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Labour redeployment and cooperatives in the Soviet Union

Published online by Cambridge University Press:  17 August 2016

Silvana Malle
Università di Verona
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Policy approach towards employment has changed under perestroïka. The emphasis is falling on the release of labour from the material branches and on its partial redeployment in the service sector in general and in the cooperative sphere in particular.The pattern of labour redeployment, however, does not suggest that under perestroïka the labour market has become less taut. Since cooperative and individual activities draw out of the state sphere the best cadres, the inefficiency of the state economy could increase. Recurrent criticism against cooperatives and price control measures indicate that political and ideological barriers against private enterprise are still considerable.

Research Article
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1990

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1 See Pravo na poluchenie raboty”, Voprosy ekonomiki, 1989, no 2, p. 27 Google Scholar

2 Cf. the guide-lines of the Central Committee of the Soviet Communist Party on this issue in Izvestiia TsK KPSS, 1989, no 5, pp. 29-30, pp. 32-39, pp. 4143 Google Scholar.

3 Gosplan foresees that in 1990 some 200,000 workers—matching the estimated number of additional cooperative jobs—will be made redundant from construction-assembling works, following the decision to cut investment by 4%, see Ekonomicheskaia gazeta, 1989, no 40, p. 5 and no 42, p. 4Google Scholar.

4 That ‘extensive versus intensive growth’ has political rather than theoretical implications has been correctly pointed out by Chilosi, A., “La distribuzione nelle economie socialiste”, Rivista Internazionale di Scienze Sociali, 1974, Fasc. 5, p. 435 Google Scholar. Nevertheless, these attributes of growth can still be used as conventional designations to distinguish economies in which available resources represent the effective constraint to growth, from alternative models, in which, for instance, demand represents the effective constraint, see Komai, J., Contradictions and Dilemmas, Budapest: Corvina 1985, pp. 827 Google Scholar.

5 The meaning of labour-release in Soviet planning, as well as other policy tools mentioned in this paper, such as labour balances and productivity indicators are discussed in detail in Malle, S. Employment Planning in the Soviet Union. Continuity and Change, London: Macmillan, forthcoming 1990 CrossRefGoogle Scholar.

6 Moreover, it is unlikely that, under the present planning mechanism, underutilized labour within state enterprises represents a reserve which can be used for growth. This resource is necessary for the adjustment of short term imbalances caused by known planning and supply shortcomings at the micro level. On the perception and utilization of slack by Soviet managers, see Gregory, P., “Productivity, slack and time theft in the Soviet economy”, pp. 241278, in Millar, J. (ed.), Politics, work and daily life in the USSR. A Survey of former Soviet citizens, Cambridge: Cambridge University Press, 1987 CrossRefGoogle Scholar.

7 This approach to state employment dates back in the thirties. Strumilin, who may be considered the father of Soviet planning, believed that agricultural labour was underutilized and could be used as a labour reserve for the state economy without harm to personal consumption standards. Kondratev's arguments pointing out low land productivity in agriculture were not only disregarded, but contributed, sadly, to Kondratev's fate. See the reproduction of some Kondratev's and Strumilin's statements on these issues in EKO, “Zadachi sotsialisticheskogo rekonstruktsii1989, no 5, pp. 2636 Google Scholar.

8 On the local incentives to implement this law, see Belkindas, M., Privatisation of the Soviet economy under Gorbachev”, Berkeley-Duke Occasional Papers, n 14, April 1989, pp. 46 Google Scholar.

9 See on this concept, J. Kornai, op. cit., pp. 11-12.

10 See Malle, S., “Planned and Unplanned Labour Mobility in the Soviet Union Under the Threat of Labour Shortage”, Soviet Studies, 1987, n 3, pp. 378380 Google Scholar.

11 See Altmann, F. L.Employment Policies in Czechoslovakia”, in Adam, J. ed., Employment Policies in the Soviet Union and Eastern Europe, London, Macmillan, 1982, pp. 8286 Google Scholar; Adam, J., Employment and Wage Policies in Poland, Czechoslovakia and Hungary Since 1950, New York, St Martin's Press, 1984, pp. 180183 CrossRefGoogle Scholar and Degtiar, L. S., Trudovoi potentsial' obshchestva i sotsial'naia politika, Moskva, Nauka, 1984, pp. 9096 Google Scholar.

12 This approach is discussed in Malle, S., Soviet Labour-Saving Policies in the Eighties, The Soviet Economy: A New Course?, NATO Economic Colloquium 1987, Bruxelles, NATO, 1988, pp. 7483 Google Scholar. For the resolution on multi-shift regimes, see Ekonomicheskaia gazeta, 1987, no 10, p. 12 Google Scholar.

13 These regulations affected the period of notice for quits, the duration of admitted interruption between jobs, the possibility of transfer to a lower-paid jobs, regardless of function and specialization, etc., see Malle, S., Planned and Unplanned Mobility in the Soviet Union under the Threat of Labour Shortage, Soviet Studies, 1987, no 3, pp. 378380 Google Scholar.

14 Granick, D., Job Rights in the Soviet Union. Their Consequences, Cambridge, Cambridge University Press, 1987 Google Scholar.

15 Kornai, J. The Economics of Shortage, 2 vols, North Holland, vol. A, 1980 Google Scholar and Hanson, P., “The Serendipitous Soviet Achievement of Full Employment: Labour Shortage and Labour Hoarding in the Soviet Economy”, in Lane, D., ed., Labour and Employment in the Soviet Union, Brighton, Wheatsheaf Books, 1986, pp. 83111 Google Scholar.

16 Strumilin's account of the first Pive-Year plan is instructive on this point. See Strumilin, S.T., Problemy planirovaniia v SSSR, Leningrad, AN SSSR, 1932, pp. 142154 Google Scholar.

17 See the round table on demography ( Ekonomickeskaia gazeta, 1989, no 30, p. 17 Google Scholar) for a discussion of the shortage of skilled workers and wrong investment policies in Central Asia.

18 Pensions remain very low. In 1989 minimum pensions have been raised to 70 rubles a month, (below the necessary standard which the state budget was unable to finance), see Nouvelles de Moscou, 1989, no 33, p. 10 Google Scholar and Ekonomicheskaia gazeta, 1989, no 32, p. 1 Google Scholar.

19 The new policy approach is presented in Kostakov, V., “Zaniatosf : defitsit ili izbytok”, Kommunist, 1987, no 2, pp. 7889 Google Scholar.

20 For instance 0. Shkaratan, personal interview Moscow, August 1989.

21 Since 1930, the word unemployment (bezrabotitsa) has disappeared from Soviet planning lexicon see Porket, J.L., “Full Employment in Soviet Theory and Practice, Communist Economies, vol. 1, n 2, 1989, pp. 200-1CrossRefGoogle Scholar. Non-employment (nezaniatost') is used to indicate the difference between the estimated labour resources, based on the institutional definition of working age and working capability, and the estimated number of employed in the socialized (state and kolkhoz) economy. The average annual number of employed in the national economy is the result of the transformation of total worktime used in the state economy in man/days. The difference between the employment of individual workers (whether full time, part time, seasonal or temporary) and the estimated annual worktime employed in the economy may be appreciable and becomes evident only when the census (carried out every ten years) provides figures on individual employment. Leap years, extraordinary rest days due to celebrations, the holding of more than one job, etc., affect the volume of reported average annual employment. The crucial difference between nezaniatost' and unemployment in the Western meaning, however, is one of principle: nezaniatost' is an objective estimate based on “objective” (that is, political) definitions of labour resources and planned labour demand, while the concept of unemployment in the West implies “subjective” work preferences not matched by the demand for labour. This has only recently become a matter of discussion among Soviet experts. See for instance the round table on employment in Sotsialisticheskii trud, 1989, n 6, pp. 4860 Google Scholar and Zaslavskii, I., “Problemy zaniatosti: uroki istorii”, Sotsialisticheskii trud, 1989, no 3, pp. 5663 Google Scholar. Unemployment benefits approved in 1987 —equal to two or three months average wage in the case of redundancies or shut-down of firms— are low by Western standards. However, any possible extension of unemployment benefits to non-employed people requires a re-definition of unemployment taking into account the voluntary supply of labour.

22 SSSR i soiuznye respubliki v 1988g., Moskva: Finansy i statistika, 1989, p. 142 for the first time bad working conditions for women were blamed for the high child mortality in some Central Asian republics. See also “Pravo na poluchenie raboty”, op. cit., pp. 16-20

23 See Zaslavskaia, T., “Chelovecheskii faktor: balans tendentsii”, Sel'skoe khoziaistvo Rossii, 1987, n 2Google Scholar.

24 See the theses for discussion at the All Union conference on the radical economic reform, Ekonomicheskaia gazeta, 1989, no 43, pp. 45 Google Scholar.

25 See the law on cooperatives in Ekonomicheskaia gazeta, 1987, no 28, pp. 1015 Google Scholar, the law on individual activity in Vedomosti VS. SSSR, 1986, no 47Google Scholar and the project of law on property, Ekonomicheskaia gazeta, 1989, no 48, pp. 911 Google Scholar.

26 See Trud v SSSR. Statisticheskii sbornik, Moskva: Finansy i statistika, 1988, p. 41 Google Scholar. Given the autharchical organization of the Soviet firm and the plurality of services (from foodstuffs to repair-shops and every-day services, such as hair-dressing in some cases) provided to factory workers, it is not difficult to re-classify some workers of the non-productive sections to production sections and vice-versa, adapting the workforce structure to planners preferences. Non-production workers are statistically reported in their relative branches (trade, material supply, etc.) although their wages are paid with firm budgets.

27 The difference between total release and total addition (calculated from branch figures) is, in fact, of 278,000 workers, i.e. twenty thousand units less than the total reported for the state economy. Non reported branches (the army?) could perhaps explain this difference.

28 The employment of scientific workers is still limited in the main scientific areas (Leningrad and Moscow, towns and oblasti). See Ekonomicheskaia gazeta, 1988, no 31, p. 24 Google Scholar.

29 Industrial employment, as a matter of fact, has diminished also in the excess-labour Republics of the Northern Caucasus and Central Asia (except Uzbekistan), as one can estimate from output and productivity figures published in Ekonomicheskaia gazeta, 1989, no 32, p. 13 Google Scholar.

30 To prevent labour outflows in 1988, Minaviaprom (a branch of the defense industry) has authorized wage increases against central guide-lines on wage-productivity relations. See Ekonomicheskaia gazeta, 1989, no 30, p. 9 Google Scholar. The nominal wage outburst of 1988-89 also suggests that adjustment of military priority branches to civilian production, given the present price structure, is more difficult than expected and is becoming an autonomous factor of open inflation.

31 See Sotsialisticheskii trud, 1989, no 7, p. 92 Google Scholar. Labour shortage is particularly evident in female labour intensive branches. The executive committees of Moscow, Ul'ianov, Briansk, Komerov, Tiumen and Chitinski, as well as the Moscow Soviet and the Krasnoiarsk O rai, have been summoned to find the necessary labour, see Sovetskaia Rossiia, 8 August 1989. Indirect evidence of the failure to stimulate labour release with present policies is also offered by the fact that administrative measures against firms which do not adopt advanced technology have been planned by the Moscow Soviet to take place in 1991 and that some firms on leasing terms have to pay charges on labour resources, although they are exhonerated from charges on fixed capital. See Nouvelles de Moscou, 1989, no 31, p. 14 Google Scholar and Ekonomicheskaia gazeta, 1989, no 38, p. 11 Google Scholar.

32 I. Zaslavskii, “Problemy zaniatosti”, cit., presents an instructive outline of the steps which characterized the authoritarian shaping of Soviet industrial relations.

33 In the case of production necessity (a recurrent event in Soviet practice) any worker may be transferred to other jobs. A worker may be punished for violating labour discipline by being transferred for some time to a lower ranking job. Many forms of intra-factory redeployment do not require workers' consent. When the consent is required by law, it may be tacit. See S. Malle, “Planned and Unplanned Labour mobility”, op. cit., pp.373-4, 379.

34 The refusal to accept these changes exposes workers to the effects of the law on labour discipline. See Biulleten' Verkhovnogo Suda SSSR, 1988, no 3, p. 11 Google Scholar and Pankin, M., “Novoe v zakonodatel'stve o trude”, Sotsialisticheskii trud, 1988, n 4, p. 66 Google Scholar.

35 See Sovetskoe trudovoe zakonodatel'stvo, Moskva: Iuridicheskaia literatura, 1987, p. 72 Google Scholar.

36 54% of worker's collectives are not even informed about hiring and firing decisions. See Andreenkova, N.V. and Krotov, P. P., Soviet trudovogo kollektiva i demokratizatsiia upravleniia, Moskva, AN SSRR, ISI-SSA, 1989, p. 39 Google Scholar

37 One should stress that strikes in these branches have also been motivated by the worsening shift regimes for which no sufficient compensation was offered. In coal mining, for instance, the official 40% night shift wage supplement was not even awarded in many cases (A. Kotliar, personal interview, August 1989)

38 See Koshanov, A.K. (ed.), Vysvobozhdenie rabochey sily v usloviiakh intensi-fikatsii proizvodstva (na materiali Kazakskoi SSSR), 1988, pp. 147-8Google Scholar.

39 See Ekonomicheskaia gazeta, 1989, no 40, pp. 89 Google Scholar.

40 See Literaturnaia gazeta, 1988, June 29, p. 11 Google Scholar.

41 See Nouvelles de Moscou, 1989, no 33, (13 August), p. 10 Google Scholar.

42 See Ekonomicheskaia gazeta, 1989, no 35, p. 6 and no 42, p. 4Google Scholar

43 See Adirim, I., “A Note on the Current Level, Pattern and Trends of Unemployment in the USSR”, Soviet Studies, 1989, no 3, p. 460 Google Scholar.

44 In some towns of Central Asia, one hour of work in loading and unloading is worth 80 rubles. A good construction worker earns 150 rubles a day, i.e. about halfa monthly state wage, see Nouvelles de Moscou, 1989, no 36, pp. 89 Google Scholar. In Uzbekistan, where most unemployment is allegedly concentrated, each year 8-10th. grade students are mobilized to pick cotton. See Popov, V.V. and Shmelov, N.P., “Plan i ekonomika”, Znanie: Ekonomika, 1988, no 11, p. 11 Google Scholar

45 This is still true according to A. Kotliar, (interview, 15.8.1989). According to V. Buynovskyi, Deputy Director of the State Committee for Labour, the service sphere is short of 13 million people, see SWB, 22.1.1988 Google Scholar.

46 The number estimated by Gosplan for 1990 was 1.2 million full time workers. This figure had been overshot already by July 1989. Ekonomicheskaia gazeta, 1989, no 37, p. 15 Google Scholar.

47 See Sitarian'S, S. comment in Ekonomicheskaia gazeta, 1989, no 42, p. 16 Google Scholar

48 See SSSR v tsifrakh v 1988, Moskva, Finansy i statistika, 1989, p. 183 Google Scholar

49 A private truck transport service in a rural area can yield up to 1,200 rubles a month, about six times the USSR average state wage (interview with N. Andreenkova, 8 August,1989).

50 More precise estimates need to take into account the number of working-age women with more than 3 young children and the number of invalids and army servicemen. However, employment figures also include old-age pensioners (more than ten million for the country as a whole) and overtime, which should be deducted from total employment in working out meaningful estimates of participation rates of able-bodied people

51 See Koriagina, T., a senior official of Gosplan, reporting on the underground economy, Nouvelles de Moscou, 1989, n 34 (20 August), p. 10 Google Scholar. For “Aslund's law” according to which private firms grow together with the growing underground economy, see Aslund, A., Private Enterprise in Eastern Europe, New York, St. Martin's Press, 1985, pp. 216-28CrossRefGoogle Scholar, and Hanson, P., “Von Mises' Revenge”, Paper presented at the Conference on The Socialist Enterprise between Autonomy and Constraints”, Padua, 11-12 September 1989 Google Scholar.

52 For which I am indebted to Dr. S. A. Vasiliev (Leningrad university)

53 See Pravda, 10 August, 1989 and Ekonomicheskaia gazeta, 1989, no 19, p. 5 Google Scholar.

54 Interview with O. Shkaratan, Moscow, August 1989.

55 As argued by G. Grossman (see his paper “Private and Cooperative economic Activities”) at the 1989 NATO Economic Colloquium Brussels. See also the Report for the 1990 Plan presented by Voronin, L.A., vice-president of the Council of Ministries of the USSR, Ekonomicheskaia gazeta, 1989, no 4, p. 5 Google Scholar.

56 At the June 7th 1989 Peoples Deputies Congress, M. Ryzhkov, the president of the USSR Council of Ministers, stressed that many people wished cooperatives in trade and services to be shut down. See Ekonomicheskaia gazeta, 1989, n 24, p. 4 Google Scholar.

57 According to this source, 25% of the total number of cooperatives and 33% of the total number of cooperative members engage in speculative activities, see Ekonomicheskaia gazeta, 1989, no 31, p. 9 Google Scholar.

58 Tax liabilities approved by a Ukaz in March 1989 were definitely of a punitive nature. Tax rates were highly progressive and fell on gross revenue. In 1989, after some corrections to a new Ukaz of February 1989 approved by the Supreme Soviet of the USSR, some limits to fiscal policy vis-à-vis the cooperatives were established. They leave, however, much scope for arbitrary tax policy. The approved amendments authorize the deduction of fixed capital expenditure, training costs and other fees paid to the state from before-tax revenue. Tax rates are approved by republic laws, but cannot exceed 35% of the taxable cooperative revenue, except in the case of trade, purchasing, catering, intermediation, and entertainment (own italics). See M. Belkindas, op. cit., pp. 46-48, Ekonomicheskaia gazeta, 1989, no 37, p. 15 Google Scholar.

59 See Ekonomicheskaia gazeta, 1989, no 26, p. 16 Google Scholar and La Stampa, 18 October 1989, p. 7 Google Scholar.

60 The federal congress of cooperatives in Moscow suggested that cooperatives harassed by local Soviets should become filialy of other cooperatives located in more friendly Republics. See Nouvelles de Moscou, 1989, no 28 (July 9), p. 2 Google Scholar.

61 Interviewed in Moscow, 18 August 1989.

62 One example is the medical cooperative in Moscow central Arbat, offering a wide range of specialized diagnostics and treatment, highly rated by Moscovites. However, some medical cooperatives were closed down by the Ministry of Health. See Nouvelles de Moscou, no 15 (9 April), p. 12 Google Scholar.

63 See Ekonomika i zhiano, 1990, no 12, p. 5 Google Scholar.

64 A sign of this development may be the starting of exhibitions of consumer goods in Estonia, see Ekonomicheskaia gazeta, 1989, no 28, p. 19 Google Scholar.

65 See Pravda, 20 August 1989, p. 2 Google Scholar.

66 Hanson, P., “Von Mises' Revenge”, paper presented at the International Conference on “The social enterprise between autonomy and constraints”, Padua, 11-12 September 1989 Google Scholar

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