Cuba Labor Market

The reforms that have been implemented over the last ten years have created major changes in the labor market. Previously, all Cubans through the state were guaranteed a job and an income, even though it was low. Now, the state has laid off hundreds of thousands of public employees at the same time as a new sector has emerged with self-employed and private employees.

The reform policy abolished the hitherto almost sacred principle of equal pay for all, regardless of work, and the state-owned enterprises were called upon to give skilled workers higher wages than others. President Raúl Castro also made clear that the large surplus of public sector workers would be eliminated. According to Castro’s plans, one million government employees would be laid off and unprofitable companies began to be closed down. The idea was that the small businesses that started to emerge as a result of the reforms would absorb the surplus from the public sector. Both sole proprietorships and private cooperatives were given the right to hire others.

According to official figures, 580,000 Cubans are now estimated to be employed in the private sector, and perhaps twice as many have indirect employment as subcontractors to self-employed persons. However, the development on the private side has not kept pace with the slimming of the public sector, which has therefore slowed down.

Almost a fifth of those with a job work in agriculture and an equal share in industry. The rest, just over 60 percent, are in the service sector (administration, education, healthcare, trade and tourism).

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Cuba Population

Around 3 percent are unemployed according to official data, while at the same time employment is high in the state sector, that is, the employees have too little to do. Many Cubans support themselves in whole or in part in the so-called informal sector of the economy.

Unions have a weak position. Strict law does not exist and in the state sector it is the state that determines wages and working conditions. The trade unions mainly deal with social issues.

Wages remain low. Although the principle of equal pay for all was abolished, there were no resources to implement any major wage increases. The average salary for government employees is around SEK 250 a month. A doctor earns a hundred bucks more than the average salary. Miners also belong to those who earn a little more than others. The hotel and restaurant industry formally has the lowest wages, but those employed in the tourism sector are often the country’s real high-income earners. Cleaners at hotels as well as restaurant employees can in a few days receive tips equivalent to a monthly salary. Private entrepreneurs also have the opportunity to earn much more than the average salary. The growing income gaps are worrying about the government that has now cut open the possibility of starting private companies (see Current policy).

Sources for this text: Europa World Plus, Bertelsmann Stiftung, Union to Union, AFP



2.3 percent (2019)

Youth Unemployment

5.5 percent (2019)



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Cuba Labor Market