Labor rights and the private sector
Employment policy in Cuba is part of the country’s social policy, and as such, has tried to maintain full employment, even under adverse economic conditions. However, public policies are also accompanied by unwanted impacts that are difficult to foresee. Full employment in Cuba has resulted in high rates of underemployment and over-employment, with a negative impact on wage levels. In the long term, this has overshadowed the good intentions to protect working people. These elements combined have affected productivity, worker motivation and their sense of belonging.
The Cuban State operated as an almost exclusive employer in the Cuban economy until the crisis of the 1990s forced its reduction. Reality imposed the adoption of new forms of property to improve the living conditions of the Cuban people and promote economic activities necessary for our national market, which the state cannot and does not have to assume. Recently, since 2016, the private sector has absorbed more than 400,000 workers from the half million that were laid off from the state sector. Despite this, Cuba continues to be, essentially, a country of government employees.
Source: Based on statistics provided by ONEI – Cuba’s National Statistics Office (2013, 2016, 2019)
Cuban workers’ access to non-state-owned sectors, mostly with better wages, is limited. Nationally in the private sector specifically labor distortions can also be profound. Some of them must be corrected simultaneously to the necessary adjustments in this sector, so that it reaches its maximum capacity. The Law for Businesses would lay the foundations by granting rights to SMEs (self-employment), and at the same time establish an appropriate legal framework for them to fulfill their duties as organizations with a legal personality.
Some issues should be highlighted. Many types of organizations, properties and companies can be implemented in Cuba (for example, cooperatives, social service entities, and non-profit organizations). Also, size matters. Self-employed statistics will not disappear. Self-employed workers — owners of their small personal or family business who do not hire a workforce — require legislation that protects them. These self-employed workers cannot be compared to owners of bars, hostels, restaurants or businesses that have invested tens of thousands of dollars in their operation and hire external workforces.
The list of activities that are authorized limits the participation of vulnerable groups of the population in this market. The diversification of these activities is imposed as a measure of social homogenization and economic need. The activities authorized today contemplate mainly specialties of low added value, and carried out by men. On the one hand, this has slowed down the insertion of SMEs into the national productive framework. On the other, it has hindered the participation of women and professionals of all genders in a sector which is better compensated than the state’s. Professionals who have found gaps in the established legal regulations to legally exercise their profession face unnecessary legal, personal and professional risks. Giving up careers in pursuit of economic improvement implies underutilization of a skilled workforce, and compromising individual aspirations to sustain a dignified life and to fulfill oneself professionally.
There are many reasons that explain why female insertion in SMEs has occurred more slowly — from their work at home as caregivers to their limited opportunities to accumulate capital as a result of that same historical role. Women are more likely to sacrifice their professional and financial well-being for family reproduction. The growth of single-parent households headed by women, and the low salary level in the state sector of the economy where they are concentrated, affects their incorporation into a more competitive labor market. If we add authorized activities, the opportunities are further reduced, unless women decide to give up their professional careers, as many have done, to improve their household income.
The deficiencies of the official statistics on self-employment hinder its study. For example, by not differentiating an owner from his/her employees, it camouflages them both under the self-employed category. The danger that this entails goes beyond the national statistics, since the relationship of employer-employee subordination is invisible, and the lack of worker protection this entails for employees. It is not a matter of demonizing the Cuban small- and medium-sized businessman, but of enforcing the established labor legislation to protect the inalienable rights of Cubans.
So what rights are we referring to?
The Labor Code regulates all the rights and duties of Cuban workers, regardless of the sector to which they belong. The deregulation of working hours, which reach and can even exceed 12 hours a day for more than five days a week, have become the norm for some SMEs. There is no union pressure, since in the Cuban private sector there are no such organizations, created precisely to protect workers from situations of vulnerability. If we add the weakness of the unions in the state sector of the economy, we will be faced with an inescapable reality: the mass organizations must be rethought in the new context and demand the strict fulfillment of their functions.
Cuba would have to review and adapt its current legislation for cases of labor lawsuits dealing with breaches of contracts, or any other legal reason that may arise. In addition, how many Cubans work in SMEs without contracts? When there is no contract, or even if it exists but you’re not bound by it, the employee is subject to a legal limbo that keeps them in a precarious job situation. Since pay and material conditions are often better than in the state sector, workers submit to sometimes inhumane conditions of hours, pace of work, and personal humiliation, to retain their jobs.
Unfortunately, when legislation is rigorously implemented, more veiled forms of discrimination will have to be addressed. Despite the fact that Article 2 of the Labor Code prohibits discrimination “on the basis of skin color, gender, religious beliefs, sexual orientation, territorial origin, disability and any other harmful distinction to human dignity,” these forms of discriminations have been visibly manifested in the private sector of the economy. It is enough to analyze advertising for jobs in the Cuban classifieds that require “white complexion” in order to be hired. Numerous employers have confessed to me, for example, that they would rather not hire young women because later on “they get pregnant and things get complicated.”
Cuba’s Law for Businesses and the opening of the activities authorized to be carried out privately, the expansion of the types of property and a proper, harmonious and balanced insertion of the private sector into the national economy, will not offer an immediate answer to all these questions. But they are essential steps to gradually correct the distortions in this labor market.
