Monday, April 12, 2010

Cuba handing beauty, barber shops over to workers

Monday April 12, 2010
Cuba handing beauty, barber shops over to workers
By Marc Frank

HAVANA (Reuters) - Communist Cuba is turning over hundreds of state-run
barber shops and beauty salons to employees across the country in what
appears to be the start of a long-expected revamping of state retail
services by President Raul Castro.

The measure marks the first time state-run, retail-level establishments
have been handed over to employees since they were nationalized in 1968.

Barbers and hair dressers in telephone interviews from a number of
cities during the weekend said they would now rent the space where they
work and pay taxes instead of receiving a monthly wage.

Those employees who do not wish to rent are being offered other jobs or

Cuba and North Korea are the world's only remaining Soviet-style command
economies in which the state controls more than 90 percent of economic
activity. Other communist countries such as China and Vietnam have long
since liberalized retail trade, services and small business.

The measure, which is subject to adjustment and local conditions, sets a
monthly fee for each person based on 15 percent of the average revenue
generated by haircutting and styling in each area.

They will be able to charge whatever the market will bear and expect to
make good money for Cuba, where the average monthly wage is 420 pesos,
or the equivalent of about $20 U.S.

Daisy, a hairdresser in easternmost Guantanamo province, said under the
old system the government took in 4,920 pesos per month per hairdresser.
Now she will pay the government 738 pesos per month and keep any
earnings above that.

In Santiago de Cuba the monthly fee is 1,008 pesos and 1,292 in the city
of Holguin.

"We have to pay water, electricity and for supplies but it seems like a
good idea," Daisy said.

She said that while the plan did not turn the shops into cooperatives,
employees would have to join forces to decorate and maintain the

"You will have to work very hard to earn a good living but I like the
idea," said Yordanka, 25, a hair stylist in the eastern city of Holguin.

Barbers and manicurists will pay less per month. For example, in
Guantanamo barbers will give the government 604 pesos and manicurists
will pay 280 pesos.

The government has not announced the new policy, which began this month
and now applies to beauty parlors and barber shops with three or fewer
seats, nor has the state-run media mentioned it.


Castro has fostered discussion in the media and through grassroots
meetings on what ails the economy since taking over for his brother
Fidel Castro more than two years ago.

The retail sector has come under withering criticism for poor service
and rampant theft, and officials have repeatedly urged patience as they
experiment with ways to bring improvement, without jumping into
full-scale capitalism.

Beauty shops have operated in a kind of a philosophical void that served
no one very well, said Mabel, a Havana hairdresser.

"In practice they were neither state nor private and simply didn't
function," she said.

Cuba expert Phil Peters at the Virginia-based Lexington Institute said
the new measure was a small step with potentially big consequences if
the model is applied to the broader retail sector.

"If carried out fully, it would convert small state enterprises into
leasing arrangements and urban cooperatives," he said. "Since the
cooperative model and leasing are already being extended in agriculture,
there would seem to be no ideological barrier to employing them in the

The Cuban government took over all small businesses and retail activity
in 1968.

In 1993 the government legalized self-employment in a number of retail
activities -- from home-based snack shops and restaurants to
beauticians, barbers and clowns -- but then gradually reduced the number
of licenses available.

The number of self-employed peaked at more than 210,000 in 1996,
according to the government, but had declined to around 100,000 by 2009.

Countless individuals engage in illegal self-employment, including hair
cutting, styling and manicures.

(Editing by Jeff Franks and Bill Trott)

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