Study - Cubans don’t make much, but it’s more than state salaries indicate

Study: Cubans don't make much, but it's more than state salaries indicate

A new survey shows that 54 percent of Cubans earn $50 to $200 monthly
The average official salary is $25 a month
Low salaries offset by free healthcare, education and subsidized living
expenses
BY MIMI WHITEFIELD
mwhitefield@miamiherald.com

When relations between Cuba and the United States were in the deep
freeze, few American companies viewed the island as a potential consumer
market.

With rock-bottom salaries and the embargo firmly in place, there was
little to pique their interest. But now with the Obama administration's
opening toward Cuba, international consulting companies have begun to
take the pulse of Cuban consumers.

The latest consumer survey comes from Rose Marketing, which was founded
in Boston and was the first independent advertising and public relations
firm to enter the then Soviet Union in 1989. It is now headquartered in
Moscow and has consulted for many multinational firms. Last year Rose
become one of the first marketing agencies offering its services in Cuba.

The Rose survey indicates that Cubans earn considerably more than the
official average monthly salary, which was 687 pesos, or about $25, in
2015, according to Cuba's National Office of Statistics. Wages in Cuba
averaged just 494.4 pesos ($18.66) monthly from 2008 to 2015.

The survey, which was conducted among 1,067 Cubans in Havana, Santiago
de Cuba, Holguín, Camagüey, Pinar del Río, and Cienfuegos in May and
June, found that about 27 percent of Cubans earn under $50 per month; 34
percent earn the equivalent of $50 to $100 per month; and 20 percent
earn $101 to $200. Twelve percent reported earning $201 to $500 a month;
and almost 4 percent said their monthly earnings topped $500, including
1.5 percent who said they earned more than $1,000.

The remainder of respondents declined to state their income, and Rose
said the survey had a margin of error of plus or minus 3 percentage points.

"Of course these income figures are relatively low in contrast to other
nations and the average Cuban still struggles to make ends meet," Rose
noted. But the firm said the income figures should also be taken in the
context that "Cubans receive free healthcare and education, as well as
minimally subsidized living expenses."

Another recent consumer study by the Boston Consulting Group found that
about half the Cuban population lives with a median household income of
$300 to $400 a year. However, it also found that about half of Cuban
consumers — mainly those in urban areas — had a household income of
$1,000 to $2,000.

Many Cubans have jobs on the side, and in recent years about a half
million have joined the ranks of Cuba's cuentapropistas, or
self-employed. Although there are still many government restrictions on
self-employed workers, the earnings potential for some is considerably
more than state salaries. About 50,000 employees of Cuba's joint
ventures with foreign companies also have higher earnings potential as
do those employed in the tourism sector who get tips.

Last week Marino Murillo, Cuba's economy minister, said that Cuba would
have to cut its fuel consumption by almost a third from now to the end
of the year due to the dwindling economic prospects of its patron,
Venezuela.

But at the time the survey was done this spring, Cubans were optimistic.
Seventy percent of those surveyed said they expected their incomes to
increase in the next six to twelve months — a prospect that is now more
dubious since the Cuban economy grew just 1 percent in the first half of
the year. Murillo said Cuba will have to reduce both imports and state
investments in coming months.

That could also dash Cubans' hopes for new consumer purchases. The Rose
survey found that 16 percent said they planned to buy home appliances in
the next six to 12 months, 15 percent wanted to buy perfume, and 13
percent planned purchases of fashion clothes. Twelve percent said they
planned to buy airline tickets; 12 percent, shoes; 7 percent,
automobiles; 6 percent, laptops; and 5 percent, smartphones.

Although advertising is infrequently seen on the island, 80 percent of
survey respondents claimed it would influence the brands they select.
Many Cubans carefully peruse the ads and fliers from newspapers brought
from abroad by friends and relatives, and advertising has begun to
appear on some Cuban apps and on the Paquete Semanal (Weekly Package), a
collection of movies, television and other pirated content from abroad
that is distributed on portable hard drives.

Another important source of supplemental income for Cubans is the
remittance payments they receive from abroad. Miami-based Havana
Consulting Group estimated that remittances sent to the island reached a
record $3.35 billion last year. Between 2008 and 2015, the firm said
remittances to Cuba grew by $1.9 billion and were the principal source
of Cuban family income.

Havana Consulting said an increase in flights to Cuba in recent years
has contributed to the growth of remittances since each Cuban that
travels to the island carries an estimated $3,200 to $3,500 in cash.
Increased migration of Cubans, loosening of U.S. restrictions on
remittances and the rise of a fledgling private sector in Cuba that is
often financed by money from abroad are other factors the firm cites in
explaining the spurt in remittances.

Source: Do Cubans live on $25 a month? New survey indicates actual
income is higher | In Cuba Today -
http://www.incubatoday.com/news/article89133407.html