In a recent post on his official X account, Cuba's Prime Minister Manuel Marrero praised what he described as the positive reception of the pension increase among the population. According to Marrero, even those earning less than 1,528 pesos will benefit from the adjustment, which will raise their pensions to this amount. However, he provided no further specifics on the measure's scope, noting that Finance and Prices Minister Vladimir Regueiro Ale would provide more details soon.
The government's excitement starkly contrasts with the public sentiment. Social media reactions range from indignation to sarcasm. One user remarked, "With that, an elderly person can only buy a carton of eggs, Manolo." Another user pointed out the ongoing hardships: “We've been without power for 24 hours—people are so happy you wouldn’t believe it. 1,528 pesos, a liter of oil, and two pounds of bread.”
The Economic Reality Behind the Pension Increase
Cuban economist Mauricio de Miranda offered a critical analysis, arguing that increasing pensions is necessary, as is raising wages. Yet, without boosting domestic production or export income, the additional money will only fuel inflation. In a detailed Facebook analysis following the announcement, de Miranda highlighted that issuing more money without supporting income merely worsens the fiscal deficit. He also criticized the disproportionate spending on hotels and tourism—over 36,843 million pesos planned for 2024—while essential sectors like health and education are neglected.
De Miranda, a Professor at Pontificia Universidad Javeriana in Cali, Colombia, identified a structural issue: “In a collapsed and regressing economy like Cuba’s, robbing Peter to pay Paul is like filling one hole by digging another, which has been the norm. The current level of investment in Cuba is insufficient to set the country on a path of economic growth,” he asserted.
Public Perception of Economic Measures
This historic injustice in Cuba's pension system has left professionals with decades of service earning meager incomes barely above the minimum. The recent measure, according to the economist, will not significantly improve pensioners' lives. Instead, it is likely to exacerbate inflation, shortages, and the black market. “Haven’t we seen this movie before?” he asked, referring to past failures like the botched monetary reform.
Meanwhile, ordinary Cubans are crunching the numbers themselves, concluding that the supposed relief amounts to “a bottle of oil and five pounds of rice in the informal market,” as one user from Holguín noted. Others summarize the situation with cynicism: “Let no one be left behind; let everyone go behind with the same misery.”
Government's Recognition of Poverty and Future Promises
Marrero announced on Wednesday, July 16, during a session of the National Assembly of People's Power, that starting in September, there would be a pension increase for retirees currently receiving up to 4,000 pesos monthly. Yet, this adjustment, though welcomed by some, does little to alleviate the hardships faced by thousands of retirees on the island, where the cost of living continues to climb, and access to essential goods is increasingly limited.
In Cuba, a simple carton of eggs can cost over 3,000 pesos, and most essential goods like oil, detergent, chicken, or powdered milk are sold in convertible currencies, which the state neither pays nor sells to the population in their salaries or pensions. This situation forces millions to rely on remittances from abroad.
In 2024, Cubans have reported the exorbitant cost of a hen's egg file: 5,000 pesos on the black market, a price unaffordable for low-paid workers or retirees with their meager pensions. The government itself acknowledged on Wednesday that over 310,000 residents are currently living in poverty or social vulnerability amid a severe economic crisis and a heated public debate following official statements denying the existence of destitution on the island.
“We recognize that these 182,000 families and 310,000 individuals are not all the people in vulnerable situations in the country; the economic situation has increased the number of people associated with economic vulnerability,” the prime minister admitted.
In this context, the head of government promised that the administration would "study" a minimum wage increase, although he also assured that this would only happen "as we continue to boost the economy," a claim that wobbles as recent data presented to the National Assembly indicates the Cuban economy continues to contract.
Understanding Cuba's Economic Challenges
Why is the pension increase considered insufficient by many Cubans?
Many Cubans find the pension increase inadequate because the cost of basic goods far exceeds the amount of the increase. Essential items like eggs, oil, and bread are often priced beyond what the new pension can cover, forcing citizens to rely on the informal market or remittances from abroad.
What are the potential economic impacts of the pension increase without production growth?
Without an increase in domestic production or export income, the additional money from pension increases may lead to higher inflation. This can result in further shortages and an expanded black market, as goods become scarcer and more expensive.
How has the Cuban government responded to criticism about poverty and economic vulnerability?
The Cuban government has acknowledged that over 310,000 residents are living in poverty or social vulnerability, recognizing the economic challenges these individuals face. There is a promise to study a minimum wage increase, though it is contingent upon economic growth, which remains uncertain.