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We met the young hustlers cashing in on Cuba's booming black market

Millions of Cubans have turned to the underground economy to replace or supplement the meager wages of their state-sponsored jobs, as government employment on the communist island continues to pay notoriously poorly.
Photo par Enrique De La Osa/EPA

Sofía's living room is covered in clothes. Stacks of t-shirts and shorts line a faded plaid couch. Dresses are strewn across the counter, and an armchair cradles a small mountain of shoes. You can't see the floor.

The 30-year-old sits cross-legged amidst the merchandise, methodically folding a pile of baby clothes. She holds up a ruffled onesie. "This is cute," she says. "The government clothes are ugly, expensive, and fall apart."


A few years ago Sofía, who insists on using a false name, earned enough money selling clothing on the black market to purchase a plot of land in the outskirts of Havana, Cuba adjacent to her parent's house. She built her own home on it and shows off the shiny faux-wooden surfaces of the recently renovated floors in her living room and bedroom.

Sofía is among the millions of Cubans who have turned to the underground economy to replace or supplement the meager wages of their state-sponsored jobs. Government employment in the communist island pays notoriously poorly. Recent estimates from the Harvard Business Review show the average monthly income hovering around $20. Pensions can yield as little as $8 per month.

Sofía studied finance and economics for free at the University of Havana. Upon graduation, she took a job at a government gas station, working 24-hour shifts and taking two days off in between, but soon realized the wages she earned wouldn't produce the kind of life she wanted. She began looking for opportunities elsewhere, taking the cue from her father. A civil engineer, he quit his job developing the Havana waterfront for a more lucrative career giving taxi rides to tourists in his unmarked car.

'Most people work for the government and then are paid in this almost worthless money'

After months of persistence and repeated visits to the embassy, Sofía landed a visa that allowed her to travel to Ecuador, where she bought a fake Ecuadorian passport on the black market there. That passport allows her to travel freely between Cuba and other Latin American countries. She makes regular trips to the duty free zones in Panama and the Dominican Republic, where she buys clothing in bulk and smuggles them back home with a friend who works in the shipping industry.


"Everyone in town wants my clothes," Sofia says, beaming. "I have them in all sizes."

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Ted Henken, president of the Association for the Study of the Cuban Economy and author of Entrepreneurial Cuba: The Changing Policy Landscape, says nearly every Cuban resident touches the black market in some way.

Elderly men who buy newspapers each morning and resell them for a profit are so widely accepted they're known as viejos del barrio — the old guys from the hood. Import mules smuggle electronics in from overseas. Bartenders replace bottles of fancy rum with their own homemade moonshine and then peddle the leftovers.

"Everybody has a side hustle," he says. "It's the law of the jungle."

But Henken argues that the drive to hustle has exploded among Cuba's younger generation in recent years because millennials on the island were born after the start of the country's Special Period, when the collapse of the Soviet Union ushered in an era of extreme poverty and scarcity.

"Folks under the age of 30 have grown up in a system that's been in freefall for 26 years," he says. "They're likely to see wheeling and dealing as normal. They have less moral compunction against getting involved in the black market because they're less likely to believe in the ideals of socialism."

In 2010, Cuban President Raúl Castro introduced reforms that made it easier for entrepreneurs to obtain licenses to run their own businesses rather than continue to work for government entities.


'It's my dream just to see the United States, I wish we had Wal-Mart here'

According to Henken, the number of self-employed individuals has skyrocketed from 150,000 to half a million since the reforms. But, he adds, continued restrictions on the formal economy — such as the government monopoly of imports and exports and the longstanding US trade embargo — has inevitably meant the growth of the private sector has been accompanied by a ballooning black market.

Now, he explains, the current thawing of the island's relationship with the US is further encouraging the trend by making it easier for coveted dollars to flow in and out of the country.

Cuba operates on separate currencies for tourists and residents; tourist notes are pegged to the dollar, and the local currency is worth 25 times less than that. Government wages are paid in the local currency, rendering these salaries virtually useless compared to the dollars exchanged on the black market.

"Part of people's hustle is about getting access to dollars," Henken says. "Most people work for the government and then are paid in this almost worthless money. People often try to find their way into sectors where there's dollars floating around."

Even the shortest visit to Cuba today provides ample evidence of the extent to which the island's younger residents reap the benefits of a thriving black market.

In a nation where it can be impossible to find basic household items or food supplies in state-run stores, young people wear shiny watches and polo shirts. They carry iPhones that play music through fancy headphones.


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Underground swindles go mostly overlooked by authorities, no matter how above-ground they are in practice. According to Henken, every so often, law enforcement will crack down, rounding up offenders and throwing them in jail in an effort to reassert their power. But these instances are rare, and young hustlers have no qualms about operating in broad daylight.

Like Sofía, other young black market workers express a sense of pride about their own tenacity. Many have a defiant swagger and flagrant disregard for the existing systems that govern their country.

Alberto, 28, studied biochemistry at the University of Havana. He wears Nikes, a Rolex, and sells fake Cuban cigars to gullible tourists.

Rafael, 29, ferries tourists on his motorcycle between Matanzas, where he lives with his mother, and Varadero, a nearby beach resort to the northeast. He charges upwards of $40 per ride and says he hopes to save enough money to finagle a trip to the United States one day.

"America is the best there is," Rafael says. "They have everything over there."

For Rafael, Sofía and their peers, the US is more than just a source of cash flow. They regard their northern neighbor as an almost mythological place, a wealth of resources they can only dream of having access to. By comparison, they say, Cuba's offerings leave much to be desired.

"It's my dream just to see the United States," Sofìa says. "I wish we had Wal-Mart here. I can't imagine what that would be like."

Some names have been changed upon request.

Related: Bloody Money

Follow Carly Schwartz on Twitter: @carlicita