A series of limited economic reforms since 1993 have injected doses of capitalism throughout the Cuban economy. The results are modest when measured in national accounts, but for many thousands of Cubans and their families, the reforms have brought higher incomes and a measure of security. Microenterprise is now legal. A March 1998 survey that I conducted with Joseph Scarpaci of Virginia Tech found that these businesses made an average monthly after-tax profit of 743 pesos, over three times the average Cuban salary. The entrepreneurs have brought commerce back to Cuban streets, and they have some tangible economic freedom, along with some handicaps that have made the pace of change erratic.
Many entrepreneurs quit state jobs to work for themselves.
There is no job in the state that I could have that would be better than this. Today his business is steady, and he is slowly renovating his house. But new businesses continue to open, suggesting that the longer term trend may be upward. In the government sector as well, the link between pay and output is being rebuilt as the government now uses incentive payments as a tool to spur production. Not every workplace can afford to pay them, but their use is spreading.