Cuba's government may have more than one million excess employees on payroll, Castro says

That's more than one million unproductive workers, out of what official Cuban figures show is a total of 4.9 million people working in formal jobs in a country of 11.2 million people.

And that's part of the explanation, several economists said, for a calamitously over-centralized and unproductive economy that, for example, forces a tropical island to import an estimated 60 percent of the food its people consume. The Cuban government has historically insisted on keeping people officially employed, even in unproductive jobs. Unemployment was last reported at 1.6 percent by the National Statistics Office (ONE).

About 95 percent of the jobs in Cuba's formal sector are with the government — ministries, their agencies and enterprises — though salaries are so low, averaging about $20 a month, nationwide, that many Cubans also have off-the-books work to make ends meet.

But the figures on excess jobs in the government and its enterprises mentioned by Raúl Castro surprised even some Cuban economists.

"We know there's an excess of hundreds of thousands of workers in the budgeted and enterprise sectors (and) some analysts calculate that the excess of jobs is more than one million,' he said Sunday in a speech to the Cuban Communist Youth.

There are "inflated payrolls, very inflated payrolls, terribly inflated payrolls,' Castro said before adding a reassurance: "The revolution will not forsake anyone. I will fight to create the conditions so that all Cubans have honorable jobs.'

It was not the first time that Cuban officials have publicly acknowledged the government has far too many employees.

The commerce and restaurant sectors alone in Cienfuegos, Cuba's smallest province, have 1,400 too many employees, according to a recent report in the newspaper Trabajadores, run by the government-controlled Cuban Confederation of Workers (CTC).

The province's education sector also is overstaffed by 1,025, and the sports sector by 500, the newspaper added, quoting Marlén Jiménez, a provincial official of the CTC.

'INHUMANE FORMULAS'

What's more, public health facilities like hospitals and clinics in eastern Granma province alone have 3,000 unnecessary employees, the newspaper quoted Luis Muñoz, a member of the CTC's provincial secretariat, as saying.

"All will remain in their jobs, but depending on the possibilities many will be reassigned to useful and productive jobs,' the newspaper noted. "Cuba will never resort to the easy and inhumane formulas of neoliberalism, based on massive dismissals.'

Gary Maybarduk, who served as counselor for political and economic affairs at the U.S. diplomatic mission in Havana from 1997-1999, said Castro's comments indicate that he's aware of the massive problems facing an economy battered by the global crisis, three hurricanes and its own massive inefficiencies.

"The government is beginning to recognize its problems, but isn't ready to do anything about it yet because it has neither the capital nor the ability to create significant numbers of new jobs,' he said.

"It indicates an incapacity to generate productive jobs that is Olympian, Guiness Book of Records,' said Jorge Sanguinetty, former president of the Association for the Study of the Cuban Economy. "But that's been the Cuban government's problem since 1962.'

"And that's why underemployment is ridiculously high there,' said Archibald Ritter, a professor at Carleton University in Ottawa who specializes in the Cuban economy.

Many day-care centers and even some two-star hotels in Cuba have their own nurses and doctors — not on call, but full time — Ritter said in a telephone interview.

What's more, when the government shut down more than 70 sugar mills beginning in 2002, their 100,000 employees kept 40 percent of their salaries while they trained for other jobs, said Jesús "Marzo' Fernandez, a former top Cuba government economist now in Miami.

LIQUIDITY CRISIS

Fernandez added that while he was initially surprised by Castro's one-million figure, it made sense in light of recent reports that some Cuban enterprises have shut down because of the lack of foreign supplies needed for production.

Cuba has severely cut back imports in the past year because of a liquidity crisis sparked by drops in its main sources of hard currency — remittances, nickel exports and tourism. Maybarduk noted that Cuba's own statistics show that employment in the "communal, social and personal sector' — not further defined — rose from 951,000 in 2000 to 2.1 million in 2008.

"This appears to be the government soaking up all the people out there who were not in formal-sector jobs, maybe working in the black market,' he said.

Sanguinetty said the island's government has always kept as many people as possible on official salaries — in part to be able to proudly report very low unemployment figures, in part to keep an eye on them.

"Fidel (Castro) always wanted to have people at work, to control them,' said Sanguinetty. "They don't want people on the streets, so they sacrifice economic efficiency for political efficiency.'

Though Raúl Castro told the young communists that no one would be left without a job, he also made it clear that the economic crisis Cuba faces these days requires sharp cutbacks in government spending.

"To continue spending beyond the income means eating our future,' he said, "and putting at risk the survival of the revolution.'