Why Cuban cab drivers earn more than doctors
- Submitted by: admin
- Business and Economy
- 12 / 23 / 2015
The taxi driver and the doctor
Armando is a 34-year-old taxi driver. He’s also among Havana’s rich, and not because he inherited any money. I bump into Armando outside his Central Havana apartment at dusk on a warm Sunday. He has stepped out to have a drink of high-quality aged rum while taking in the evening breeze. "I’ve been driving a taxi for 15 years," he says with pride, sipping his rum with an air of prestige not normally shown by taxi drivers. He goes on to tell me of his years driving a taxi he rented from the government. After several years, with a small loan from a family member, Armando bought a yellow taxi, obtained one of the few private licenses available in the country, and began making big bucks.
"I have to pay $20 per day in taxes. But after that, all the money goes straight to me." Armando has tapped into the hottest market in Cuba from which to extract his fortune: tourism. He can charge between $20 and $25 per ride to the airport. Doing that a few times per day plus some rides within the city puts him at around $1,500 per month in profits, over 30 times more than the average physician’s monthly pay of around $45.
"I live good here, and I have no intention of leaving," boasts Armando, in one of the rare moments that someone talks to me with no complaints about the situation in Cuba.
His entire family has emigrated to Miami, but he has no desire to follow. "Cuba is safe. You see right there?" he says, pointing to a lamppost across the street. "There are five security cameras just on that one post, with police monitoring every one, 24 hours a day. You think I’ll ever get robbed with that kind of security?" He doesn’t need an answer. He continues, "If this were Mexico, a robber would pop out right now with a gun this big and stick it in your side and steal that camera in an instant. But not here. Why would anyone leave Cuba?"
The key to Armando's success
Cuba’s economy works as a central planning model, where government ministries dole out resources and set everything from prices to inventories to salaries. The fact that a taxi driver can make so much more than a physician is a reflection of the Cuban government’s heavy focus on tourism. For years, the central planning apparatus has valued tourism as a key mechanism for both bringing in revenue as well as propagating the idea that Cuba is thriving. Many pesos are collected by the high prices on everything related to the tourism industry.
A walk through Old Havana reveals the fruits of this focus: Old architecture is restored, trendy venues are humming with people and alcohol, and, lucky for Armando, taxis are abundant, their prices hovering around typical rich-country rates or higher. This means lots of tax money for the government, and lots of profits for Armando.
There are other ways to compensate doctors
Even with the clumsy pricing schemes of the central system, Cubans have developed alternative ways of valuing the highly skilled. "Tomorrow I’m going to the doctor because my kidneys have been hurting because I sit so much in the car," says Armando, speaking a little louder and more candidly now that the rum has hit his blood. "I am going to show up with a fresh bottle of a fine liquor under my coat and when I get there I will flash it to the doctor. The doctor will then call me in sooner than later, and I will present him with this ‘regalito' [little gift]. In return he will do a good job on me." Armando claims that going to the doctor without a "regalito" is asking for longer wait times and a halfhearted job by the doctor. "That's how we do thing 'a lo Cubano,'" he says, echoing a catchall phrase that captures every idiosyncratic form of corruption that has emerged in the Cuba of the Castros.
The exodus of skilled labor
Armando's relatively high income and the economic backwardness contained therein helped shed light on a question I have run into since I arrived here. I go to places and ask the bottom-of-the-totem-pole workers if they’ve "been working in this for a long time." Some had. Others would recount their past life as a highly skilled tradesperson who left that life for a higher salary doing remedial entry-level work. Eduardo used to be a mechanical engineer; now he cooks at one of Havana’s few private restaurants. Lazaro used to be an information scientist and now illegally serves ice cream in the street. Carlos used to be an elementary school teacher and now waits tables at a tourist restaurant in Central Havana. And Graciela was a professor of technical sciences for the military academy and now walks the streets illegally selling faded copies of the Cuban constitution. This is how you survive "a lo Cubano."