Salaries and Productivity: the CornerstoneAugust 16, 2012 | | Print |
HAVANA TIMES – The principle of increasing productivity as a prerequisite for increasing people’s wages seems irrefutable, from an economic standpoint. However, it’s not something pleasing to those Cubans who are forced to “inventar” (invent) to make ends meet.
But even when one accepts this principle as valid, many wonder why salaries are not being increased for those people working in sectors that are already productive, some of which have produced tremendous economic returns for years.
Highly productive low-paid doctors
Public health care, for example, provides the greatest portion of the foreign exchange that comes into the country. The combined revenue from 2 million tourists and the remittances from 1.5 million immigrants are less than the earnings obtained by the government from doctors working overseas.
Though one couldn’t ask for more productivity from this sector, the wages of its workers continue to be inadequate for them to live on. Patients know this, so when they come for their appointments they often bring a gift – from a cup of freshly brewed coffee or a snack to a whole pig.
Some doctors who have served on missions abroad complain that now the government is refusing to pay them their compensation of $50 USD per month, which apparently had been promised before sending them to work for two years away from their families.
The official Granma newspaper published an article with the costs of health care so that citizens know what they are receiving as their “social wage.” It’s a good idea, but it could also say how much is paid to a physician for each of these consultations.
They work hard, carry out on-call shifts, participate in foreign aid missions and in this way bring in millions to the government. So why don’t they get wage increases? Why are they being treated the same as unproductive sectors?
Cigar growers too
But these aren’t the only workers in that situation. Recently I went exploring in the Santo Tomas cave, the largest in Cuba, located in Pinar del Rio Province. Along the way I visited a bohio (hut) without electricity. They didn’t even have a refrigerator for preserving their food or keeping water cool.
The woman of the house is the buyer for a cigar company in the area. All year round she controls the planting and care of the crop, and after the harvest she decides on the quality and price. She earns only $18 a month, despite of the enormous profits for the country.
Small farmers are also very productive. Very little is invested in them and yet their output is much higher than state-run farms. But the campesinos were not the ones who created those farms. An absurd distribution system was imposed and the administrators over this industry were appointed, thanks to which they continue to lose crops of rice, tomatoes or bananas – according to complaints in the Granma newspaper.
A new model and motto
Because of all this, many Cubans feel that it’s an injustice that the workers are the ones who have to suffer with their low wages. They believe the low productivity is the government’s fault, which is the entity that created the mechanisms and promotes inept and inefficient administrators.
One Cuban economist told me that when analyzing a company’s lack of productivity, what should be identified is whether it’s the fault of the employees, the poor performance of their supervisors and managers or because the model doesn’t allow them to produce.
An accountant at one of the hotels with the highest occupancy rates in the capital explained to me that his company is “unproductive” because they turn over their hard-currency CUC earnings to government and they are exchanged for national currency pesos at a rate of 1:1 (one dollar for one peso), when the real exchange rate should be 1:24 (one dollar for 24 pesos).
It is up to the government to free up the productive forces from the corset-like model that doesn’t let the economy breathe. It would also help with production and services being promoted by the authorities if they were to think in terms of professional suitability and not just political reliability.
As the model ends up being “adjusted,” they could pay better wages in sectors that are productive, such as with doctors and tobacco growers. They would not have to be afraid of inequality because this would certainly become an incentive to others.
A few years ago the government decided that social justice shouldn’t be based on citizens receiving equal incomes, but on them having “truly equal opportunities” – while ensuring that the poorest have the basics to live as human beings.
That is the cornerstone around which a nation could be built.
(*) An authorized Havana Times translation of the original published by BBC Mundo.