Showing posts with label layoff. Show all posts
Showing posts with label layoff. Show all posts

Tuesday, October 11, 2011

Cubans Escaping Castro's Economic "Reforms"

Cubans continue to "vote" against the Cuban regime

The number of Cubans intercepted at sea trying to reach the coast of Florida more than doubled in the last fiscal year according to figures released by the Department of Homeland Security. In the previous fiscal year, 422 Cubans were intercepted at sea by the Coast Guard, while in the fiscal year 2011 (which just ended on September 30th), 1,000 Cubans were caught. Moreover, the number of Cubans who actually reached the U.S. shore increased by 70%, from 409 in fiscal year 2010 to 696 in fiscal year 2011. This is the first rise in illegal Cuban immigration by sea in 3 years according to authorities.

This is yet another sign that the much heralded economic “reforms” announced by Havana aren’t working. The massive layoffs of hundreds of thousands of public employees undertaken by the government of Raúl Castro were meant to be absorbed by Cuba’s almost non-existent private sector. The Communist regime tried to ease the pressure by allowing private employment in 178 economic activities, such as masseurs, clowns, shoemakers, locksmiths, and gardeners. However, as I warned over a year ago, it capped the number of permits for these private activities at 250,000 while also penalizing the new entrepreneurs with stiff tax rates. It doesn’t take a Nobel Prize winner in economics to realize that Cuba’s nascent private sector wouldn’t be able to make room for all of the newly unemployed. What then for these people?

Earlier this year I talked to an official from the U.S. Interest Section in Havana who told me that we shouldn’t be surprised if we see a steady increase of Cubans trying to escape the island towards the United States. Faced with a dilapidated economy, hundreds of thousands of unemployed, and growing social unrest, the Castro regime wouldn’t hesitate in letting more Cubans use the “escape valve” of emigration. We might be seeing the first signs of this.

by Juan Carlos Hidalgo

Source: Cato@ Liberty


  • Go to Home Page
  • Monday, May 2, 2011

    AP Report on Cuba's May Day Reads Mostly Like Castro Propaganda Piece

    Where are the changes? Photo Courtesy of Gonzalo Obes.

    The guess here is Associated Press writers Peter Orsi and Andrea Rodriguez believe their May Day dispatch from Cuba represents an example of objectivity and insightful analysis. Anyone with knowledge of how a country under the iron grip of a five-decade Communist dictatorship really operates would beg to differ.

    The AP pair leaves readers with the impression that although Cubans are impatient to learn the details of the economic changes the government has passed but not revealed, they are generally supportive of whatever improvements might occur -- as if anyone in the island nation is really free to speak their mind.

    Readers might be able to determine for themselves that a decidedly unfree situation exists, but Orsi and Rodriguez ignored a Radio Marti report (translated here by Google's translator, and probably more accurately here by Babalu Blog) that the government launched a wave of repression in advance of May Day to ensure that there would be no disruption of its planned events. The AP pair only needed to cite the report without endorsing it; that they wouldn't even do this betrays either ignorance or a willingness to let readers believe completely unsupported assertions about potential improvement in a country that is the third most economically repressive regime on earth according to the Heritage Foundation's 2011 Index of Economic Freedom. Of the countries evaluated, only Zimbabwe and North Korea were worse.

    Here are selected paragraphs from Orsi's and Rodriguez's report (numbered tags are mine):
    Cubans mark May Day, await details of change

    Hundreds of thousands of Cubans marched through Havana and other cities on Sunday to mark May Day in a demonstration touted as a vast show of support for economic changes recently approved by the Communist Party - even though the people holding placards and shouting slogans haven't seen the details yet. [1]

    Nearly two weeks after the party endorsed President Raul Castro's bet to fix the island's broken economy through limited free-market reforms, the government has not released specifics of the 311-point guidelines, or said when it will do so.

    The parade, always a big event on the communist-run island, has nevertheless been touted by the official party newspaper, Granma, as "the best chance for Cuban workers to ratify ... their backing for the accords." [2]

    ... Still, many in Havana said they were impatient to see the actual details of the changes.

    "I would like to know what the guidelines have that's new, because so far it seems to be a lot of noise and nothing concrete," said Manuel Pedrosi, 56, who was just a small boy when Fidel and Raul Castro's revolution succeeded in 1959. "But if we've waited 50 years, we can wait a little longer."

    The economic measures approved unanimously and en bloc at a party summit April 19 include potential blockbusters that would open a door in the island's tightly controlled economic system, such as legalizing the buying and selling of private property and providing bank credit to finance small businesses. [3]

    ... While Cubans have generally welcomed the economic overhaul, some expressed impatience with the lack of clarity. Some say they are anxious to go into business for themselves or buy a home big enough to accommodate their family, but are waiting to see the ground rules.

    Others are nervous about plans - shelved for the time being - to lay off hundreds of thousands of state workers, and to gradually phase out the ration book, which provides Cubans with a basic basket of food at greatly subsidized prices. [4]

    "This can't wait. Everyone is going to benefit in one way or another because there will be a little more freedom to do as you like with what's yours," said Yordanka Rodriguez, a 45-year-old Havana resident. "We just have to see what the terms are like. Until that happens, it's hard to judge accurately." [5]
    Notes:
    • [1] -- Omitted, as reported by Radio Marti: The government planned to "transport thousands of Cubans to the "Plaza of the Revoution" to celebrate the International Day of Workers." It would appear that the people aren't sufficiently fired up about the situation to come out and "celebrate" without "encouragement."
    • [2] -- So that's how it works. The government buses in "celebrants," and, voila (or, in Spanish, "como si por magia, or "as if by magic), their presence represents endorsement of laws they know nothing about.
    • [3] -- Given that they haven't seen it, it's interesting that the AP reporters seem to be able to describe what's in it. If they can't, they should have written that "the economic measures ... potentially include blockbusters" instead of claiming that they "include potential blockbusters." As to private property, Orsi himself reported on April 27 that "(Raul Castro) drew a line in the Caribbean sand as to which reforms should remain, telling party luminaries that he had rejected dozens of suggested reforms that would have allowed the concentration of property in private hands." I would welcome an explanation from Mr. Orsi as to how one can "buy and sell" private property without "accumulating" it.
    • [4] -- Context, guys. An item posted by Bush administration Commerce Secretary Carlos M. Gutierrez notes that, "Today, the average Cuban lives on $20 a month and relies on government ration cards" (calling this "living" is a stretch).
    • [5] -- This strained quote is the final paragraph of the report. Unless he is a party insider, Mr. Yordanko Rodriguez can't possibly know that "everyone is going to benefit" or "that there will be a little more freedom." But despite the lack of any evidence, less experienced readers will come away from the AP report believing that this is the case.
    Interesting. That last point echoes the reporting about Obamacare just over a year ago.

    By Tom Blumer

    Source: NewsBusters


  • Go to Home Page
  • Monday, December 20, 2010

    Panic, anger as Cuba plans to lay off 1 of every 10 workers


    Cuba’s draconian plan to lay off 10 percent of its workforce is running into a slew of problems — not the least of which are the growing fights over who will wind up on the street.

    Cuban and foreign economists say it’s too much, too fast.

    Radical leftists are branding Raúl Castro as a capitalist exploiter of workers and – in an odd alignment with Cuban dissidents – are urging workers to fight the job cuts.

    One well-known historian and Communist Party member has warned of social chaos, maybe even a mass exodus, and cautioned that the layoffs may be unconstitutional.

    Workers desperately trying to keep their jobs are accusing others of corruption. And some blacks and women are warning that those sectors may be hardest hit by the job cuts.

    Almost no one doubts the job cuts are necessary in a country where the government pays the salaries of 85 percent of the workers – many of them in little more than make-work jobs. Castro has admitted the state payrolls are padded with more than one million surplus workers.

    In his most significant reforms since he succeeded brother Fidel in 2008, Castro is laying off 500,000 workers by April and is expected to cut another 500,000 to 800,000 in three years.

    He’s also cutting back other public spending and subsidies, and allowing an expansion of the private business sector in hopes that at least 250,000 of the newly laid off workers will be able to support themselves.

    Some Cubans say they are not overly concerned by the job cuts because Castro has promised that no worker “will be left unprotected.’’ The island will eventually muddle through the crisis, they say.

    Others say the country is awash in fear, especially among the bureaucrats, administrators, elderly, academics and recent university graduates seen as most likely to be left jobless.

    “The entire country is afraid. Fear of who’ll be out of work.

    Fear of how you’re going to buy food or something for the kids,’’ said Evelina, a Havana mother of two teenagers. “That’s what people are talking about, every minute, in every place.’’

    But the problems with the job cuts extend far beyond the fear. Dissident Havana economist Oscar Espinosa Chepe said he does not doubt the layoffs are needed, but argued that Castro is doing it the wrong way.

    “He’s doing in a very abrupt, very brutal way, without first creating the proper conditions’’ by waiting until the private sector had begun expanding, Espinosa said by telephone from Havana.

    “They got it ‘bass-ackwards’. They are laying off first and hoping and praying that the small private sector is going to expand enough to absorb them,’’ said Archibald Ritter, a professor at Carleton University in Ottawa who specializes in the Cuban economy.

    Former Cuban Deputy Labor Minister Lázaro González Rodríguez wrote in a recent Internet column that while the job cuts are needed, ‘‘what I can’t agree with are the methods, ways and time frame.’’

    The organization of labor at most state agencies and enterprises have not been studied for years, González argued, so the decisions on how many employees will be laid off at each workplace “are not the result of a technical study.”

    JOB IS A RIGHT

    Article 45 of the Cuban constitution also says that a job “in socialist society is a right, a duty and an honor,’’ he added. A group of Afro-Cubans, the Cofradía de la Negritud, in a Sept. 22 declaration urged blacks who believe they are to be dismissed for racial reasons to “not accept this passively and be ready to defend their labor rights.’’

    Cuban women also have warned against discriminating against them in the layoffs, with one writer noting that women hold 80 percent of the administrative jobs – a sector singled out for deep cutbacks.

    And a group of dissident lawyers, the Corriente Agramontista, issued a set of guidelines this month explaining the rights of workers to appeal their layoffs and if denied, challenge them in court.

    Even the leftist International League of Workers, active mostly in Latin America, blasted the layoffs as “a classic capitalist plan’’ and added: “The true defense of socialism in Cuba today means supporting the workers against this plan and ...demanding the right to strike.’’

    Castro has promised that the process of selecting those who will keep their jobs will be done not on the basis of seniority but “with strict observance of the principle of suitability.’’

    But his government has taken a somewhat hands-off approach to the process, apparently to distance itself from some of the pain of the cutbacks.

    The layoffs were first announced by the communist-run Confederation of Cuban Workers (CTC), the island’s lone labor union. And the initial recommendations on who goes are made in each workplace by a Committee of Experts made up of one administrator, one CTC official and either three or five workers chosen by fellow employees.

    Final decisions are made by higher-level supervisors. The government has not revealed how many workers have been laid off so far, though the cutbacks were to have started Oct. 4.

    But the committees already have sparked intense tensions, especially in government agencies and enterprises with access to goods that can be filched and sold on the black market.

    Miriam Celaya, a Havana woman who writes the blog Sin Evasion (Without Evasion), reported on Oct. 23 on a friend who works for a food-related state enterprise in Havana and now sits on its Committee of Experts.

    KICKBACK ECONOMY


    Workers at the enterprise used to happily kick back their meager salaries to supervisors in exchange for the chance to earn much more by stealing supplies and cheating customers, Celaya wrote, comparing the arrangement to a “Sicilian mafia.’’

    The scheme is not uncommon in tourist restaurants, where administrators claim that the state keeps all the profits so they need the workers’ salaries to maintain and upgrade the facilities, two Havana residents said.

    But now her friend “must decide, along with the other commissioners, which ones of these thieving associates [who, along with her, and just like her, cheat customers and bribe the bosses] ... remain as part of the gang’’ Celaya wrote.

    In another post, Celaya reported “pitched battles’’ between workers as the commissions consider who should keep their jobs.

    “These days anyone can be another’s executioner,’’ she added. “Why are they going to fire me and not that woman, who is corrupt ... And why me and not that guy, who’s always late? ...

    And of course they don’t fire that woman because she’s having an affair with the boss.’’

    Independent journalist Adolfo Pablo Borrazá wrote that at the Book Institute in Havana employees are denouncing co-workers “just to keep their jobs.’’ He added, “Even if it’s a good worker, it would be enough for someone to denounce a criticism of the government.’’

    Mutual accusations of corruption during committee sessions at a Havana hotel and José Martí International Airport already have sparked inquiries by prosecutors, according to reports circulating in Havana. The planned layoffs also have sparked warnings of unrest, even among government supporters like Pedro Campos, a historian, Communist Party member and former diplomat.

    “This could lead to unnecessary chaos, a social collapse, a massive and uncontrollable exodus,’’ declared a column signed by Campos “and other companeros’’ and published Sept. 27 on the Internet.

    But Cubans are more likely to accept the layoffs without complaints, wrote Havana blogger Elha Kovacs on her Internet page, Arma de Tinta – Ink Weapon. “In the long run people will use their personal resources and strategies for survival – and continue thinking about anything except changing the circumstances and conditions at the root of the dramatic scenario,’’ Kovacs added.

    Espinosa Chepe said the Castro government may even decide to lay off less than the targeted 500,000, or extend the March 31 deadline, once it realizes the magnitude of the problems ahead.

    “I have my doubts that this will go ahead as planned because there are no – none at all – conditions for it to succeed,’’ he said.

    By Juan O. Tamayo
     
    From: McClatchy

  • Go to Home Page
  • Saturday, October 23, 2010

    Cuba unveils new tax code for small business

    Will Cubans start to work for real?
    Cuba unveiled on Friday a new tax code it said was friendlier for small business, signaling authorities are serious about building a larger private sector within the state-dominated economy.

    The new system, outlined in the Communist Party daily Granma, greatly increases tax deductions, but also adds taxes and comes with a warning of stiffer enforcement of tax collection.

    It replaces a rudimentary tax code in place since 1994 when some self-employment was first authorized but then squeezed by severe regulation.

    The tax redesign comes as the government has begun slashing 500,000 workers from state payrolls and preparing to issue 250,000 self-employment licenses to create new jobs in President Raul Castro's biggest reform since taking office in 2008.

    He promised economic change when he replaced ailing older brother Fidel Castro and is pushing to boost productivity to help the Caribbean island's troubled economy.

    There were just 143,000 self-employed in 2009, according to official figures.

    The new tax system enables the self-employed to deduct up to 40 percent from income for the cost of supplies, compared to just 10 percent under the old one.

    Formerly, small businesses simply paid a graduated income tax. Now they will also have to pay a 10 percent sales tax and 25 percent social security tax, but both are deductible at the end of the year.

    Castro's reform permits the self-employed, for the first time, to hire workers. They will have to pay a 25 percent social security tax for each employee, which will also be deductible, and an undefined labor tax.

    ENFORCING SOCIALIST PHILOSOPHY
    The Granma story made clear that despite the development of a larger private sector, the government's socialist philosophy remains in place and the labor tax is a way of enforcing it.

    "This tax is regulatory in character to avoid concentrations of wealth and indiscriminate use of labor," Granma said.

    "The more labor hired the more severe the tax," it said, without providing details.

    The Granma story warned that those who are illegally self-employed must obtain a license and said tax scofflaws would face legal action.

    "Those who continue working on their own without papers, or do not pay the required taxes, will feel the weight of the law imposed upon them by those mandated to enforce it, the National Tax Office," it said.

    Cuba expert Phil Peters at the Lexington Institute in Arlington, Virginia said the new code is an attempt to simplify taxes for small businesses and make sure those taxes are paid.

    "My bet is that the sector will grow substantially, but only time will tell how big a tax burden this will be and how many entrepreneurs will be able to live with it," he told Reuters.

    The government, which took power in put in a 1959 revolution headed by Fidel Castro, controls about 90 percent of the Cuban economy.

    Most small businesses remained in private hands until 1968 when they were all nationalized, down to the shoe shine shops.

    The reforms, announced last month, turn back the clock to some degree on the sweeping nationalization.

    Along with being able to hire employees, the self-employed will for the first time be able to do business with the state, open bank accounts, receive credits and rent space.

    The goal of these changes, Granma said in a story last month, was to "distance ourselves from those conceptions that condemned self-employment almost to extinction and stigmatized those who decided to join it, legally, in the 1990's."

    At present, more than 85 percent of the Cuban labor force, or over 5 million people, works for the state, many in unproductive jobs. The government has said it ultimately plans to cut a total of one million state workers, or 20 percent, from state payrolls.

    Along with private sector development, many state-owned retail operations will be converted to employee-run cooperatives and leasing arrangements the government said.

    From: Tcob1

  • Go to Home Page