Yes, you read the headline correctly. Cuba has an emerging middle class. And it continues to grow and prosper. It may even be the factor that most affects a transition from a socialist state to a more open, democratic society.
A new report released by the Brookings Institution, Soft Landing in Cuba? Emerging Entrepreneurs and Middle Classes, confirms that any way you cut it, almost “40 percent of the islands occupied labor force (totaling 5.01 million in 2011) would fall within the middle class.” Richard Feinberg, the author, suggests that this expansion of the self-employed workers, coupled with the greater economic openings that took place once Raul Castro took over as head of state, all point to a potentially positive basis for political transition.
As Feinberg put it, “the old narrative – that Fidel and Raul Castro had to pass from the scene before real change could occur – has been discredited by these current trends.”
The rebirth of private business
The rebirth of private business took place in 2008. Raul Castro made a pragmatic decision to enlarge the private sector as a way to absorb a bloated public sector, and also a way to reach disaffected youth.
Private sector employees, “trabajadores cuenta propia” or TCPs are now permitted to work 201 types of jobs that qualify for government licenses. Municipal authorities issue the licenses. Among the authorized categories are such standard positions as barber or locksmith, but there are also more humorous ones like “operator of children’s fund wagon pulled by pony or goat,” to “habaneras” (women posing in colonial attire).
There is also a robust informal sector of repairmen and vendors who do not want to deal with government licenses or tax collectors. While they run the risk of getting shut down, the resiliency of these workers is clear as this sector continues to attract workers every day. Together with the TCP group they represent a large swath of the employed workers in the country.
State owned enterprises (SOE), the main form of competition to these new workers, are also being granted more autonomy from ministries. Today the government acts more as a holding company. In 2014 the report notes that SOEs will be allowed to retain up to 50 percent of their profits, and set some investment priorities and wage rates. This is a far cry from the old Communist planned economy of the past.
Who is Cuba’s middle class?
Official Cuban statistics state that 1 million people already work in the private sector, or 20 percent of the employed ……
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