A changing role for Cuba’s unions in the new economy

Guest Blogger: Larry Kuehn: Director, BCTF International Solidarity Program – one of CoDev’s Canadian Partners.

The Cuban government announced last year that 500,000 workers currently employed by the state—approximately 10 percent of the Cuban workforce—will lose those jobs over the next several months. Cuban president, Raul Castro, has acknowledged that the current system is not working and that the country must increase its productivity if it is to meet the expectations of the Cuban people.

So how is it decided who will lose their jobs? And how are these folks expected to find a way to support themselves in the new Cuban economy? What will be the effect on the education system?

Those are questions we had when Steve Stewart from CoDevelopment Canada and I met with Diosdada Vidal, international secretary, and two other representatives of the Cuban teachers’ union (SNTECD) in September 2011.

Why changes are happening is not hard to understand. Cuba has limited sources of foreign currency—Canadian tourists being one of the larger ones—but imports 70 percent of its food. That is down from about 90 percent when the Soviet Union existed and bought sugar at a premium. It needs to grow more of its own food if it is to satisfy its people.

Cuba has lots of potentially productive agricultural land—historically much of it used to grow sugar cane and tobacco. Demand for these products has dropped, but the land is still good for growing—it just needs farmers and a focus on food crops.

Credit: Diane Moran

Education may be a part of the problem. Everywhere, as people gain education, they leave the farms and don’t want to go back. Just recently, the population of cities, globally, has grown to be larger than that of rural areas. In Cuba, everyone is entitled to a free education at all levels and the country is among the top performers in global educational comparisons.

Over the past twenty years, urban organic farming has expanded rapidly, as one sees in fields and massive greenhouses around Havana. It is organic farming of necessity—Cuba can’t afford the high levels of fuel and chemical fertilizers used in other countries.

However, the expansion of farming has not been enough. The government is encouraging those losing their state jobs to form co-ops in agriculture as one of the reforms—with the state providing land. And the government is assisting workers in small industries such as construction to form workers’ collectives of people with trades, as an experiment with this form of organization.

Impact on education of reducing state employment

Cuba devotes 10% of GDP to education, more than twice that of most other countries, and the union that represents teachers is the largest in the country. Reducing state employment by more than 10% would require that at least some of this come from the education system. And, indeed, some of it will.

The three women executive members from the SNTECD told us that assurances had been given that no teachers or scientists (they are in the same union) would lose their jobs. The job losses at schools will fall entirely on support staff and administrators—“We don’t need so many bosses,” one of the union folks remarked.

The story of downsizing has a somewhat familiar ring to it. The aim is to “reposition,” not lay off people, for them to change positions if necessary, and to reduce by attrition. If a person’s job is considered redundant, a different job in their school or elsewhere in the municipality will be offered if available. When an offer is made, the worker has five days to accept or reject it.

If the individual does not accept the new job, they are laid off and paid unemployment payments. This provides full pay for the first month and up to five additional months at 60% of pay.

When the positions to be eliminated have been determined, it is a school committee that decides who will go. The committee includes a school administrator, a school union representative, and usually three employees elected at a workers’ assembly. If more staff are determined to be qualified for the remaining positions than exist, then these are the workers eligible to be transferred elsewhere.

Decisions about individuals are to be based on their “productivity,” not on age or seniority. Efficiency is now the basis on which decisions are supposed to be made.

Private small business requires changes in the law and…taxes

The labour laws have not been based on self-employment or running businesses that employ others. Encouraging small business has required a new labour law that was adopted a few months ago. The unions are proposing some further changes to correct some of the concerns.

And Cubans, we were told, have no culture of paying taxes. Since everyone was an employee of the state there was no taxation of income. The reality is that an underground economy has been in place for some time—people with cars, for example, operating them as taxis. In education, teachers could moonlight as tutors to increase their income, although charging for tutoring was outside the law. Workers in the tourist industries earned tips, usually in the dollar-equivalent currency that is worth more than 20 times the domestic peso.

By legalizing private employment, the state creates the conditions to gain revenue from taxation. The new small businesses and co-ops, along with the existing underground or informal businesses, will be taxed through payroll taxes.

New roles for the unions

Union representatives from around the country met on a September weekend talking about how to organize in the new private sector. Union membership is voluntary, so the unions need to find a way to reach and sign up the potential members—much more difficult than when the potential members are all in one workplace—as anyone who has tried to organize in the service sector in other countries knows from experience. The advantage of joining the union for even a single person running the new businesses is access to benefits and pensions.

The teachers’ union is signing up people who run small, private family daycares as well as people who work as tutors (not those employed by the state as teachers). The union is pursuing a couple of issues on behalf of the women running the family daycares. Many of them do not have any training specific to daycare and they would like to have an early childhood education program. Also, running a legal daycare requires paying a monthly licensing fee to the government. During the summer holidays, many of the children do not go to daycare, so the operators want the state to suspend fee collection during those months and the union is a collective voice through which to pursue their objective.

The unions also have a role in the process of deciding who is to go and who is to stay as jobs are cut. A union representative at the school is to be part of the committee that evaluates the workers, as previously mentioned. The union is also charged with ensuring the transparency of the process—that legitimate evaluations, not personal favouritism, determine the outcome. Individuals who feel that the process has not been fair can initiate a grievance.

How far will the changes go?

The union representatives said that the changes reflect experience that shows that central planning does not work for small businesses, and these changes are being made to protect the positive aspects of the Cuban system. Leaving small enterprise to the self-employed, workers’ collectives, and small businesses, the SNTECD reps told us, will allow the state to better focus on running the large state industries and services. I heard the Cuban ambassador to Canada say recently that Cuba will not go the route of China—meaning, I think, that it will not abandon socialism for rapacious capitalism while still claiming to be Communist.

One Response to A changing role for Cuba’s unions in the new economy

  1. Roberto Garcia says:

    What Cuba really needs is to unleash its productive force allowing the micro and small business to develop as an important part ot the wealthy generation. Taxation is OK but it could not mean a new barrier for the private business sector development.They could try to promote not to imposse the cooperative model, not just in the rural areas but in the urban areas as well.

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