THE STANDARD OF LIVING IN CUBA
By José R. Alvarez
After 40 years, the economic Standard of Living in Cuba is less than 1% of what it was in the decade of the 50's.
As a Cuban who has lived during the last forty years in the 'North', working among 'Americans', I have run into many situations where friends and acquaintances, once they get to know I was born and raised in Cuba, ask me about 'how things are in Cuba', a theme that seems to have universal interest. Many seem to want to confirm reports that appear sporadically in the press and television, and which for whatever reasons have captured their attention. Those who are up in years still remember the October 1962 episode, some have heard about the Bay of Pigs, and considerably fewer know about the 'balseros'. Many have had great interest in the Elian Gonzalez case.
Depending on the kind of questions, my answers have focused on the issues around the tyrannical repression and on the monumental economic failure of communism, particularly as it relates to the daily procurement of food. That is, the use of rationing cards, etc. As I go into details, many become somewhat incredulous, since it is nearly impossible for them to understand circumstances so far and foreign from their daily lives existing a mere 90 miles from the richest and most powerful nation on the world.
During the last few years, my focus has been towards numbers, since there is no question those are well understood in this country particularly as they relate to individual income and results from investments. For example, I explain to them that a teacher or an engineer in today's Cuba earn respectively approximately 210 and 350 cuban pesos. And that, furthermore, when one uses the ongoing monetary exchange rate of 25 cuban pesos for one dollar, those cuban peso salaries represent $8.40 and $14.00 on a monthly basis. Their reactions to those numbers represent generally significant surprise; then they proceed to mentally figure out the real standard of living in Cuba, since the purchasing power of the dollar is a universal unit used to define the relative position of standards of living throughout the world. A favorite measurement among those who travel widely, is to ask what is the price of a 'big mac' in the different countries, as an appropriate tool for comparison.
More recently, I have gone on to more clearly define for those who ask me, the net change in the standard of living in Cuba that has taken place from the mid 50's to the mid 90's. This of course would be the result of the atrocious destruction of the country caused by the communists' failed economic policies and government. To arrive at this, more refined understanding, it is necessary to introduce two incontrovertible facts, readily available in reference books. The first is the fact that in the 50's, cuban pesos and dollars circulated freely in Cuba, on a par basis. This means that if a cuban traveled to the US with cuban pesos, he could exchange them into dollars one for one, and use those dollars normally. And of course, this helps to directly compare the standards of living in Cuba and the US at that moment in history. The second fact is the change in inflation index during the same period, that is, from the 50's to the 90's. That number is approximately 6.4. Which simply means that if something cost $1.00 in the 50's, the same article would cost $6.40 in the 90's. For example, a gallon of milk in the US today costs $2.80. The same gallon would have sold for $0.44 in 1955.
With this information, a comparison of the change in the standard of living in Cuba becomes quite easy and understandable for a great many people: for example, the same teacher that today earns the equivalent of $8.40 monthly would have earned $1.31 monthly in the 50's, and the same engineer would have earned $2.19 monthly. Since it has been solidly demonstrated that the corresponding salaries were in reality 150 and 300 cuban pesos, and that at that time cuban pesos and dollars were of equivalent worth, then we can see that those $1.31 and $2.19 today represent less than 1% of the salaries in the 50's.
The combined effect of the devaluation of the cuban peso against the dollar and of inflation during the last 40 years: 25 x 6.4, that is, 160 has been devastating. A peasant in the fields, a worker in a factory, would have to earn 160 times more in cuban pesos today just to keep up to par with where he was in the living standard he had in the 50's. And this of course assumes that the cuban economy would be able to supply against such demand, something we know is impossible in an inefficient, tyrannical communist system.
Such is the horrible reality of economic life in Cuba. The standard of living is less than 1% of what it was before the communist revolution. It is sufficient only to read a few letters from the island country today to agree that such brutal impoverishment is the terrible representation of daily life in Cuba.
Many of my 'American' friends, of course, experience an infinite difficulty accepting these facts that they clearly understand. Many would mention 'free public health' and 'free housing'. So, what can we add to answer those questions…? Simply that those who know, understand that the 'famous' public health system in Cuba is a hygienic disaster, lacking in the most basic medicines, facilities and resources. And that housing includes innumerable families forced to live sharing run-down homes. Not to mention public transportation, electric power, the so called telephone system, water supplies and sewers… Of course, the concept that there are 'free' things in this world has gotten out of favor with those who use our God-given reasoning. Simply stated, 'free' things supplied by the government are no more that one of the 'slogans' of communism for those who do not want to accept that man is individually and basically responsible for his own life in this world.
José R. Alvarez