In the early 1900s Cuba experienced a great deal of labor unrest, with strikes and labor slowdowns being commonplace. When Fidel Castro's revolutionary government came into power in 1959 there was great pressure for change from Cuban workers, some 2 million in number, most of whom were living in difficult conditions due to low wages that made it impossible for them to afford expensive consumer goods and high rents. Workers also lacked health care, access to education, retirement benefits, and vacations. The government complied with the workers' demands; labor contracts were renegotiated, wages were raised, rents were lowered, and the unemployed were given jobs. Many of the most marginalized (poorest) people saw immediate and real benefits giving them a sense of security, gratitude toward the revolution, and hope for the future.
These changes were short-lived, however. Many of the laws that were enacted in 1959 to benefit workers were repealed as early as 1961. Since that year, the revolutionary government fixed wages at a low level, which today are the lowest in the Western Hemisphere, averaging 100-400 pesos (US$5-$20) a month. The worker has been constantly asked to sacrifice for the survival of the revolution. Cuba has a workweek of 48 hours, and workers have been asked to give volunteer time to building projects, education, and harvesting. The only legal workers' union in Cuba, the CTC, is an arm of the Communist Party. It is not legal to strike, and there is no collective bargaining. As a result, the International Labor Organization has condemned Cuba for violations of human rights.
Some Cubans depend on the security net of health care, free education, and social security as motivation to work hard in government-run enterprises, but large numbers of Cubans are unhappy with the difficult conditions. Due to the fact that Cuban workers have had no legal recourse to address the work conditions, many have reacted by decreasing their productivity, sabotaging production, or by stealing products to sell on the black market.
Since the beginning of the revolution, the stated goal of the Cuban socialist state has been full employment . It has been relatively successful only on a superficial level. Because the Cuban state has owned almost every enterprise on the island, it has been nearly the sole employer. Even foreign companies that operate in Cuba are required to pay Cuban workers' salaries in dollars to a state organization called CUBALSE (Cubans at the Service of Foreigners). The Cuban state then pays its workers in pesos, at a rate that shortchanges the employee.
In order to keep low unemployment rates, in the past, the Cuban state did not require businesses to earn a profit. Many employees were kept on the payroll even though they were unnecessary to the business. Because of this, a high percentage of the companies in Cuba were continually losing money. The state continued to subsidize those businesses, keeping them functioning at a loss. In the economic crisis of the early 1990s, the Cuban leadership was forced to rethink these practices. Downsizing of these bloated enterprises was one of the first policies enacted to restructure the Cuban economy. Employees who were unnecessary were dismissed, and companies were required to earn a profit. Unemployment increased, but the levels are uncertain because there are no reliable unemployment statistics available for Cuba. However, due to the legalization of the dollar combined with the growth of tourism, and the fact that it is difficult to live on the official government salaries, many people are choosing to work in the informal economy or start their own small enterprises. Positions that bring an individual in contact with tourists can often yield far greater monetary rewards.