POSSIBLE IMPLICATIONS OF CASTRO'S TOUGHER PROGRAM FOR THE LABOR FORCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A001000010015-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: February 23, 2006
• Sequence Number: 15
• Publication Date: July 18, 1963
• Content Type: MEMO

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CENTRAL INTELLIGENCE AGENCY
18 July 1963
SUBJECT: Possible Implications of Castro's Tougher
Program for the Labor Force
A. The Castro government, in a new effort to break out of
its economic straitjacket, has begun to introduce a program to
control and discipline Cuban workers. Measures to be applied to
the non-agricultural labor force (primarily to manufacturing and
construction workers) have been in the pilot stage since mid-May
and are to be put into more general practice during the next fear
months. They include work norms, penalties for production short-
falls and for absenteeism, and a countrywide, government-administered
wage system which will divide the workers into eight pay-rate
categories in accordance with their skills, training, and per-
formance. Castro himself has taken to the stump to explain to
workers why they must be pressed harder and has flatly told them
that "whoever does not work does not eat."
B. The new policy, no matter how administered, is likely
to lower worker morale. If applied in arbitrary and dogmatic
fashion, it will almost certainly cause widespread discontent.
To what extent this might be translated into effective opposition
to Castro is much more problematical, but these measures could
make his regime more vulnerable than it has been.
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1. NIE 815-63, "Situation and Prospects in Cuba," dated
14 June 1963, discussed the continuing consolidation of the position
of the Castro regime and predicted that it would be more firmly
established a year hence than it is today. A number of contin-
gencies were cited, however, which might affect this judgment. One
was the possibility that Castro would turn to harsh administrative
measures to get the Cubans to work harder. Despite its awareness
that there are risks involved, his regime now appears committed to
this line of action.
2. The Castro government has, from the beginning, had
serious problems with the Cuban labor force, the free-and-easy
attitude of many of its members, their distaste for hard work and
long regular hours, their lack of technical skills, their cavalier
attitude toward. the maintenance and repair of machinery. For more
than a year Cuban officials have been talking about work norms and
other labor-control devices. Consideration of detailed measures
went ahead in the early months of 1963, but Castro's decision to
carry out a new tougher labor policy apparently did not become firm
until his visit to the Soviet Union from which he returned in
early June.
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3. Castro seems aware that there is considerable risk in
this new line of action; presumably he feels that the economic
need to improve labor productivity and expand production out-
weighs the political danger of increased discontent. During his
four and a half years in power, Castro has been unable to get much
forward movement in the Cuban economy despite substantial balance-
of-payments, developmental and technical aid provided by the
Soviets. Cuban GNP and total personal consumption are still well
below the level of 1958-1959; many types of foodstuffs as well as
consumer goods are scarce; the distribution system is poorly
organized and rationing has become steadily more extensive; invest-
ment capital is inefficiently utilized and managerial talent remains
very limited; and. Castro has told Cuban workers that continued
failure to increase production will imperil retirement pensions,
the expanded sick pay and hospitalization plan, scholarships for
advanced education and other social welfare programs.
4+. It is worth noting that following his return from the
USSR Castro announced no new pledge of Soviet economic aid, other
than the Soviet agreement to boost its price for Cuban sugar. In
his speeches since the visit, Castro has strongly emphasized that
Cuba must make its economic progress very largely on the basis of
its own efforts and resources.
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5. Experimentel work norms were initiated in mid-May in
some 300 enterprises, and the Minister of Labor has announced that
such norms and a new eight-category wage system will be introduced
during the next few months for ell of the non-agricultural. labor
force. Skill and training, as well as performance, are to determine
each worker's wage category. Soviet advisers have assisted in set-
ting up some of the experimental norms. Workers who fail to meet
their norms are to lose a proportionate amount of pay; for exceeding
the norms, however, they will not be paid more but will merely
qualify more rapidly to advance into the next wage category. Time
there will be much room for arbitrary action on the part of officials
administering the program and much reason for resentment on the part
of many workers.
6. The introduction of work norms and other such measures to
discipline labor has historically proved to be a very tricky business
even in Communist countries with security machinery stronger then
that in Cuba. The Castro regime is apparently anxious to cushion the
Category one is from, less than 20 to 49 centaros per hour;
category two, from 50 to 59 centaros; category three from 60
to 69 centaros; and so on to category eight which is 1.30 to
1.49 pesos per hour. According to the Minister of Labor, about
60 percent of the workers fall into the first three categories;
only 2 percent into category eight. Another 22 percent -- the
highest paid workers -- are not included in the system.
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initial impact of its program. For example, workers who are assigned
a wage category below their present wage are to be temporarily paid
the difference as "unearned income." Initially the norms, in many
cases, will be set at moderate levels. Castro himself has been
making a series of speeches to labor groups explaining the need for
stronger labor discipline and exhorting them to cooperate and work
longer and harder.
7. If widely applied, the new tougher policies are almost
certain to lead to some increase in worker discontent. This dis-
content would probably be widespread if the measures were administered
in arbitrary or dogmatic fashion. Moreover, it would be added to a
more general disenchantment with the regime over the continuing
shortages of consumer goods.
8. In NI E 85-63 (Paragraphs 41 and 4+2) we saw little prospect of
significant resistance to Castro's consolidated power, but did point
out that "If something should happen to damage-Castro's ability to
command the loyalty of the Cuban people, for example, as a result of
ill-judged measures to discipline workers, the situation could get
out of control." The new labor program raises the question whether
this outside chance may eventually be realized. If discontent reaches
the point of disturbances and demonstrations by workers and the regime
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has to resort to repression by force, the chances would increase
of other groups in the population joining in opposition. In any
case, the new labor measures, as they are put into operation,
could make the regime more vulnerable.
FOR THE BOARD OF NATIONAL ESTIMTES
SHE MW KEt
Chairman
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TRANSMITTAL SLIP
TO: DCI
ROOM NO.
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~o July 1963
BUILDING
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Deputy Dir% for Intellig ce
AD/NE
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FORM NO.
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BUILDING
Headquarters
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WHICH MAY BE USED.
EXTENSION
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