine reported.

It was the latest evidence that Castro's efforts to modernize the
communist country's economy were being resisted by a state bureaucracy
that controls more than 90 percent of economic activity.

The decree promulgated by Castro was supposed to lift wage caps and
replace a collective wage system with one based on piecework as a
centerpiece of his program to raise Cuba's economic output.

But Bohemia said in its latest issue available this week that a recent
labor ministry inspection found that "only 25 percent of the companies
inspected used some variant of the piecework system."

A law leasing vacant state lands to anyone willing to till them was also
stalled by bureaucracy, Raul himself admitted late last year, though
land grants have increased since then.

Castro assumed Cuba's presidency on Feb. 24, 2008 from his ailing
brother Fidel Castro, and quickly instituted reforms such as
decentralizing agriculture and opening up sales of such things as cell
phones and computers to the Cuban people.

He pledged to tame communist Cuba's bureaucracy and improve production
and efficiency by replacing an egalitarian pay system, in which everyone
received more or less the same amount, with one in which pay is
determined by productivity.

Egalitarianism, Castro said, had encouraged sloth, which was hurting
Cuba's economy.

EQUALITY NOT EGALITARIANISM

Socialism means social justice and equality, but equality of rights, of
opportunities, not of income," Raul said in a speech a few months after
taking office.

"Equality is not the same as egalitarianism. Egalitarianism is in itself
a form of exploitation; exploitation of the good workers by those who
are less productive and lazy," he said.

Castro's policy attempts to increase production and efficiency without
resorting to capitalism under a model first designed by the military
when he was defense minister.

In March, he replaced almost the entire economic cabinet he inherited
from his brother with army technocrats and party cadre experienced with
the model, called Perfeccionamiento Empresarial, loosely translated as
perfecting the state company system.

Decree Law 9 on the piecework system was signed in February 2008 and was
first due to take effect in August 2008, and then postponed until
December. The law also allows for a 30 percent increase in wages for
administration and sectors tied to performance where applying the
piecework system is impossible.

Bohemia reporters fanned out to a number of provinces where they
discovered many managers and workers knew little about the law. There
had been little if any discussion of the wage plan, despite a mandate
from on high to discuss it.

"Today, the use of wage formulas more in tune with the results of one's
work is still in diapers," Bohemia said.

Managers claimed they did not have the technical expertise to implement
the system, lacked adequate resources or simply were waiting for orders
from their superiors. Some claimed they were implementing the new wage
system, but workers said they had not.

Carlos Mateu, deputy minister of labor, told Bohemia, "the majority of
companies can adjust their system immediately ... by simply taking the
decision to go along with what's been established."

Mateu said management and labor should immediately put together a plan
in each company and implement it. (Editing by Jeff Franks and David Storey)

Wage reform off to slow start in Cuba, report says | Markets | Reuters
(12 May 2009)

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