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Bienvenidos a Cuba! Economic Inequality

The Cuban People Are Not Our Enemies – Todos Somos Americanos

Robert García The City Project
Photos by Sam García Stanford ‘18

Economic Inequality

En Español

How is the Cuban economy doing under socialism and the blockade? The gross domestic product (GDP) in Cuba was about $6,800 per person in 2013, compared to about $53,000 in the US – and $3,400 in the US-dominated, free market political economy of Guatemala. Differences in income and wealth are relatively flat in Cuba.

In contrast, in the US inequality in wage income is “probably higher than in any other society at any time in the past, anywhere in the world,” according to Prof. Thomas Piketty of the University of Paris. The election of Ronald Reagan in 1980 triggered an explosion of inequality, tax cuts, downsized government and social services, and deregulation, as well as a stagnation of revenues for most of the nation accompanied by low growth. From the 1930s through the 1970s, the US was at the vanguard of progressive tax, minimum wage, and and social safety net policies designed to reduce inequality. From 1930 to 1980, the marginal tax rate for the highest US income (over $1 million per year) was 82% on average, and still as high as 70% in 1980. Tax burdens on high-income elites have fallen across the board since then, with the marginal rate topping out at about 40% in 2013. Blacks and Latinos at all education levels earn less than their non-Hispanic white counterparts. The median wealth of non-Hispanic white households was more than 10 times that of Hispanic households in 2013, and 13 times that of black households.

Women in the US make about 79 cents for every dollar a man earns, according to census data. A woman who works full time in California makes a median salary of $42,486, compared with $50,539 for a man. Latina women earn just 43 cents for every dollar earned by a white man, Black women 63 cents, and Asian women 72 cents.

How is Cuba doing compared to democracy and capitalism in Puerto Rico, a territory and colony of the US? President Obama criticizes Cuba for not giving people the right to vote. Puerto Ricans are US citizens, but they cannot vote for president, and have no senator or Congressional representative. The island’s economy, which produced about $29,000 GDP per person in 2013, has been in recession for a decade. In contrast to education and health in Cuba, more than 150 schools have closed. Puerto Rico’s largest pediatric hospital has been forced to close two wings and 40 rooms, and cannot afford to hire the nurses it needs. The island faces a public health emergency as the Zika virus spreads. Doctors, engineers, accountants, blue-collar workers, and entire families are emigrating daily. Puerto Rico has lost 9% of its population in the last decade.

More on The Cuban People Are Not Our Enemies – Todos Somos Americanos

US Embassy flag flies in Habana for first time in 54 years
US Embassy flies US flag in Habana for the first time in 54 years

Sam García is a sophomore at Stanford with a minor in Latin American Studies.

Robert García is Founding Director and Counsel of The City Project. He first worked on lifting the US blockade of Cuba in 1974, drafting the remarks and bill for Congressman Michael Harrington (D-MA) published in the Congressional Record.