Cuban Officials Say Equal Pay May Not Work, Dropping Wage Limits Could Help

The egalitarian wage system Fidel Castro spent decades building in Cuba is no longer viable, plagued by low pay, corruption and waste that can be eased by paying workers more for better work, a top labor official said in an interview published Wednesday.

Carlos Mateu, a vice minister of labor and social security, said many government companies have already eliminated caps on salaries for productive workers and the rest must do so by August.

The article in the Communist Party daily Granma contained few direct quotes from Mateu, a practice common in official Cuban media. But it said Mateu "underscored that there has been a tendency for everyone to get the same, and that egalitarianism is not convenient."

"That is something we have to resolve," Granma said, adding that the traditional Cuban pay system saps employees' incentives to excel since everyone earns the same regardless of performance.

That is "unfair because if it's harmful to give a worker less than he deserves, it's also harmful to give him what he doesn't deserve," the article said.

Mateu said the new compensation system fits with the mantra of "socialist distribution" often mentioned by new President Raul Castro: "From each according to his ability, to each according to his work."

That's meant to distinguish the current system from Cuba's ideological goal, Karl Marx's formula of communism: "From each according to his ability, to each according to his need."

The vice minister was unavailable for further comment Wednesday, and a Labor Ministry official said she was not authorized to provide more information.

Details of the new system were not revealed. It is not clear if officials plan to pay higher regular salaries for better workers, or if they would just receive bonuses for good performance.

Mateu told Granma that while ordinary workers will no longer be subject to wage limits, managers will be limited to a 30 percent increase if the team working under them increases production.

The government controls more than 90 percent of the economy, and while most Cubans get free housing, education, health care and subsidized food rations, the average salary is just 408 Cuban pesos — US$19.50 a month.

An end to wage caps could eventually lead to a true middle class, since it would potentially allow Cubans to openly accumulate wealth. But it runs counter to the notion of an egalitarian society that ailing, 81-year-old Fidel Castro promoted throughout his 49 years in power.

Since succeeding his elder brother in February, Raul Castro has dropped much-despised bans that prohibited most Cubans from obtaining cell phones in their own names, renting cars, staying in luxury hotels and buying computers, DVD players and other devices.

He has also made it easier for thousands of state employees to get title for homes they once rented for work, and moved to overhaul the floundering, state-run agricultural sector, making it easier for private farmers to tend unused government land so as to increase food production.