CUBA: Bringing Order to their Capitalism

On January 1, 2021, opportunists celebrated the 62nd anniversary of the so-called “Cuban revolution”, a reference of all the opportunist parties and movements that proclaim themselves socialist, but which are nothing more than a masquerade of the political alternatives that the bourgeoisie counts on to give continuity to capitalist exploitation.

On this occasion the bourgeois government of Cuba announced that “In accordance with the new economic context of the country as of January 1, 2021, the Ministry of Finance and Prices modified the wage scale of the country, setting the minimum wage at 2100 Cuban pesos”. Likewise, Miguel Díaz-Canel, Cuban president, announced that Cuba will unify its two current currencies, the Cuban peso (CUP) and the convertible peso (CUC), as of January 1, 2021: “It is considered that the conditions are created that allow announcing the beginning of the task as of January 1, 2021 with a single exchange rate of 24 Cuban pesos for one dollar”, said Díaz-Canel.

These announcements, long awaited and announced on television by Díaz-Canel, accompanied by the former president and leader of the “communist” party of Cuba, Raúl Castro, are part of a set of tasks indicated by the Cuban leadership, framed in the so-called “ordering task”. “We reiterate the transcendence and importance of this task that will put the country in better conditions to carry out the transformations demanded by the updating of our economic and social model on the basis of guaranteeing all Cubans the greatest equality of rights and opportunities”, Díaz-Canel declared.

In monetary matters, the “ordering task” consists of the disappearance of the CUC, created in 1994, and the establishment of a single exchange rate.

With these measures, the Cuban bourgeois government is sincere about the advance of the currency devaluation process and the existence of an inflationary process, like the one currently undergone by many capitalist countries. The fact that an apparently low initial exchange rate was established (24 pesos per dollar) will not prevent the rise of the inflationary wave and the exchange rate. In fact, after the government’s announcement, it was observed that in the black market it reached prices of up to 45 CUP or Cuban pesos per dollar.

Although the government has established that the population must make its cash transactions only in CUP (Cuban Pesos) and has opened the use of credit cards in dollars to those who receive remittances from relatives abroad, in practice it is imposing the payment in Dollars or Euros in cash, especially for all the services and needs of a foreign tourist; and it is in these market spaces where the real devaluation of the Cuban peso will prosper.

In correspondence with this monetary policy, the new salary scale or table was set, which has a minimum salary of 2,100 pesos (87.5 dollars at the official exchange rate and 46.67 dollars according to the street value). In the new wage tabulator the amount increases according to what the government determines as degrees of complexity of the work and according to the number of hours worked during the week. Thus, the 2,100 pesos apply to the complexity group I, but only if they work 44 hours per week; if the workers work 40 hours per week, their salary will be 1,910 pesos.

The occupations of service workers will be located from group I to VI (from 2100/ 2910 pesos to 2660/2415 pesos); those of administrative workers, from group III to VII (from 2300/2090, to 2810/2555 pesos); and operators, from group II to VIII (from 2200/2000, to 2960/2690 pesos). Obviously, most of the salaried population will fall between wage groups I and VI.

In the case of technical positions, they will be from group VII to XXV (from 2810/2555 pesos up to 6610/ 6010 pesos); and the cadre positions from group XVII to XXXII (from 4610/ 4190 up to 9510/ 8645 pesos).

Then there is a set of provisions for different specificities of work situations that complement the 32 salary groups.

But the task of the regulation is not only limited to establishing a single exchange rate and a wage scale. The Cuban government has announced the elimination of subsidies and the adjustment of prices. First, “the gradual elimination of excessive subsidies and undue gratuities”. “The policy is to subsidize people and not products, to avoid the egalitarianism that we sometimes have in society”. Secondly, “to maintain the salary as the main source to finance the consumption of workers and their families, and to eliminate salary distortions to stimulate the incorporation to employment and promotion to management positions”. In other words, the Cuban government abandons the control of prices of goods and services which, according to them, stimulated a supposed egalitarianism, and emphasizes what all workers know: that they only count on their salary to meet the cost of living. Of course, the government stated that the established minimum wage covers the cost of the reference basket of goods and services (CBSR=1,528 pesos). But what the government does not say is that with these economic measures the amount of the CBSR will move rapidly and will put the workers with a very weak salary to be able to cover their needs and those of their families. And in an environment of worker demobilization and repression, wage changes will continue to depend on centralized decisions by the Cuban government.

Like other opportunist governments, which declare themselves “left” and “socialist”, the Cuban government claims that this is not a neoliberal adjustment. But it is evident that the Cuban bourgeois government seeks to get ahead in the framework of the economic crisis, with a declining tourist sector, with the loss of economic support from Venezuela, with at least 40% of the state enterprises operating at a loss. The Cuban government is betting on increasing the opening to the world market, on giving viability to some merchandise export opportunities and on lowering the operating costs of transnationals setting up in Cuba, mainly labor costs, which is one of the cheapest in the region, surpassing only Venezuela’s salaries.

The demons of speculation, hoarding and shortage of goods are unleashed. The price of 80 grams of bread alone, which every Cuban receives through the rationing card, has multiplied 20 times since January. The 11.2 million resident Cubans receive that bread daily, whether they are communists or opponents, working or unemployed, at a price that used to be 5 cents Cuban pesos (CUP), a tiny cost if expressed in dollars. Now, as part of the economic adjustments announced by President Miguel Díaz-Canel, bread will cost one peso, or 4 cents, according to information published in the Official Gazette. The prices of basic services (water, gas, electricity, transportation), notary fees and taxes also increased.

One of the immediate consequences of these measures will be an estimated inflation of three digits, which has also been recognized by the Cuban government in its announcements.

In an attempt to contain an inflationary process, the prices of agricultural products will be regulated by the municipal and Havana provincial governments; but we know that these controls will fall at the mercy of market dynamics.

The minimum wage in Cuba went from 400 to 2,100 Cuban pesos (from 17 to 87 dollars). The average wage increase was 450% and 500% in the case of pensions.

But workers will be harassed by inflation and the fall in real wages, and in the street the dispute for the acquisition of dollars in cash will become more acute and it is expected that transactions in this currency for the acquisition of basic necessities will increase. The black market in foreign currency will have a “license to kill” and the salaried workers will be the main ones affected.

As in the entire capitalist world, Cuban wage policies are oriented to protect the profits of public and private businessmen. Although it is foreseeable that the Cuban government will implement new wage adjustments and apply some price control measures for some goods and services, the trend of falling real wages and growing unemployment will continue. In Cuba we will see the same anti-worker policies applied by different bourgeois governments around the world. We will also see the flexibilization of the workday, casual labor, hourly work, overtime work and all the labor modalities that allow the capitalists to economize on their wage payments. The Cuban government seeks to make Cuba attractive for transnational investment, at the cost of the over-exploitation of the workers.

Neither Cuban wage earners, nor wage earners around the world, should be fooled by this false socialism. Sooner rather than later, the Cuban proletariat must react by resuming its class struggle and united action for the improvement of its wages and working conditions, breaking with the calls for the defense of the “socialist homeland”.