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Cubans cheer higher wages, new economic measures
HAVANA, June 29, 2019 (BSS/Xinhua) – Havana was abuzz on Friday with newly
announced government measures to spur the economy, including wage and pension
hikes for public-sector workers and retirees.
The measures, which was unveiled late Thursday amid an otherwise bleak
outlook due to heightened U.S. sanctions and open hostility from a
conservative White House, will benefit over 2.7 million Cubans.
State-run Cuban Television reported that starting in July the minimum wage
will rise to 400 pesos (17 U.S. dollars), while the average salary will rise
to 1,067 pesos (45 dollars).
“It is something all public-sector workers really welcome because they
have been demanding it for many years,” Madelin Guzman, an elementary school
teacher in Havana, told Xinhua.
“I believe the government and President (Miguel) Diaz-Canel have made an
important decision. It will become a new work incentive for all state
workers,” she added.
Public sector workers in Cuba include those in the sectors of healthcare,
education, culture, sports, civil service, housing and defense.
Emilio Ortega, a college graduate, said the decision reflects the
government’s determination to implement much-needed reforms in Cuba.
“Salaries will still be low and not as we all expected, but it’s an
important first step that satisfies us,” Ortega said.
On the government’s introduction of a monthly tax for social security that
workers need to pay, Ortega said “it seems logical and acceptable that we all
contribute to social security because Cuba is an aging country. The younger
workforce isn’t enough to replace those who retire, and the state will have
to assume that economic burden in the future.”
According to Economy Minister Alejandro Gil, around 1.2 million retired
state workers will benefit from the wage hike.
“It’s definitely good news, although our pensions are still very low
considering the price of some goods and services in the country,” said Gladys
Bustillos, a 77-year-old retiree.
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The Cuban government has pledged to keep a close eye on prices to ensure
higher salaries and pensions do not have an inflationary effect.
The full package of economic measures approved by the Council of Ministers
is to be “detailed over the coming days,” the government said.
“These measures seek to encourage savings, bolster domestic production,
diversify and increase exports and substitute imports, promote local
development and enhance state companies,” Gil said.
Moving towards the unification of Cuba’s dual-currency system is another
goal, the minister added.
For over 25 years Cubans have used two pesos: the Cuban peso (CUP) worth
about 4 U.S. cents and the Convertible peso (CUC), which remains parity with
dollar.
The CUC was introduced after the collapse of the former Soviet Union in
the late 1990s and is used to buy goods at some retail stores.
Putting an end to the dual-currency system is expected to lead to the
removal of subsidies for state companies, higher prices for goods, and the
loss of thousands of public-sector jobs.
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