Cuba has announced it will slash 1 million state jobs and push self-employment and some small business, in a gamble it hopes can keep its system and economy afloat.
Workers laid off from government jobs will no longer be sent home with partial pay, but will have to find other means to make a living, the Cuban Worker’s Central (CTC) warned, adding more than 500,000 public sector jobs will be eliminated, in a first cut, by next March.
“Our state neither can nor should continue maintaining companies ... with inflated payrolls, and losses that are a drag on the economy, are counterproductive, generate bad habits and deform worker’s performance,” the CTC said.
Cuban President Raul Castro said last year the government wanted to relocate more than 1 million state employees, sending shockwaves through a society used to more than 50 years of broad state employment stability. Cuba has a workforce of 4.9 million people in a country of 11.2 million. The state controls 95 percent of the economy.
For years, the government has given laid off workers up to 60 percent of their salary.
But the CTC said “it will no longer be possible to indefinitely protect or subsidize workers income.”
The government is expected to hand out 250,000 permits in some 120 different types of small business and is encouraging household appliances repairmen, cobblers, watch repairmen, hairdressers, herb vendors, mechanics, gardeners, massage therapists and translators among others to apply, say documents circulating in workplaces.
Workers typically will pay a license fee and sometimes rent. The government is hoping the emerging private sector can absorb workers but many analysts have their doubts.
Still, Yvonne Molina, 27, who recently received a permit to open a small seamstress business in her garage in downtown Havana, was hopeful.
Molina said she hopes to earn significantly more than the meager wages the government pays.
“Every month I pay 300 pesos (US$11) for my license and I earned 250 pesos in one week. I’ve always fixed clothes,” she told reporters. “I used to do it illegally. Now I can make dresses, sell them and earn a living with no fear that I will be fined.”