Why Cuban cab drivers earn more than doctors

Vox

26 Oct 201505:00

Summary

TLDRThis video script delves into the peculiarities of Cuba's socialist economy, where professionals like doctors and engineers earn less than taxi drivers due to state-set wages. Post-1959 revolution, the government nationalized businesses, dictating prices and salaries, leading to a stagnant private sector. Scenes from Havana highlight the inefficiency of state-run eateries with empty shelves and overstaffing. The 1990s saw a slow shift with private licenses, allowing some businesses to thrive. However, the system has led to a brain drain, with skilled workers opting for lower-skilled private sector jobs for higher pay. The average Cuban monthly salary is a meager $20, prompting many to seek additional income through an informal market just to survive. Despite recent economic reforms under Raul Castro, increasing private sector participation, many remain skeptical about significant change.

Takeaways

🚑 A taxi driver in Cuba can earn more in a day than a doctor earns in a month, highlighting the economic disparities.
🏭 Many professionals, including engineers, earn less than those in the service industry due to state-set wages.
🌟 The Cuban economy has been heavily influenced by the socialist revolution, leading to state control over businesses and wages.
🏠 Post-revolution, the state seized all private businesses and land, and set prices for all goods and services.
🍽️ State-owned restaurants and eateries often have empty shelves and are overstaffed, waiting for government food deliveries.
📉 The Cuban economy has been in decline since the collapse of the Soviet Union, which previously provided subsidies.
📉 Rationing is still in place, with Cubans using government ration cards to obtain basic necessities.
🔝 The Cuban government has started issuing private licenses since the 1990s, allowing for a small but growing private sector.
🚖 Private sector workers, like taxi drivers, can earn more because their salaries are not state-regulated and can charge higher prices to tourists.
🏥 Many highly trained professionals have left their fields for lower-skilled jobs in the private sector to earn a better living.
💼 The average Cuban monthly salary is $20, forcing people to find additional income through an informal market just to survive.

Q & A

What was the economic impact of the socialist revolution in Cuba in 1959?
-The socialist revolution led by Fidel Castro resulted in the government seizing almost all private businesses and land, with the state setting prices for everything and deciding how much people got paid. This led to the disappearance of the private sector overnight.
How did the Cuban economy survive after the socialist revolution?
-Cuba survived for many years with subsidies from the Soviet Union. However, after the Soviet Union's collapse, the economy has been getting worse every year.
What is the typical scene in a Cuban eatery according to the script?
-A typical scene in a Cuban eatery includes too many employees in an empty establishment with empty shelves, waiting for food deliveries from the government, and putting in their eight hours to go home.
How does the government's payment system affect the motivation of workers in Cuba?
-Workers in Cuba get paid the same whether they sell one plate of food or fifty, which implies a lack of incentive to work harder or more efficiently since their pay is not tied to performance.
What is the significance of government ration cards in Cuba?
-Government ration cards are used by Cubans to receive their monthly rations from storage houses. They have been a part of the Cuban system for decades and are an indicator of the state's control over the distribution of goods.
What changes did the Cuban government make in the 1990s regarding private enterprise?
-In the 1990s, the Cuban government started giving out private licenses, which fueled a small but growing private sector, allowing for some economic diversification.
How does the private restaurant experience differ from public ones in Havana?
-Private restaurants in Havana offer a different experience with actual movement and good service, as the owners have to sell good food to stay in business, unlike public establishments.
Why do taxi drivers in Cuba earn more than doctors?
-Taxi drivers in Cuba earn more than doctors because they have private licenses, and their salaries are not set by the state. They can charge tourists high prices, which allows them to earn significantly more.
What is the impact of the Cuban economic system on the professional choices of its citizens?
-The economic system in Cuba has led to highly trained workers leaving their professions to do remedial work in the private sector, such as engineers cooking in private restaurants or accountants driving taxis, as these jobs offer higher earnings.
How do Cubans supplement their official salary to survive?
-Cubans often engage in an informal market where they make additional income on top of their official salary, just to survive. This includes selling items like illegal popsicles or newspapers.
What recent changes have been made to the Cuban economy under Raul Castro's leadership?
-Since Raul Castro took over in 2008, the number of private licenses has increased significantly every year, and now 20% of the economy is private, indicating a slow but steady move towards economic reform.

Outlines

00:00

🚖 Cuban Economy: The Paradox of Earning More as a Taxi Driver

This paragraph introduces the peculiar economic situation in Cuba where a taxi driver earns more in a day than a doctor does in a month. It highlights the irony that despite being trained as an engineer, the narrator prefers driving a taxi due to the low wages for engineers. The script delves into the history of Cuba's economy post the 1959 socialist revolution, where the government nationalized all businesses and set wages, leading to the disappearance of the private sector. The current state of Cuban eateries is depicted, showing overstaffed yet empty establishments waiting for government food supplies, illustrating the inefficiency of the state-controlled model. The collapse of the Soviet Union, which previously subsidized Cuba, has worsened the economy. The government's rationing system is also mentioned, with citizens using ration cards for monthly food supplies.

Mindmap

Keywords

💡Socialist Revolution

The Socialist Revolution refers to a fundamental transformation of society where the means of production are owned and controlled collectively by the people, rather than by a select few. In the context of the video, the Cuban Revolution led by Fidel Castro in 1959 is highlighted, where the government seized private businesses and land, leading to a state-controlled economy. This is a central theme of the video, illustrating the historical backdrop against which the current economic conditions in Cuba are set.

💡State-controlled Economy

A state-controlled economy is one where the government has significant control over economic activities, including setting prices and determining wages. The video describes how, post-revolution, Cuba became a state-controlled economy where the government owned all businesses and set wages, leading to a situation where professionals like doctors and engineers were paid very low salaries compared to taxi drivers who could earn more in the private sector.

💡Private Sector

The private sector consists of businesses and industries that are privately owned and operated, as opposed to being state-controlled. The video script discusses the near disappearance of the private sector in Cuba after the revolution, but also highlights a resurgence with the government granting private licenses, allowing for a small but growing private sector. This is exemplified by the contrast between state-run eateries with empty shelves and private restaurants offering better service and food.

💡Rationing

Rationing is a system where the government controls the distribution and consumption of goods, typically due to scarcity. In the video, the script mentions the use of government ration cards that Cubans have relied on for decades to receive their monthly food rations, demonstrating the extent of state control over the distribution of essential goods and the impact on the daily lives of citizens.

💡Economic Reform

Economic reform refers to changes in economic policy or structure intended to improve economic performance. The video discusses the need for economic reform in Cuba, indicating that the current state-controlled system is not sustainable. The script notes that since Raul Castro took over, there has been an increase in private licenses, suggesting a move towards economic reform and a diversification of the economy.

💡Informal Market

The informal market consists of economic activities that are not regulated by the government or included in official economic statistics. The video describes an 'informal market' in Cuba where citizens engage in additional work or small-scale trade to supplement their official salaries, which are often insufficient to cover basic needs. This highlights the ingenuity and necessity for Cubans to survive within the constraints of a state-controlled economy.

💡Subsidies

Subsidies are financial assistance provided by one party, often a government, to support a particular industry or sector. The video script mentions that Cuba survived for many years with subsidies from the Soviet Union. The collapse of the Soviet Union led to the removal of these subsidies, which had a significant negative impact on the Cuban economy, as it had become reliant on this external support.

💡Private Licenses

Private licenses are permits granted by the government that allow individuals to operate businesses independently of state control. The video discusses how the Cuban government has started granting private licenses, leading to the growth of a private sector. This is exemplified by the taxi driver and the private restaurant owner who can set their own prices and earn more than those working in state-controlled jobs.

💡Brain Drain

Brain drain refers to the emigration of educated and skilled individuals from a country, typically due to better economic opportunities elsewhere. The video script illustrates brain drain in the context of Cuba, where professionals such as engineers, accountants, and nurses leave their fields to work in the private sector, such as driving taxis or running restaurants, due to the higher income potential.

💡Cuban Average Salary

The Cuban average salary refers to the typical monthly income of a Cuban citizen. The video script mentions that the average monthly salary in Cuba is $20, which is extremely low and forces many to seek additional income through the informal market or by leaving their professions for higher-paying jobs in the private sector. This figure is used to emphasize the economic struggles faced by the average Cuban and the need for economic reform.

💡Black Market

A black market is an illegal market where goods or services are traded outside of government regulation. While the video script does not explicitly mention a black market, it discusses the informal market where Cubans sell items like popsicles or newspapers to make additional income. This can be seen as a form of black market activity, albeit on a smaller scale and driven by necessity rather than profiteering.

Highlights

A doctor in Cuba makes about $40 a month, less than a taxi driver's daily earnings.

An engineer, despite his training, earns less than a doctor, leading him to prefer taxi driving.

Cuba's economy is characterized by state control over businesses and fixed wages since the 1959 socialist revolution.

The state sets prices and decides wages, leading to a lack of private sector and economic incentives.

The collapse of the Soviet Union's subsidies has worsened Cuba's economy annually.

Cubans rely on government ration cards for basic food supplies, indicating a controlled and scarce food market.

The 1990s saw the Cuban government granting private licenses, fostering a small private sector.

Private restaurants in Havana offer a stark contrast to public eateries with active service and better food quality.

Taxi drivers earn more than doctors due to private licenses and the ability to charge higher prices to tourists.

Highly trained professionals like engineers and nurses are leaving their fields for more lucrative private sector jobs.

The average Cuban monthly salary is $20, forcing people to seek additional income through informal markets.

Cubans engage in informal markets not for wealth but for survival, selling items like popsicles and newspapers.

Since Raul Castro's takeover in 2008, there's been a significant increase in private licenses, with 20% of the economy now private.

Many Cubans remain skeptical about real change due to decades of relying on illegal creativity for survival.