Cuba to lay off 500,000 in 6 months, allow private jobs

By Shasta Darlington, CNN

September 13, 2010 -- Updated 1650 GMT (0050 HKT)

Cuban barbers, like this one working in Havana last month, became self-employed in April.

STORY HIGHLIGHTS

• Announcement speeds up timetable for layoffs
• Some Cubans worry, others look forward to opportunities
• Average state wage is $20 a month

RELATED TOPICS

• Cuba
• Raul Castro
• Economic Issues

Havana, Cuba (CNN) -- Cuban announced on Monday it would lay off "at least" half a million state workers over the next six months and simultaneously allow more jobs to be created in the private sector as the socialist economy struggles to get back on its feet.
The plan announced in state media confirms that President Raul Castro is following through on his pledge to shed some one million state jobs, a full fifth of the official workforce -- but in a shorter timeframe than initially anticipated.
"Our state cannot and should not continue maintaining companies, productive entities and services with inflated payrolls and losses that damage our economy and result counterproductive, create bad habits and distort workers' conduct," the CTC, Cuba's official labor union, said in newspapers.
Castro had announced layoffs in August, but said they would occur over the next five years.
At the time, he said the government "agreed to broaden the exercise of self employment and its use as another alternative for the employment of those excess workers."
The drastic and unprecedented economic changes have many Cubans worried that jobs they had long taken for granted under the Communist government will no longer be guaranteed.
Others are hopeful that they will have more freedom to set prices and earn more than the average state wage of $20 a month.
The state currently controls more than 90 percent of the economy, running everything from ice cream parlors and gas stations to factories and scientific laboratories. Traditionally independent professions, such as carpenters, plumbers and shoe repairmen, are also employed by the state.
State media on Monday did not give details about where private enterprise would be allowed to grow or which sectors would suffer layoffs, but did talk about which areas are still strategic.
"Within the state sector, it will only be possible to fill the jobs that are indispensable in areas where historically the labor force is insufficient, like agriculture, construction, teachers, police, industrial workers and others."
The announcement avoided the word "private," but said alternative forms of employment to be allowed included renting or borrowing state-owned facilities, cooperatives and self employment and that "hundreds of thousands of workers" would find jobs outside of the state sector over the next few years.
Castro has launched a few, small free-market reforms since taking over from his brother Fidel Castro in 2006.
In April, for example, barbershops were handed over to employees, who pay rent and tax but charge what they want. Licenses have also been granted to private taxis.

For a couple of years, fallow land in the countryside has been turned over to private farmers. The more they produce, the more they earn.