Santiago bustles with the work of Cuba’s new self-employed

Posted on Sunday, 04.08.12

EMPLOYMENT

Santiago bustles with the work of Cuba's new self-employed

As the communist government seeks to move massive numbers of people off
state payrolls, Cubans are embracing self-employment — like it or not
By MIMI WHITEFIELD
mwhitefield@MiamiHerald.com

SANTIAGO, Cuba -- SANTIAGO , Cuba As Denia Ojeda Oliva combs a sable
tint into a customer's hair at the Ibis beauty salon, she laments the
high cost of beauty supplies.

But that's just one of the concerns at Ibis since it was converted from
a state-run salon to one owned by the employees who now pay taxes to the
government.

As cuentapropistas — the term for Cuba's self-employed — they must worry
about paying the electric bill, maintaining the shop, and, of course,
paying taxes they find a bit too high for comfort.

"We're grateful for the new system, but we need a little help
maintaining the level of beauty we want to guarantee,'' says Iminsy
Ross, a manicurist who presides over a tray of brightly colored nail
polishes at the entrance to the shop.

Faced with the reality that it could no longer afford to keep nearly the
entire working population on state payrolls, the government began
embracing the concept of self-employment in earnest about two years ago.

First it announced it wanted to get out of the beauty and barbershop
business and turn such shops over to the workers, and then in September
2010, leader Raúl Castro revealed plans to move 500,000 state workers to
self-employment by last March and double that number by 2014.

But the transition is moving much slower than anticipated and state
furloughs haven't approached those goals. According to the latest
figures from Cuba's Ministry of Labor and Social Security, 371,000
people now hold self-employment licenses. But some of them were already
working under the table and took advantage of the change to legalize
their status.

Still, in this southeastern Cuban city, one doesn't have to look far to
find budding entrepreneurs, including wedding photographers,
manicurists, locksmiths and piano tuners. By far the largest category is
food vendors, who offer peanut candy, pizza and soft-serve ice cream
cones on the street, and grilled lobster and shrimp at private
restaurants called paladares.

Self-employment is permitted in 181 job categories but some of the
cuentapropist as have stretched the definition of what they're permitted
to do.

Soel Quintana's license, for example, says he is a " modisto sastre,''
(dressmaker/tailor) — a purveyor of hand-made clothing. But he says
"there's no market for that in Cuba.''

"People here like the stretchy fabrics, the tops with sparkly
appliqués,'' says his wife, Derleny Kindelán Revé. "Or they like pants
like this,'' she says, indicating her husband's bleached jeans with
decorative zippers. "Where would you even get fabrics like these to make
clothes?''

So he buys from people who arrive with bags full of clothing and shoes
from Miami, Ecuador, Peru — even Europe — and resells them. He lives in
Havana but frequently makes the trip to Santiago where his family lives
to sell clothes to "friends and people of confidence.''

Among the big sellers are high heels from Miami bedazzled with faux
stones and a knock-off of Converse sneakers.

Sales are up and down, he says, but on a good week he can earn about
$100. Out of his earnings, he must pay 110 pesos (around $4.60) a month
to the government and 260 pesos every three months, he says.

Kindelán has only had her license as a manicurist for about a month but
says she made sure she got it before she began painting nails. Now she
sets up a small handmade table with a fluorescent light attached in the
entryway to her Central Santiago apartment building and is open for
business.

She displays some of her handiwork: her own nails, which are embellished
with little three-dimensional flowers. But as the workers at Ibis have
discovered, such beauty comes at a cost.

"Everything that has to do with nails is in hard currency,'' she says.

Cuba has a dual currency system: Wages and most things bought and sold
for daily living are in Cuban pesos, but scarcer imported items and
tourism expenses are calculated using the Cuban convertible peso (CUC).
One CUC is worth 24 Cuban pesos, making buying CUC-denominated goods
extremely expensive for Cubans.

As she explains her dilemma, a woman arrives at her apartment with a
sack full of foreign products that she's offering at CUC prices. She
pulls out a nail appliqué kit from the Dominican Republic, but Kindelán
passes because it's too expensive.

Such under-the-table commerce is often the lifeblood that supplies
Cuba's new entrepreneurs, and so-called mules make a living ferrying
in-demand products to Cuba in their luggage — ostensibly as gifts to
friends and family. The saleswoman declines to give her name and doesn't
want her picture taken.

Other micro-entrepreneurs make an effort to play by the rules.

Shoe repairman Leonel Perú Mengana, for example, has set up shop on a
sidewalk along Heredia Street and is patiently sewing the sole back on a
black tennis shoe. He keeps all his important papers in a briefcase set
up on a nearby stool: his license and documentation showing he pays 50
pesos a month in taxes and 87.50 pesos for social security.

"There are quite a few inspectors in the street,'' says Perú, who used
to work in maritime construction. "Fortunately no one has come by here,
but I'm ready.''

He'll charge 15 pesos to put new soles on the tennis shoes; 5 pesos to
put a new heel cap on a pair of flowered high-heel sandals.

It's hard to come by his supplies, especially glue. "Some things I get
from outside Cuba; some tools I invent,'' he says as he pokes a
heavy-duty needle into the tennis shoes.

"A very old man in my building taught me this trade 20 years ago,'' he
says. "Some days I don't make much of anything; other days it's OK. It's
sufficient only to provide food for the house.''

"I work because I have to survive but I also like this profession,''
Perú says.

Yet another twist on self-employment is to hold on to a state job and
work on the side.

Alejandro Enis Almenares is a guitarist, composer and singer, and one of
his best-known songs, Mueve la cintura mulata , has appeared on
Hollywood sound tracks and documentaries.

At 76 years old, he still plays sets at the state-owned Casa de la
Trova, the famed house of traditional Cuban music. But he, too, is
self-employed, making and repairing guitars. "I've learned the craft
well, but my first love is music,'' he says.

Seventy-eight-year-old Arsenio Negret tries to supplement his retirement
income with a small produce cart named "Bendicenos'' (Bless us) set up
in the courtyard of his building in the casco histórico (historic center).

His recent offerings included eggplant, onions, carrots, tomatoes,
peppers, bananas, papayas and pineapples, but he says business isn't
going particularly well. "There's a lot of competition,'' Negret says.

He's only a few blocks away from a well-stocked agropecuario market
where vendors say they too watch the prices at competing stalls. The
government used to regulate prices at this market but now merchants can
set their own prices and customers can buy as much as they want.

"I have to see what the competition is doing. Sometimes I lower my
prices,'' Marianelis Rosalba says. She recently was offering tomatoes at
five pesos (20 cents) a pound and black beans for 10 pesos a pound.

Meanwhile, the cuentapropistas at Ibis are butting up against the
realities of being their own bosses.

"Now if you go on vacation, you still have to pay the taxes,'' Ross
says. "So I only take one to two days at a time.''

One of their biggest laments is the condition of their shop. Pieces of
painted cardboard, some falling down, form the ceiling of the narrow
shop and the chairs where customers sit are shabby.

"There was a maintenance brigade before. Now it is our responsibility
and we're women who don't really know how to do these things,'' Ojeda says.

Before the changeover, Ross earned 250 pesos a month as a state
employee. Minimum wage in Cuba is 225 pesos. Now she earns more but must
pay taxes of 360 pesos a month. The hairdressers pay nearly 400, she says.

"We need more support with this new system,'' she says. "If they hand
over a shop in good condition, then they have a right to charge high
taxes.''

But clearly Ibis has seen better days.

Now the women must buy many of the supplies from state-run stores that
charge in CUCs or scramble trying to find other sources. "They say that
in Havana, the state stores have discounts on the weekends – but not
here,'' Ojeda says. "Sometime I find I have to work until 11 p.m. at
night.''

From the arts and crafts vendors who sell jewelry, wood carvings,
leather sandals and domino sets along a closed-off section of Tamayo
Fleites Street to freelance DJ's and the proprietors of private
restaurants set up on the rooftops of their homes, Santiago bustles with
the enterprise of cuentapropistas

But self-employment possibilities are more limited in the provinces.

In Mella, a small sugar milling town 24 miles northwest of Santiago,
several food vendors have set up shop at the turn-off into town. Alba
Hernandez sells melon nectar and beef and bologna sandwiches from a
home-made cart. Hernandez, wearing a promotional Little Caesar's
baseball cap that she says she bought in Cuba, was still working on a
recent day as the sun began to set.

She buys her meat at El Filete, the state-run meat market in the center
of town. She says she is doing OK — even with the 200-peso a month tax
she pays the government.

The clop-clop of horses' hooves signifies transportation and
self-employment in Mella. Two pesos will buy a ride around town in a
horse-drawn cart. Some of the carts are no more than a couple boards
attached to a galvanized metal box.

With a large reservoir on the edge of town, fishing is also an important
way to supplement income. Many of the men and boys cast hooks from inner
tubes but Carlos Ranquis prefers a spear-gun. On a recent day, a visit
to the reservoir netted him 45 fish — tilapia, trout and via j aca. He
works at the local electrical plant but sells fish to his friends and
neighbors to supplement his income.

Since the early 1990s when the old Soviet bloc collapsed, Cuba has
allowed limited self-employment but its interest in such
entrepreneurship has ebbed and flowed depending on how well the economy
is doing.

Some wonder whether the Cuban government might once again pull back on
self-employment.

But Ted Piccone, a senior fellow at Brookings Institution in Washington,
D.C., says his impression is that economic reforms will continue in Cuba
— although at a slow pace and methodically as the government endeavors
not to lose control of the process.

Improving the living standard of the Cuban people, he says, is crucial:
"The process of economic reform will fail unless they can bring the
people along with them."

http://www.miamiherald.com/2012/04/02/v-fullstory/2738147/santiago-bustles-with-the-work.html