Miguel Díaz-Canel declared on Saturday that the recently approved wage reform for the budgeted sector and the increased pensions, effective since July with payouts beginning in August, illustrate that the economic changes implemented by the regime "shield those in the most challenging situations."
These comments were made during a visit to the Municipal Defense Council in East Havana as part of National Defense Day, as reported by Canal Caribe.
Joining him at the event were the president of the National Assembly Esteban Lazo Hernández, the Minister of the Revolutionary Armed Forces Álvaro López Miera, the Minister of the Interior Lázaro Alberto Álvarez Casas, and the Secretary of the Council of Ministers José Amado Ricardo Guerra, all members of the Political Bureau.
"This demonstrates that the transformation program is both economic and social in nature and aims to protect those in the most difficult situations. It begins precisely with a wage reform in the budgeted sector, where the first action was to raise the minimum wage and the minimum pension for retirees," Díaz-Canel stated.
The regime formalized the salary increase by raising the minimum wage in the budgeted sector from 2,100 to 3,210 pesos per month, a 53% hike benefiting over a million workers in Health, Education, Culture, and Public Administration. This adjustment is expected to cost the state budget approximately 42.5 billion pesos.
The rhetoric of social protection starkly contrasts with the economic reality on the island. With the dollar trading between 660 and 695 pesos on the informal market in July 2026, the new minimum wage amounts to a mere 4.65 to five dollars per month, far from sufficient to meet basic needs.
The disparity is staggering: an average household of two in Cuba requires around 61,710 pesos monthly to survive based on current market prices. A pound of rice costs 360 pesos, black beans are 450 pesos, and a liter of vegetable oil exceeds 2,000 pesos.
This is not the first instance of the regime following this pattern. In September 2025, a pension increase raised the minimum pension from 1,528 to 3,056 pesos, benefiting over 1.3 million retirees. By October of that year, that pension was worth less than nine dollars due to the rapid devaluation of the peso.
The official year-on-year inflation rate stood at 18.27% in June 2026, but independent economists estimate actual inflation is closer to 70% annually. Economist Pedro Monreal warned of the "ambiguities" in the reform package and cautioned that without clear targeting of the most vulnerable, the measures might exacerbate inequality.
The salary increase is part of a package of 176 measures approved by the National Assembly on June 18 and 19, 2026. Presented by Prime Minister Manuel Marrero Cruz, it is described as the most significant attempt at structural reform since the Special Period.
This package includes the authorization of private banking, the elimination of the universal ration book subsidy—existent since 1962—and the transformation of state enterprises into joint-stock companies, elements analysts describe as a neoliberal shift masked by socialist rhetoric.
Massive skepticism greeted the reform announcements among Cubans, while the U.S. government dismissed the measures as "superficial smoke signals," echoing those who see the package as a desperate bid by the regime to hold on amid mounting economic and political pressure.
Understanding Cuba's Economic Reforms
What are the key components of Cuba's recent economic reforms?
The reforms include a wage increase for the budgeted sector, an increase in pensions, authorization of private banking, elimination of the ration book subsidy, and transformation of state enterprises into joint-stock companies.
How has the international community responded to these reforms?
The United States has labeled the reforms as superficial, while many analysts see them as an attempt by the Cuban regime to maintain control amid economic and political challenges.