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The Meaningfulness of Soviet Retail Prices

Published online by Cambridge University Press:  25 January 2017

Doris Pullman Lomberg
Affiliation:
School of Home Economics, College of Agriculture, University of Wisconsin
Lynn Turgeon
Affiliation:
Hofstra College

Extract

The relatonship between wage and price levels is clearly an appropriate subject for study in a number of comparisons of relative wellbeing. In measuring real wage changes within any economy, for example, we must measure the relative changes in these two levels over a specified time period. If there has been no drastic change in the number of dependents per wage earner, the measure of real wage changes should ordinarily give us some indication of the change in the level of living. Likewise, a study of the relationship between wage and price levels in two economies as similar as those of the United States and Canada would also seem to produce meaningful results. But what happens when we attempt to compare price and wage levels for economies where the institutional differences are very considerable?

Type
Research Article
Copyright
Copyright © Association for Slavic, East European, and Eurasian Studies 1960

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References

1 See, for example, Nash, Edmund, “Purchasing Power of Soviet Workers, 1953,“ Monthly Labor Review, July, 1953, pp. 705–08 Google Scholar, Cf., also, the earlier studies of Kravis, Irving B. in ibid., November, 1949, and February, 1951.Google Scholar

2 See Norman Kaplan, M. and Eleanor S., Wainstein, “A Comparison of Soviet and American Retail Prices in 1950,” Journal of Political Economy, December, 1956, pp. 470–91;Google Scholar also, “A Note on Ruble-Dollar Comparisons,” ibid., December, 1957. See also a similar ruble-pound sterling ratio computed by Alec Nove, “The Purchasing Power of the Soviet Ruble,” Bulletin of the Oxford University Institute of Statistics, Volume 20, No. 2, 1958. To the extent that British institutions resemble to a greater extent those of the USSR, ruble-pound sterling ratios would seem to be more meaningful than those of Kaplan and Wainstein.

3 Transportation and housing are included in the Kaplan-Wainstein computations. Although mention is made of such factors as the number of workers per family, taxation, and free health services, no precise evaluation is made of their impact on real wages or levels of living in the two countries.

4 See United Nations, Economic Survey of Europe in 1958 (Geneva, 1959), Chapter IV.Google Scholar

5 See Pravda, September 9, 1956, p. 1. The minimum wage now ranges from 300 to 350 rubles per month (in rural areas, it is as low as 270 rubles per month). The wages of these workers and employees were supposedly increased by one-third and the total cost o£ this increase to the government budget in 1957 was put at about eight billion rubles. It can be estimated that the wage increase amounted to about 1,000 rubles per subsistence worker per annum. The percentage of the labor force living at or near this subsistence level is surprisingly high. Occupations of those whose earnings are near this minimum amount might be the following: guards, maintenance personnel, firemen, messengers, domestic servants, street sweepers, and possibly some students on stipends. In addition to receiving the minimum wage, some of these individuals undoubtedly also share in bonuses distributed by the enterprise to which they are attached.

6 It should be emphasized that the present calculation excludes those employed in agriculture. Levels of living for these persons in both countries are believed to be considerably lower than they are for urbanites. Rural inhabitants, of course, constitute a considerably lower percentage of our total population than they do in the Soviet Union.

7 At present roughly five million children are accommodated in kindergartens, nurseries, and children's homes.

8 We are aware that a fair number of urban families earn incomes of less than $3,000 in some years, but feel that welfare payments, dissaving, or gifts would bring total gross disposable income for all but a statistically insignificant minority up to this assumed subsistence level. In New York City, for example, one-sixth of the families on home relief in 1959 had a fully employed family head. A similar reservation would also be in order with respect to the assumed Soviet subsistence family income.

9 See Leon M., Herman, “The Seven-Year Haul,” Problems of Communism, Volume VIII, No. 2 (March-April, 1959)Google Scholar. Average workers’ wages are scheduled to rise from 785 to 990 rubles per month between 1958 and 1965.

10 Central'noe statisticheskoe upravlenie pri sovete ministrov SSSR, Narodnoe khozjajstvo SSSR v 1956 godu-statisticheskij ezhegodnik. Gosstatizdat (Moscow, 1957). p. 218.Google Scholar

11 Central'noe upravlenie narodno-khozjajstvennogo ucheta gosplana SSSR, Trud v SSSR-statisticheskij spravochnik (Moscow, 1936), p. 342.Google Scholar

12 In Czechoslovakia, where women constitute about 42 per cent of the labor force, there were about 1.5 persons employed per household in 1956. See Statisticky obzor, No. 11, 1958, p. 503 Google Scholar. The social and economic pressure driving women into the labor force in Czechoslovakia has probably been less due to generally higher Czech levels of living.

13 Bureau of Census, U. S. Department of Commerce, Current Population Reports- Consumer Income Series, P-60, No. 30, December, 1958 Google Scholar.

14 Zverev, A. G., Voprosy nacional'nogo dokhoda i finansy S.S.S.R., Gosfinizdat (Moscow, 1958), p. 152 Google Scholar.

15 See U. S. Department of Labor, How American Buying Habits Change, U. S. Government Printing Office (Washington, 1959), p. 167.Google Scholar

16 Ibid., p. 232.Google Scholar Estimated 1956 expenditures for these items are about the same for food and clothing and somewhat higher for personal care and recreation.

17 United Nations, op. cit., Chapter IV, p. 22.Google Scholar In Poland, workers in the lowest income group spent 64.9 per cent of their income for food and beverages.

18 One recent traveler in the Soviet Union reports that a family with considerably above average income was spending 32 rubles daily for food.

19 Tsentral'noe statisticheskoe upravlenie pri sovete ministrov S.S.S.R., Narodnoe khozjajstvo S.S.S.R. v 1956 godu—stattsticheskij ezhegodnik, Gosstatizdat (Moscow, 1957), p. 229 Google Scholar.

20 Additional sources of income for purchasing durable consumer goods would come out of past savings referred to above.

21 Occupational wage differentials might be somewhat different in the two countries. In both economies engineering and technical personnel would be paid above average, while unskilled workers would be found near the subsistence margin. Coal miners on the average are among the better paying occupations in both economies.

22 There seems to be some possibility that children's apparel may be among the first items to be distributed according to communist principles, that is, according to need.