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Despite its dismal economic outlook, the Cuban government announced July 2 that it will boost pay for teachers and other educational professionals starting in the fall.

The raises will amount to roughly $3 to $7 a month per worker, and while that may seem paltry by American standards, it’s nothing to scoff at in a country where the average wage is around $17 a month.

The pay hike will cost the government about $400 million a year, according to the announcement in today’s communist party newspaper, Granma, and benefit more than 545,000 workers. For a country with 11 million inhabitants, that's spreading the wealth — however thinly — and given Cuba’s steep debts and cash shortages, it signals that the country plans to continue investing in its highly-regarded educational system.

The good news for teachers and educational professionals came with a hitch though: They will also start paying a 5 percent social security tax on their wages.

Taxes are a rare thing in Cuba’s heavily state-run economy, since most workers are paid by the government to begin with. So the purpose may be more psychological than practical, as the island’s authorities would like Cubans to develop a more taxpayer-style mindset — a sense that they’re contributing to the common good — rather than expect the government to pay for everything.

With a large aging population to care for, it's also potentially a way for Cuba to increase its pension funding, and to cope with the inequalities that will likely increase if the island's communist authorities introduce new economic liberalization measures.
 

http://www.globalpost.com/notebook/the-americas/090702/cuba-raises-pay-teachers