Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Economic disruption of mass layoffs in Cuba could lead to exodus

Workers prepare food at a cafeteria in Havana on Tuesday. The island leaders expect many more of the 500,000 laid-off workers to move to private sector jobs, including raising rabbits, painting buildings, making bricks and collecting garbage.

Associated Press

Workers prepare food at a cafeteria in Havana on Tuesday. The island leaders expect many more of the 500,000 laid-off workers to move to private sector jobs, including raising rabbits, painting buildings, making bricks and collecting garbage.

The Cuban government's announcement Monday that it intended to slash 500,000 government jobs — 10 percent of the island's entire workforce — sent a clear signal that the communist nation intends to accelerate the growth of its minuscule private sector. Unemployed workers will be encouraged to find jobs raising rabbits, making bricks, painting buildings and collecting garbage, according to an internal government document. Johannes Werner, editor of the Cuba Standard news website, has observed Cuba's hesitant steps toward economic reform for 12 years. He assesses the implications of the layoffs, which have already begun and are expected to continue through March.

Can Cuba's private sector absorb these new workers?

I don't expect co-op owned retailers, family restaurants, bed and breakfasts, taxis, and car repair shops to absorb 500,000 people. Agriculture has some potential — in fact, co-ops and private farming have already absorbed some 50,000 people recently, through long-term leases of state land for private farmers.

That said, the most obvious chance for the newly unemployed in the short- and mid-term will be to find another state job.

The announcement says state companies and institutions will continue to hire in the oil sector, construction, biotech, teaching, police and industry. People doing these hard or highly skilled jobs have been woefully underpaid. That's why these are all sectors with pronounced labor shortages. Now that there is an excess labor force, these state companies likely will begin to see an influx, which will increase as performance pay is becoming the norm.

Will Cuba encourage more foreign investment to create jobs for these workers?

The expanding space for private business in Cuba is likely not going to open additional space for foreign investors. The standard 49-51 joint venture arrangement between foreign investors and the Cuban government will continue.

More than anything, a resurgence of foreign investment will depend on the global economic climate and on new regulations, such as for foreign real estate ownership.

What does this mean for the U.S. economic embargo?

The failure of U.S. sanctions has been obvious, but it's a domestic political issue. I would be very surprised if the entrenched embargo-and-vengeance industry in Miami and Washington would suddenly stop finding fault with Cuba. Even with Cuba's economic opening, there's little domestic incentive for the Democratic leadership — in terms of power, popularity or campaign contributions — to move that little island up on their agenda.

If this economic overhaul doesn't work, should we expect a mass exodus from the island?

It's hard to say what will happen. The outlines of economic reform seem to satisfy both the pragmatics (more space for private business) as well as leftist critics in Cuba (collectivization and more workplace democracy via co-ops). It also seems the government continues to prioritize health care and education in their spending, while continuing some subsidies for food and housing. That should give the government broad backing and some leeway should the reform hit serious bumps.

The biggest resistance will come from an entrenched bureaucracy. It remains to be seen whether inflated ministries will also be reduced in size.

Doubtless, the transition means a massive disruption. And any substantial disruption of the economic structure — look at Puerto Rico in the 1960s and '70s, Mexico in the 1980s and '90s, Dominican Republic in the 1990s — inevitably produces mass emigration. The question is how Cuba and the United States will channel the migratory pressure.

Bill Duryea can be reached at or (727) 893-8770.

To read Johannes Werner's monthly column in Business on Cuban economic and political news, go to

Economic disruption of mass layoffs in Cuba could lead to exodus 09/14/10 [Last modified: Wednesday, September 15, 2010 7:50am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Pinellas licensing board asks Sen. Jack Latvala for $500,000 loan

    Local Government

    The troubled Pinellas County agency that regulates contractors wants Sen. Jack Latvala to help it get a $500,000 lifeline from the state to stay afloat.

    State Sen . Jack Latvala, R- Clearwater, is being asked to help the Pinellas County Construction Licensing Board get $500,000 from the state so it can stay open beyond February.  [SCOTT KEELER   |   Times]
  2. FHP: 55-year-old pedestrian struck, killed by car in Largo


    LARGO — A 55-year-old St. Petersburg man died late Saturday after he walked into the path of a car on Ulmerton Road, according to the Florida Highway Patrol.

  3. Study offers warning for Florida strawberry farmers from global warming


    LAKELAND — Florida strawberry growers already have experienced a dress rehearsal for the impacts of climate change during the past two seasons.

     Carl Grooms shows off some of his strawberries at Fancy Farms near Plant City Tuesday, Feb. 17, 2015.  Grooms, President of Fancy Farms. [JAMES BORCHUCK  |  Times]
  4. Two Interstate 275 tractor-trailer crashes cause delays in Tampa


    TAMPA — Two tractor-trailers driving in opposite directions on Interstate 275 crashed Sunday within a mile of each other, causing lane closures on both sides for much of the morning.

    Two tractor-trailers going opposite directions on Interstate 275 in Tampa crashed Sunday morning, closing lanes on each side, according to the Florida Highway Patrol. [Florida Highway Patrol]
  5. Read Anthony Scaramucci's old tweets. You'll understand why he deleted them


    New White House communications director Anthony Scaramucci hasn't always shared the political views of the administration he now serves.

    Anthony Scaramucci, incoming White House communications director, takes questions as he speaks in the briefing room at the White House on Friday. [ Washington Post photo by by Jabin Botsford]