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Cuba's Equal Wage System Is No Longer Workable, Labor Official Says

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By WILL WEISSERT

The Associated Press

Published: June 12, 2008

HAVANA - The egalitarian wage system former President Fidel Castro spent decades building in Cuba is no longer viable, plagued by low pay, corruption and waste that can be eased by paying workers more for better work, a top labor official said in an interview published Wednesday.

Carlos Mateu, a vice minister of labor and social security, said many government companies have eliminated caps on salaries for productive workers and the rest must do so by August.

An end to wage caps could eventually lead to a true middle class by allowing Cubans to openly accumulate wealth, but it runs counter to the notion of an egalitarian society that ailing Castro, 81, promoted in his 49 years in power.

The article in the Communist Party daily Granma contained few direct quotes from Mateu, a practice common in official Cuban media. However, it said that Mateu "underscored that there has been a tendency for everyone to get the same, and that egalitarianism is not convenient."

"That is something we have to resolve," Granma reported, adding that the traditional Cuban pay system saps employees' incentives to excel since everyone earns the same regardless of performance. That is "unfair because if it's harmful to give a worker less than he deserves, it's also harmful to give him what he doesn't deserve," the article said.

The government controls more than 90 percent of the economy. Although most Cubans get free housing, education, health care and subsidized food rations, the average monthly pay is 408 Cuban pesos, or $19.50 in U.S. currency.

After the collapse of its chief backer, the Soviet Union, hit Cuba's economy in the early 1990s, Cuba allowed foreign tourism and some market-oriented reforms. However, Castro made clear he made the reforms reluctantly. Once the economy recovered, he rolled back many openings.

Mateu said the new compensation system fits with the mantra of "socialist distribution" often mentioned by new President Raul Castro.

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