Cuba: The Relationship Between Wages and Corruption / Dimas Castellano
Experience, supported by social sciences, teaches that interest is an indispensable engine for achieving goals. In the case of the economy, the ownership of the means of production and the amount of wages decisively influence the interests of producers. When that interest disappears, as happened in Cuba with the process of nationalization, the impediment to ownership and/or receiving wages that correspond to one’s efforts, forced Cubans to seek alternative sources to survive through the appropriation of the supposed property of the whole people.
Such conduct, prolonged over too great a time, becomes the moral component, that is, the socially accepted norms that are generalized throughout the whole society. To low wages Cubans responded with alternative activities; to the absence of civil society, with life underground; to the lack of materials, theft from the state; and to the closure of all the possibilities, with the escape into exile. Actions expressed in the same way in the nineteenth century; but now, not to abolish slavery and achieve independence, but to fight to survive. A collection of behaviors summarized in the popular expression: “Here what we must not do, is die.”
Given this reality, the government’s response focused on repression: police, surveillance, restrictions, inspectors and inspectors of the inspectors, expulsions, convictions and imprisonment. Actions on the effects, without taking into account that solutions require recognition of and action on the causes.
At the closing ceremony of the National Assembly of People’s Power on 7 July, the first secretary of the Cuban Communist Party (PCC), Raul Castro, said that the implementation of the Guidelines requires a permanent climate of order, discipline and exigency in Cuban society and the first step is to delve into the causes and conditions that have led to this phenomenon over many years.
He also added: “We have perceived with pain during the 20-plus years of Special Period the growing deterioration of moral and civic values, such as honesty, decency, modesty, decorum, honor and sensitivity to others’ problems.
He enumerated the negative manifestations, known by everyone, including that to a part of society it has come to seem normal to steal from the State, concluding that: It is a real fact that the nobility of the Revolution has been abused when the full force of the law has not been utilized, however justified that might be, giving priority to persuasion and political work, which we must recognize has not always been sufficient. And recognizing that we have regressed in citizens’ culture and civics.
Despite what he declared, he failed to recognize that the grants received from abroad, based on ideological relationships and therefore beyond economic laws, were useless to promote development and that in its place, this “help” overlapped the inefficiency of the Cuban model until the collapse of the socialist camp revealed the falsity of the foundations that underpinned it.
At that time, instead of finally redirecting itself toward the creation of a proper and efficient economy, the Government limited itself to circumstantial changes in hopes of better times, until new subsidies, from Venezuela, allowed it to stop the reforms.
The attempt to ignore that the interrelated system of the elements that make up society suffers permanent mutations, which if not addressed in time compel us to reform the entire social structure, has characterized Raul Castro’s government. He is endowed with sufficient political will to preserve power, but without the need for structural reforms, decided to deepen the changes aimed at achieving a proper and efficient economy, but subordinated them to the maintenance of power, which explains the limitations and failures of commitment.
Amid these efforts, the disputed presidential elections in Venezuela in early 2013, triggered an alarm about the fragility of subsidies from the South American country, which has made the order of the day, with no possibility of retreat, the urgent need to deepen reforms already begun.
However, both the first measures implemented, like the most recent, occurring in the absence of a civil society with the capacity to influence them, has determined that the subject of the changes is the same that came to power in 1959. Given its prolonged duration, it has interests to defend and is responsible for everything that has happened, good or bad; a characteristic that prevents it from acting as might a movement that comes to power for the first time. For this reason the scope, direction, speed and pace of the changes have responded to the conservation of power.
Immersed in contradiction of advancing without structural reforms, the Government is facing the huge obstacle signified by the mismatches that have occurred in the social system for decades. Among these is the damaging effect of the disproportionate relationship between wages and the cost of living, as reflected in the prevailing corruption.
Read wages should at least be sufficient for the subsistence of workers and their families. This means that the minimum wage must provide a living, while incomes below that limit mark the “poverty line.” Since 1989, when a Cuban peso was worth almost nine times what it is worth now, the growth rate of wages began to be less than the rate of increase in prices, which explains why, despite increases in nominal wages, purchasing power has decreased to the point that wages are insufficient to survive.
With the average individual monthly salary, around 460 pesos (less than 20 CUC, which is less than $20), one can not cover basic needs. A study of two family units, one of them consisting of two people and the other of three, showed that the first family earns 800 pesos and spends 2391, almost three times more than its income; while the three-person family earns 1976 pesos and spends 4198, more than double what they take in.
The first family survives through remittances sent by a son who lives in the United States, while the second will not declare how they make up the difference. This disproportion is the main cause that, given the loss of the purchasing power of wages, the Cuban family dedicates itself massively to seeking alternative sources of income to survive, in most cases through activities outside the law.
Because it can only distribute what is produced, the government faces a complex contradiction. Cubans, unmotivated by salaries unrelated to the cost of living, are not willing to produce, and without increased production living conditions cannot improve.
The solution is not ideological calls for the people to step up, but to recognize the state as the main cause of the anomaly and so to decentralize the economy, allowing the formation of a middle class, freeing up everything that slows the increase in production, and even making possible the unification of the two currencies which would permit wage reform.
All this implies deepening the reforms to make them comprehensive in nature, including, of course, the restoration of civil liberties, something that so far the government has refused to do.
From Diario de Cuba
1 August 2013