Poverty and (un)Protection in the Cuban “Conjuncture”

In 1990, during the closing of the V Congress of the Federation of Cuban Women, then-President Fidel Castro said: “We must be prepared for the worst circumstances (…) The general principle (…) I want you to know is that, at the very least, what we have will be distributed among all.” There was applause in the room, and probably in many Cuban households—it was a welcomed announcement that confronting the crisis would be egalitarian and cooperative. To date, Cuba had been a fairly egalitarian country (Gini coefficient of 0.24) and with low poverty rates (6.6% of the population).[1]

The government then did not implement a neoliberal package of adjustments, as many of the countries in crisis in the region had already done. Social protection circuits and equality zones (universal public health and education systems, basic food basket, pensions, etc.) were maintained. The State did not lose its role as coordinator, although it did deploy, de facto and without it being a formal program, strategies to cope with the crisis that modified the widening gaps in access to income and resources. Both poverty and the inequality index rose radically.

An important part of the strategies that allowed for daily life until that moment stopped working. The role of the state in ensuring well-being diminished. There was a profound heterogenization of society in terms of labor markets, income, and life support mechanisms. Resource redistribution policies and social protections also changed, sometimes in a protectionist sense and sometimes with unequal consequences. There were also changes to family and demographic formats, to external emigration processes and remittances, and to internal migration patterns. The commercial and financial blockade that the US government has deployed since 1962 to the present intensified. This shaped the available (im)possibilities to face the crisis.

The socio-class structure was transformed during the 90s, and the profile for poverty and/or at risk of suffering was consolidated and continues today: women in general; single mothers and/or heads of household, or with dependents in charge; the elderly living alone without family support; Black and mestizo populations; state workers with low-skilled occupations; internal migrants in precarious settlements; and stationary rural workers.[2] The crisis that began in the 90s has evolved along with others of a different nature and affect the island today.

“The Conjuncture”

In 2010, the country’s situation was not that of the 90s, but there was still a crisis. The following year, the Economic and Social Policy Guidelines were created, debated, and approved. In 2011, the political leadership affirmed, in the style of the egalitarian narrative, that “in Cuba, no one would be left helpless.” In 2019 the situation was worse than in 2011 and former President Raúl Castro affirmed that although it would not be the same as in the 90s, “the situation could get worse.”

Since the beginning of 2020, the COVID-19 pandemic has made everything worse. The Tarea Ordenamiento (“Organizing Task” or “OT”) policy was implemented in this context, which adopted some of the Guideline’s economic reforms, and proposed new ones. It produced the monetary and exchange unification of the two currencies that until then were operative in the country. The policy hoped to alleviate the distortions of the national economy and avoid asphyxiation from the United States. With the prior experience of the 90s, the decade between the Lineamientos (“Guidelines”) to the OT defines the Cuban “conjuncture,” during which political leaders have continued to affirm that no one would be left helpless.

The question of helplessness does only belong to the grammar of institutional politics. It is also used in the language of the social sciences, which has classified poverty in Cuba as “poverty with protection.” Thus, attention was drawn to the existence of social policies that protect impoverished groups, the framework of equality and social justice that continues to operate, and the persistence equality zones. As the crisis erodes life support, deepens uncertainty, and transforms social protection policies, the “poverty with protection” framework would have to be revised.

There are no recent official data on poverty in Cuba. The latest figure is from the early 2000s and reported 20% urban poverty.[3] More recently, the report on Cuba referring to the implementation of the 2030 agenda argued that the poverty line, unsatisfied basic needs, or fixed daily amounts in USD measurements are invalid because the different levels of monetary income do not deprive access to basic services, many of which are universal and free or subsidized. This makes another type of calculation more feasible. In 2020, a multidimensional poverty incidence of 0.4 percent of the population was estimated.[4]

This analysis reveals areas of truth, but obscures others. Indeed, there are social policies in Cuba that are not directly dependent on income, such as health and education, but their use increasingly depends on family income. For example, taking advantage of the same health and education policies depends on the ability to: reach schools or hospitals if one lives far away from them; secure appropriate clothing and shoes; school snacks and lunches; food to complement what is offered at hospitals; or even buying increasingly scarce medicines. At the same time, over the last three decades there has been an increase in the commercialization of access to basic needs due to the reduction of subsidies, the increase in the cost of public services of electricity, water, etc. and, in general, the cost of living. For these reasons, sufficient income is imperative. Its absence implies the risk of impoverishment and the worsening of poverty where it is already installed. At the same time, there has been a general deterioration in social policies and a deterioration in real wages.

Anaya and García (2018) show that families that depended on an average salary or an average salary and pension in 2016 would not be able to afford the basic expenses to sustain their life. Using prices from that year as references, and incorporating the consumption of foods such as vegetables, fruits, dairy products and edible fats, a family of three would need more than two salaries to cover their basic expenses. After analyzing the economic reform process, these authors concluded that “a considerable part of state employees have seen the purchasing power of their salaries systematically deteriorate,” and the same for those who receive pensions.[5]

The fall in real capacity of the state average salary and average pension, despite its nominal rise, has been fundamental during the reform. Between 2007 and 2019, salaries increased 1.9 times, though that did not mean the same for everyone. There were important variations depending on the sector of the economy, the business and budgeted sectors, and also between the provinces: the eastern provinces, and especially Guantanamo, have the lowest average salary. In addition, the wage policy continues without responding to consumer needs since the national currency has only reduced its purchasing power and the price of the basic basket has risen. If in the 1980s state wages represented 80% of income, in 2016 they represented approximately 46%,[6] and 71% of a household’s income would have to be dedicated to food.[7] The result has been a decrease in individual and family income.

During the OT, a new salary reform was created which based its calculation for the minimum salary on the Basket of Reference Goods and Services. In dissonance with official calculations and considering variables such as the cost of shortages, economists have calculated that in order to satisfy basic needs, the minimum wage should have been increased 11 times and that, to cushion the new prices, the average growth of wages should have been 8.42 times greater, at least. However, salaries grew 9.6 times in the business sector and 3.9 times in the budgeted one. The OT is further reducing the purchasing power of state wages, a process that started before its implementation.[8] For this reason, the risk of impoverishment or the intensity of poverty of those who are already in this condition increases.

But the foregoing must be analyzed in relation to another matter: diversifying income sources. The heterogenization of the labor markets has had an important weight in this,[9] which has changed the employment map in several ways: a) a drastic decrease, of 10 percentage points, in the economic activity rate in the decade from the Guidelines to the OT, b) a decrease in state employment by more than 1 million workers; c) the growth of Self-Employed Work (TCP) that welcomed part but not all of the workforce that left the state sector; d) due to all of the above, probable growth of the informal labor sector, although there are no official figures on this; e) a probable increase in real unemployment, which had already grown in the last decade and affected women more;[10] and f) a probable loss of own income for many people.

The pandemic, which has been both conditioned by and has conditioned the OT, has also changed the world of employment. Those who participate in the state sector (about 70% of the Economically Active Population) have been the subject of protective policies,[11] but the private sector has dramatically narrowed due to the decline in tourism and, in general, the loss of income for individuals and families. In February 2021, 45.5% of all people with licenses in the private sector had suspended them. It is likely that a significant part of them have been hired as contract workers, an activity which mainly engages women in the sector. An important part of those who are employed in the TCP have lost their income, do not have unemployment insurance, and today live on savings or have joined an informal sector that could also be precarious because shortages continue escalating. Both state and private employment in this situation is scarce and insufficient. Those at risk of poverty could qualify for social assistance, but it has narrowed considerably during the long “conjuncture” period.

During more than a decade of reforms, social spending has decreased proportionally with respect to the state budget and the Gross Domestic Product. For impoverished groups, the State continues to implement monetary and non-monetary protection programs.[12] However, there is evidence of a reduction in Social Assistance expenses. Between 2006 and 2018, budget spending allocated to social assistance contracted two percentage points (from 2.2% to 0.3%), while the number of assistance beneficiaries as a proportion of the population decreased by almost four points (from 5.3% to 1.6%).[13]

During the pandemic and OT, as of April 2020, protection measures such as temporary monetary benefits for social assistance were implemented for people aged 65 and for family nuclei or people considered vulnerable, but they have been highly insufficient. Social assistance pensions are extremely low and are far from ensuring a basic basket of goods and services. Pensions have further lost their value.

The risk of impoverishment and worsening poverty escalate if we consider the segmentation of the supply of basic products that has come with the OT and the pandemic. Among the first measures implemented in mid-July 2020 were the elimination of the USD tax and the opening of foreign currency stores for those who had access to them, mainly through remittances or other means. Those that began as establishments for the sale of medium and high-end products, have become stores of basic necessities that are not available or are very scarce in national currency markets. Sustaining life is, at least in part, at the expense of the availability of foreign currency.

In June 2021, a new measure was implemented. While this measure is supposed to be temporary, it prevents cash deposits of USD in national banks to recharge cards with foreign currency, which is the only way to buy in these establishments. This, together with the fact that the channels for sending remittances have been considerably restricted due to the United States government’s financial blockade of Cuba, have once again disrupted family planning.

The situation described above increases the risk of impoverishment or the exacerbation of poverty and reaffirms the poverty profile that was commented before:

1. Women in general, who continue to be less likely to participate in labor markets: by 2020 almost one in two women did not have a formal job in the country. One of the determining factors of this may be the gender divide within employment that continues to make them responsible for the maintenance of households, carrying out more unpaid domestic and care work in the face of the shortage of care services for minors, the elderly, the sickly, or those who are disabled or with special needs.
2. Women previously employed in the private sector, most of whom were or are hired and may be at greater risk of poverty due to the crisis when they lost their jobs.
3. Women heads of households, who have grown in number in recent years and will continue to do so. In 2012, only 39.17% of female heads of household had a job. Currently, this number could be higher and have more precariousness.
4. Women in rural areas, who have low labor ties: they are 46.3% of the rural population and 26.1% of the economically active rural population[14] and often carry out domestic work without renumeration.[15]
5. Trans people, one of the most precarious groups, have extremely low rates of labor participation, a high presence in the sex work sector and are subject to discrimination and social and economic exclusion.
6. Pensioners. The nominal increases in pensions in recent years, including during the OT, have not dampened the loss of purchasing power of pensions or the decrease in the average pension / average salary correlation, which is more serious in the eastern provinces, where the average salary is lower.[16]
7. Elderly people without income. National surveys and qualitative studies have shown this group lacking in income, especially those who do not receive remittances. Linked to this are their mobility difficulties (access to homes on upper floors without a lift, etc.), the state of their homes and the lack of access to basic services such as drinking water (31% of elderly people who live alone have a deficit in this service, for example) are other elements that affect the precariousness of this group.[17]
8. Internal migrants. Above all, those who are in an irregular situation or have high degrees of precariousness from the point of view of housing and economic resources and who are overrepresented within the at risk/impoverished population. In addition, internal migration in Cuba is largely feminine, and this leads to a greater possibility of informal work without rights. They maintain high degrees of dependency as they must send remittances and consumer goods to family members that reside in their places of origin.[18]
9. Black and mestizo people, who are overrepresented in impoverished groups and suffer inequalities that are expressed in the socio-labor structure (little presence in the emerging private sector, especially the one with high profitability, for example), economic income alternatives (less access to remittances) and in the occupation of urban space and housing (worse housing conditions).[19] In addition, a correlation between skin color, gender, and heads of household has been proven, which reinforces the impoverishment of Black and mestizo heads of households. They are also more likely to have teenage pregnancies. Black and mestizo women, as well as women from the eastern region, generally experience greater disadvantages.

The current crisis situation, during a pandemic and with the OT in place, increases the risk of impoverishment, especially, though not exclusively, for these groups. Therefore, the commitment to comprehensive, real, and effective justice needs to be at the center of the agenda. However, the political conversation seems to be heading more insistently in other directions and consolidating a turn that analysts have verified in recent years: from a state-centric and non-mercantile welfare regime, to a family-oriented one with greater market space, where people are increasingly dependent on families and their earning capacity. The conversation about poverty and sustaining life, without euphemisms, needs to be repositioned at the center of politics.

Ailynn Torres Santana is a postdoctoral researcher with the International Research Group on Authoritarianism and Counter-Strategies (IRGAC) of the Rosa Luxemburg Foundation, a visiting researcher at the Freie Universität Berlin, and an associate researcher at FLASCO Ecuador. She has been associate professor at Universidad de la Habana (2006-2012) and visiting professor at Freie Universität Berlin (2021), FLACSO Ecuador (2016-2018, 2020), Universidad de Barcelona (2015, 2018) and the University of Massachusetts Amherst (2018). In 2019 she was a visiting researcher at Harvard University. Her research interests include feminist movements, inequality, and citizenship in Latin America. She is editor of the books Derechos en riesgo en América Latina: 11 estudios sobre grupos neoconservadores (Quito/ Bogotá: Fundación Rosa Luxemburgo/Desde Abajo, 2020) and Los cuidados: del centro de la vida al centro de la política (Santiago: FES, 2021). She is author of many books chapters and academic papers. She is a member of the editorial boards of Cuban Studies (Harvard University) and Sin Permiso (Barcelona). Her personal web is: atorressantana.com.

Illustration by Maikel Martínez Pupo. You can find him @MaikelStudio @maikelmartinezpupo.

[1] Andrew Zimbalist y Claes Brundenius (1989) “Crecimiento con equidad en una perspectiva comparada”, in Cuadernos de Nuestra América No 1

[2] Peña, Á. (2017) “Regímenes de bienestar en Cuba: Notas para una discusión.” In Debates actuales sobre política social: Cuba en el contexto de América Latina y el Caribe, compiled by María del Carmen Zabala, 142–158. La Habana: FLACSO-Cuba/Fundación Friedrich Ebert.

[3] Ferriol, Á. (2004), “Política social y desarrollo”, Política social y reformas estructurales: Cuba a principios del siglo XXI (LC/L.2091), E. Álvarez y J. Mattar (eds.), México D.F., Economic Comission for Latin America and the Caribbean (CEPAL). Published by the United Nations.

[4] The calculation is from 2017 and takes into consideration the following variables: nutrition, child mortality, years of schooling, assistance in school, gas for cooking, sanitation, drinking water, electricity, housing, and assets.

[5] Anaya, B. y García, A.E. (2018) “Gastos básicos de las familias cubanas urbanas dependientes de salarios y pensiones: dinámica reciente”, in Anaya, B. y Díaz, I., Econonía Cubana, entre cambios y desafíos, Center for the Study of the Cuban Economy / Friedrich Ebert Foundation / Cuban Institute of Cultural Research Juan Mrainello, Havana.

[6] Echevarría, D. (2021) “Dimensión social del desarrollo humano local: empleo y salarios”, en PNUD/CIEM, Informe Nacional de Desarrollo Humano – Cuba 2019. Ascenso a la raíz. La perspectiva local del desarrollo humano en Cuba, PNUD/CIEM, Havana.

[7] Taking as a reference the consumption of 3,524 per day. Anaya, B. y García, A.E., op.cit.

[8] Echevarría, op.cit.

[9] Remittances also influence the heterogenization of sources of income.

[10] Echeverría, op.cit.

[11] Salary protections for state workers, mothers who are state workers with children, job relocations with salary protections, unpaid licenses, etc.

[12] For example: “National program for community social services for late adults,” “Social work program for mother with children with severe disabilities,” “Program for social attention and integration in the community for people with disabilities,” “Programs for children with social disadvantages.”

[13] Mesa-Lago, C. (2020) “Impacto del envejecimiento en la protección social en Cuba”, in Acosta, E., Crisis de cuidados. Envejecimiento y políticas de bienestar en Cuba, Sergio Arboleda University, School of Politics and International Relations, Bogotá.

[14] Lara, T. (2021) “La equidad de género. Avances y desafíos”, in PNUD/CIEM, op.cit.

[15] Hidalgo, V. y León, R. (2021) “Familia, trabajo y ruralidad en el contexto cubano: Configuraciones y realidades”, in Estudios del Desarrollo Social: Cuba y América Latina, Vol. 9, No. 1, January-April.

[16] Munster, B. (2021) “Dimensión social del desarrollo humano local”, en PNUD/CIEM, op.cit.

[17] Acosta, E. y Baquero, S.A. (2020) “Radiografía del envejecimiento poblacional en Cuba: desigualdades acumuladas y nuevas vulnerabilidades”, en Acosta, op.cit.

[18] Hidalgo, V. y León, R., op.cit.

[19] Zabala, M.C. (2021) “Los estudios de las desigualdades por color de la piel en Cuba: 2008- 2018”, in Estudios del Desarrollo Social: Cuba y América Latina, Vol. 9, No. 1, January-April.