35% of Cuba’s Private Sector is Out of Work Due to the Covid-19 Crisis

The only alternative for private food service businesses is to prepare take-away. (14ymedio)

14ymedio bigger14ymedio, Havana, 12 May 2020 — The number of private sector workers who suspended their licenses (so as not to have to pay the taxes) is growing at an unbridled rate, 60% in a few weeks, from 139,000 to 222,723 affected, according to official data.

In mid-April, 22% of self-employed workers had lost their source of income. Now, 35% of the 632,950 of Cubans holding licenses to work for themselves before the start of the Covid-19 pandemic are in this situation.

On Monday, the Minister of Labor and Social Security, Marta Elena Feitó Cabrera, and her colleague in the Transport Ministry, Eduardo Rodríguez Dávila, appeared on the Roundtable show on Cuban television, where they presented new data on the repercussions of the coronavirus in their areas.

Feitó Cabrera explained that 39,127 state workers of the 138,638 temporarily laid off, called “interrupts” by the government, have been reassigned, which means that almost 100,000 have not found another alternative.

Those who accepted a different position have been sent mainly to activities such as food production, isolation centers, filling Public Health vacancies, health research and care for vulnerable people, elderly living alone and people with disabilities.

“We have 93,660 workers collecting a guaranteed salary, while 5,851 are not because they did not accept a job offer,” he added.

The minister explained that among the salary coverage that is offered in Cuba is the social guarantee, which the entity pays in certain circumstances when the worker is not working, as in the case of “interruptions” or other measures adopted during this time. “The same cannot be earned when one works as when one does not, regardless of the cause,” he argued.

On the other hand, he made reference to social protection, a type of aid “related to social assistance and offered when income is insufficient to cover basic needs.”

In the state sector, 58% of the three million employees continue to do in-person work, the majority, 74% belong to public companies and the remaining 26% to bureaucratic functions. The salary difference between employees in one area and another has been, according to the minister, one of the main difficulties for reassignments.

Officials received a pay raise last year after decades of stagnant wages and now earn more money than company workers. “We know that 60% of the salary of the companies’ scale is not the same as this figure among those budgeted,” admitted Feitó, who assured that there will be an equalization when circumstances allow it, although, on the other hand, he justified the difference remembering benefits previously granted to company workers.

“The average salary increased from 524 [Cuban] pesos in 2013 to 891 at the end of 2019. For its part, the payment for the distribution of profits exceeds 1,500 pesos on average and there is also the payment of 13 CUC [Cuban convertible pesos] in some companies as a bonus,” he argued.

Although private workers have been warning about their precarious situation for a long time, since if they do not agree to relocate to the state sector they do not have any coverage for work stoppages unless they belong to a vulnerable sector, the minister defended that they are protected.

“The first thing that was done was to adapt the service to current conditions. An example of this is that both landlords and those who provide bar services can sell take-out food. There is another group of self-employed workers who have readjusted their activity and are engages in production to address the Covid-19 pandemic with excellent results. It is an experience that we must promote to achieve the linkages between the state and non-state sector,” he said.

In addition, those who had to cancel their licenses have been able to postpone the taxes. “Those who have most embraced this measure are contracted workers, cargo and passenger carriers, landlords, those linked to food services in the cafés and beauty services,” he explained.

Although 600,038 people work remotely, a hitherto residual method of work in Cuba, which has had to grow up forced by the pandemic, many others need to continue going to their jobs.  Data was provided on the Roundtable show by the Minister of Transport, who said 300,000 people are being transported daily instead of the usual six million. Even discounting those who work from home, and as public transport is limited to essential workers, the data reveals an unprecedented crisis in the country.


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