Wages at the Kempinski

[El Presidente]

Wages at the Kempinski Luxury Hotel in Havana

Fernando Ravsberg, julio 5, 2017
Artículos de Fernando Ravsberg, Diario, Economía, English Version, Política, Sociales

The recently opened Gran Hotel Manzana Kempinski, Cuba’s most luxurious and expensive hotel with rooms up to US $1300, pays its cleaning staff US $9.75 a month (in local currency) plus a US $10 stimulus in hard currency.

An employee told us that in total she receives less than $20 a month, several dollars below the national average wage.

The situation has caused several of the employees to quit their jobs causing instability of trained personnel. This creates difficulties for the foreign administration, which would be willing to increase wages if the Cuban government would allow it.

The recently opened hotel made the news during its construction phase over hiring hundreds of skilled construction workers from India to speed up the conclusion of the building. They made US $1,600 a month [plus expenses], 20 times more than what was paid to their Cuban counterparts [who were let go].

[99call]

Brutal

[Colt45]

It all seems to be going a bit sideways......

I guess I'd be interested in learning more about the foreign administration, and how / who determines wages. What happens with that $1300 a night?

[archosaur]

Wow.  That is just so wrong.

[stogieluver]

It's a communist country.  What do you expect? 

[gweilgi]

1 hour ago, stogieluver said:

It's a communist country.  What do you expect? 

Not just a communist country -- they do this elsewhere, to whatever degree they can get away with it.  My brother learned the hospitality trade in continental Europe, and he was only ever paid the mandatory "apprentice's wages" of around $500 a month for a 60-hour working week ... and they deducted the cost of room and board.  It is also very common in Europe to ship in workers from low-wage countries on seasonal contracts who work 6.5 day working weeks for a lot less than the locals...

[MooseAMuffin]

Completely insane. I'm with @Colt45 on this one. Where/who is getting this money? Maybe this is due to my own ignorance but, I've never been under the impression that the Castro's lived a life of luxury. I could definitely be wrong on that though.

[BellevilleMXZ]

Not surprised really. Doubt it will ever change in my lifetime sadly.

And the price to stay there is crazy, I think they have WAY overthought what they were hoping was going to be a huge influx of US travelers, with very deep pockets. I love Cuba, but it has a long way to go before they can charge that kind of money. We are going to Cuba in nov. but I'm waiting to buy as I'm sure prices are headed south.

[Smallclub]

2 hours ago, stogieluver said:

It's a communist country.  What do you expect? 

it has absolutly nothing to do with communism. It's a common practice in many capitalists countries. The workers (from India, Pakistan, etc.) who build the skyscrapers of the Gulf countries are not treated otherwise…

[cigcars]

      * I seldom pipe in when it comes to disputes about Cuba and some other foreign countries outside the U.S...BUT THAT'S NOT RIGHT!!!  If I were a native Cuban I'd be OUTRAGED at foreign workers on my soil being paid hundreds of times what I and my native populace were paid for the same thing...(a common complaint throughout the world, no doubt). I don't see how that is going to put the new government (whoever is running Cuba now) into good graces or acceptance by the Cuban people if this kind of thing is going to be a regular occurrence. Not good...not good.

[LLC]

Of course not justifying the system but keep in mind people in the service industry like the maid or servers do much better than the average Cuban because they get tips in CUC. If you have to work in Cuba, a taxi driver, server or maid at a top hotel is like winning the lottery vs the guy that sweeps the street or even the doctor.


Sent from my iPhone using Tapatalk

[OZCUBAN]

A fair days pay for a fair days work,it should be an international unwritten law but as we all know the world is far from perfect 

.let us just count our blessings there's always someone  worse off than you in everything health wealth etc etc 

[cigarsandcoffee]

I moved out of a home I rented and hired a cleaning company to do an exit clean, which was $500.  Two ladies from the company spent most of the day cleaning the home from top to bottom.  After the job was done, I paid the lady and gave her tip because it was obvious she went above and beyond. Out of curiosity I asked her how much she would make and was shocked to learn that each of the ladies would only get $20 a piece. The remaining $460 would go to her boss. So is this an example of the capitalism I keep hearing in this thread?

[PigFish]

32 minutes ago, cigarsandcoffee said:

I moved out of a home I rented and hired a cleaning company to do an exit clean, which was $500.  Two ladies from the company spent most of the day cleaning the home from top to bottom.  After the job was done, I paid the lady and gave her tip because it was obvious she went above and beyond. Out of curiosity I asked her how much she would make and was shocked to learn that each of the ladies would only get $20 a piece. The remaining $460 would go to her boss. So is this an example of the capitalism I keep hearing in this thread?

No my friend this is what happens when you work for a criminal enterprise, which is what communism is.

You see the ladies may not have a choice, because they may not be working your country legally. There is often a back story to every 'story.' The owner may know this and his employees are free to leave and work elsewhere or stay and get the best deal they can. This is what happens when people work outside the law. One person breaks the law and another takes advantage of it and also breaks the law. Law breaking does not define capitalism. That defines criminality. Keeping people captive, so that they have no choices, and where they go to jail if they speak up sounds a lot like Cuba to me. No amigo, you have defined communism, a criminal enterprise, not capitalism...

Of course you might have also been viewed as a rich sucker! And this tale of woe might work on a lot of people so that they get a tip. The two ladies might actually own the company or are partners in it... Did you do a D&B...? The two ladies, as nice as they may have seemed could be lying about their situation.

I guess the next question is this. Did you get their names and phone numbers and are you willing to have them back at $250 each next time, cutting out their boss and paying them direct? Or would you be concerned that if they caused damage to your home you could not hold them liable? What if they get hurt on your property...? 

Did the amount that they claimed to get paid violate the labor laws as you know them? If so, what are you going to do about it? OR, because your got your house cleaned and noting is damaged are you just okay with it and not going to rock the boat? If you feel strongly about it, call the department of labor... There are laws in my country, and yet I can no longer call it capitalist! How about yours?

So, to answer your question, this is not capitalism, as imperfect as it may be! The answer depends on the facts. If the two are illegal they should be deported and then their boss put in jail for breaking the laws governing the hiring of illegals and at the same time abusing them. That might make room for a real cleaning company, bonded, insured and hiring legal, professional cleaners. The cost next time may be $1500.00, but that is capitalism!

-Piggy

 

[semifan1]

2 hours ago, cigarsandcoffee said:

I moved out of a home I rented and hired a cleaning company to do an exit clean, which was $500.  Two ladies from the company spent most of the day cleaning the home from top to bottom.  After the job was done, I paid the lady and gave her tip because it was obvious she went above and beyond. Out of curiosity I asked her how much she would make and was shocked to learn that each of the ladies would only get $20 a piece. The remaining $460 would go to her boss. So is this an example of the capitalism I keep hearing in this thread?

If this is in the U.S they should quit and start their own company.

[Nino]

2 hours ago, sarkozy said:

You can be certain that the wage levels have been set by the Cuban government. They're keen to avoid their workers getting higher wages from capitalist businesses. If Kempinski was to pay Caribbean market wages what would that say about the revolution and the miracle of Cuban communism?

Of course the wage levels are set by the Cuban gvt.- it is the Cuban gvt. that enriches itself from the wages paid by foreign companies.

All foreign companies have to hire Cuban staff via a single state company, it's mandatory - and those foreign companies pay the state company very decent wages like 500 to 600 € for a cleaning staff, more for waiters, reception staff, bartenders, managers etc...

But - the Cuban staff get paid by the state company who pockets 95% of the wages paid for them. 

Same thing ( on a more monstrous scale ) happens with all the Cuban doctors, nurses, workers "exported" ( or is it "exploited" ?? ) by the Cuban gvt. to work abroad.

From 2015 : https://www.forbes.com/sites/billfrist/2015/06/08/cubas-most-valuable-export-its-healthcare-expertise/#53b8b3ef195e

When you think of Cuban exports, you might think of sugar, or perhaps its famously sought-after cigars. But one of the nation’s most profitable exports is actually its own healthcare professionals.

The Cuban government reportedly earns $8 billion a year in revenues from professional services carried out by its doctors and nurses, with some 37,000 Cuban nationals currently working in 77 countries. The socialist regime allows the government to collect a portion of the incomes earned by Cuban workers abroad.

For example, in 2013 Cuba inked a deal with the Brazilian Health Ministry to send 4,000 Cuban doctors to underserved regions of Brazil by the end of the year – worth as much as $270 million a year to the Castro government. By the end of 2014, Brazil’s Mais Medicos program, meaning “More Doctors,” had brought in 14,462 health professionals – 11,429 of which came from Cuba.

 

12 hours ago, El Presidente said:

This creates difficulties for the foreign administration, which would be willing to increase wages if the Cuban government would allow it.

 

Kempinski ( or Melia, Iberostar, etc ) would be willing to increase wages ... provided it would go to the workers.......

[Drguano]

Thanks, Nino! 

[Fuzz]

Ok, that's it. Time to clean the pool.

 

[PigFish]

6 hours ago, nino said:

Of course the wage levels are set by the Cuban gvt.- it is the Cuban gvt. that enriches itself from the wages paid by foreign companies.

All foreign companies have to hire Cuban staff via a single state company, it's mandatory - and those foreign companies pay the state company very decent wages like 500 to 600 € for a cleaning staff, more for waiters, reception staff, bartenders, managers etc...

But - the Cuban staff get paid by the state company who pockets 95% of the wages paid for them. 

Same thing ( on a more monstrous scale ) happens with all the Cuban doctors, nurses, workers "exported" ( or is it "exploited" ?? ) by the Cuban gvt. to work abroad.

From 2015 : https://www.forbes.com/sites/billfrist/2015/06/08/cubas-most-valuable-export-its-healthcare-expertise/#53b8b3ef195e

When you think of Cuban exports, you might think of sugar, or perhaps its famously sought-after cigars. But one of the nation’s most profitable exports is actually its own healthcare professionals.

The Cuban government reportedly earns $8 billion a year in revenues from professional services carried out by its doctors and nurses, with some 37,000 Cuban nationals currently working in 77 countries. The socialist regime allows the government to collect a portion of the incomes earned by Cuban workers abroad.

For example, in 2013 Cuba inked a deal with the Brazilian Health Ministry to send 4,000 Cuban doctors to underserved regions of Brazil by the end of the year – worth as much as $270 million a year to the Castro government. By the end of 2014, Brazil’s Mais Medicos program, meaning “More Doctors,” had brought in 14,462 health professionals – 11,429 of which came from Cuba.

 

Kempinski ( or Melia, Iberostar, etc ) would be willing to increase wages ... provided it would go to the workers.......

.... Careful with the facts Nino. Facts interfere with ideological thinking and we cannot have any of that...!

Great post! -R

[JohnInCleveland]

Worth mentioning that Cubans aren't very experienced with speedy, efficient construction.  One of the issues is foreigners taking jobs from Cubans and being paid significantly more, another issue is the Cuban labor force is notoriously slow and inefficient.  

 

Communism and inefficiency are synonymous.  Can't have the new hotel open in 2036.

[gweilgi]

6 hours ago, JohnInCleveland said:

Worth mentioning that Cubans aren't very experienced with speedy, efficient construction.  One of the issues is foreigners taking jobs from Cubans and being paid significantly more, another issue is the Cuban labor force is notoriously slow and inefficient.  

 

Communism and inefficiency are synonymous.  Can't have the new hotel open in 2036.

An argument could be made that it's not just Communism.  Two examples:

1.) the railway line from Adelaide to Darwin, joining the South and the North of Australia.  This was mandated by the Northern Territory Act of 1910.  It was actually completed in 2004.

2.) the new airport in Berlin, Germany.  After 15 years of planning, construction started in 2006 with a planned opening ion 2010.  The latest estimated start to regular flights is 2019, but no-one is taking any bets on that.  The original cost was 2 billion Euros, and that has increased to 8.6 billion ... and counting.  

So maybe the common factor is not ideology ... but government.

[PigFish]

... look at how long it took to do something with the world trade center buildings!

Yes, bureaucracy, the bigger the government, the bigger the problem! -Piggy

[gweilgi]

13 hours ago, nino said:

 

Kempinski ( or Melia, Iberostar, etc ) would be willing to increase wages ... provided it would go to the workers.......

It is also worth noting that we need to look at wages in relation to cost of living and overall wage levels.

Firstly, no cleaner *anywhere* will earn anything close to the average wage.  It's an unskilled job with very low entry barriers and lots of competition.

Secondly, access to hard currency is hugely prized and will magnify actual purchasing power of these Cuban cleaners far beyond the nominal exchange rates.  That's not even factoring in the tips left by hotel guests: if only one or two guests a month leave a few bucks behind, the total take-home pay may well double the official pay-packet, if not more.

Thirdly, the cost of living.  Most Cubans own their own homes.  There are no property or sales taxes.  Food staples, transportation and utilities are very heavily subsidised.  Education and healthcare are free.  So while the monthly pay of a cleaner at the Kempinski would not cover the cost of a week's worth of semi-decaf half and half free range macrobiotic soy chai tea latte at Charbucks, the cost of living is so ridiculously low in Cuba that USD20 should amount to a living wage.  

None of which excuses the rip-off practised by the Cuban government, or their refusal to let the hotel pay their staff more; it merely highlights the need to see things in perspective.  

[oliverdst]

19 hours ago, nino said:

Of course the wage levels are set by the Cuban gvt.- it is the Cuban gvt. that enriches itself from the wages paid by foreign companies.

All foreign companies have to hire Cuban staff via a single state company, it's mandatory - and those foreign companies pay the state company very decent wages like 500 to 600 € for a cleaning staff, more for waiters, reception staff, bartenders, managers etc...

But - the Cuban staff get paid by the state company who pockets 95% of the wages paid for them. 

Same thing ( on a more monstrous scale ) happens with all the Cuban doctors, nurses, workers "exported" ( or is it "exploited" ?? ) by the Cuban gvt. to work abroad.

From 2015 : https://www.forbes.com/sites/billfrist/2015/06/08/cubas-most-valuable-export-its-healthcare-expertise/#53b8b3ef195e

When you think of Cuban exports, you might think of sugar, or perhaps its famously sought-after cigars. But one of the nation’s most profitable exports is actually its own healthcare professionals.

The Cuban government reportedly earns $8 billion a year in revenues from professional services carried out by its doctors and nurses, with some 37,000 Cuban nationals currently working in 77 countries. The socialist regime allows the government to collect a portion of the incomes earned by Cuban workers abroad.

For example, in 2013 Cuba inked a deal with the Brazilian Health Ministry to send 4,000 Cuban doctors to underserved regions of Brazil by the end of the year – worth as much as $270 million a year to the Castro government. By the end of 2014, Brazil’s Mais Medicos program, meaning “More Doctors,” had brought in 14,462 health professionals – 11,429 of which came from Cuba.

 

Kempinski ( or Melia, Iberostar, etc ) would be willing to increase wages ... provided it would go to the workers.......

In the Brazilian case doctors receive US$1000 and Cuba US$2000

There are doctors who receive more depending on the city they work (usually small cities far away from the confort Brazilian doctors demand) but this extra is paid direct from the city pocket and there is nothing to do with Cuban or Brazilian Federal government.

 

[Nino]

1 hour ago, oliverdst said:

In the Brazilian case doctors receive US$1000 and Cuba US$2000

 

A bit more in both cases, according to The Economist 2014, the Cuban doctor gets US$1245 and the Cuban gvt US$ 3030 ... still a very profitable deal for the Cuban gvt.

The programme pays each participant a salary of around US$4,500 a month. However, the participation of Cuban doctors is organised through the Pan American Health Organization (PAHO). The Brazilian government disburses the payments to the PAHO, which then transfers the monies to the Cuban government after taking a 5% administrative commission. The Cuban government pays the medical professionals working in Brazil a monthly salary of US$1,245, and pockets the rest.

http://country.eiu.com/article.aspx?articleid=1782243562&Country=Cuba&topic=Politics&subtopic=Forecast&subsubtopic=Political+stability&u=1&pid=1965599580&oid=1965599580&uid=1