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The Fundamental Question

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Lower prices or raise wages?

To speak of prices is, inevitably, to speak of incomes. Even though from 1994 to the present, the majority of products available in national money (pesos) have become cheaper, the impression that continues among the population is that "everything is very expensive." There are several reasons.

The relationship between wages and the consumer price index continues at a very unfavorable level for the majority, in spite of the growth, year by year, of the average wage. Moreover, the material needs accumulated in the decade of economic crisis have exerted more and more pressure on the family budget, especially with the notable increase in the products and services available. The times during which there was "nothing of nothing" were left behind.

With 20 Cuban pesos, one can buy vegetable oil in this market, but . . .

In the recent debates over the Thesis of the Congress of the CTC, it was common to hear proposals and criteria in favor of state action to reduce prices; at the same time, the option to improve workers' incomes through wage increases was defended.

Certainly, a lowering of prices at the present time would primarily benefit those with the most solvent finances, and would only be a slight alleviation for the majority. The fall of the price index continues today depending, to a great extent, on a considerable increase in the supply of products (mainly with respect to agricultural products), and not an artificial standard which, by ignoring the law of supply and demand, would set ideal prices for speculation.

Nevertheless, in the opinion of many workers, the prices of products of fundamental necessity like cooking oil, soap, detergent and powdered milk, should be lowered in the commercial dollar currency network. Although the principle that prioritized the establishment of a policy of high prices in these stores is still viable, it seems advisable --both to popular opinion and to specialists -- to make some adjustments with respect to the price of these articles.

In the first place, it is absolutely certain that those who have access to a relative abundance of dollars are privileged, and an elevated system of prices for their consumption is fair. However, from August of 1993 to the present, the dollar has made its way into the economy of the general population, and what really determines privilege is not the possession of dollars in and of itself, but rather how much dollar currency is needed to satisfy the aggregate expenses of the household. But the most pressing reason for a price adjustment is that there is not an adequate supply of a number of fundamental products available for purchase in pesos; and to obtain them at the present juncture, one inevitably must assess their cost in dollar store prices.

In the struggle to increase the purchasing power of the population, it appears that the option of raising wages is gaining favor. A global lowering of prices, while it would certainly create a beneficial climate in the general sense, would not be the most egalitarian method to improve the purchasing power of the Cuban population. Only the gradual and intelligent raising of wages and pensions, to not compromise monetary stability, can the fortify the pocketbooks of those who most need it.

. . . in this bakery, one needs $.50 or $.70 USD to buy this bread.

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