SOVIET-ERA WORKERS
In the Communist era, workers received pay and benefits that depended on the place of employment, skill level, Communist Party status and other factors. A typical worker in the mid 1980s earned 210 rubles a month. Among those who received high pay were water transport workers who received 287 rubles a month. Among the lower paying jobs were “cultural work” that paid 123 rubles a month. Bonuses were given for working in harsh places like the Arctic (but the cost of living was often higher in these places too).
Benefits enjoyed by most workers included housing, health care, day care, vacation sites and even the right to purchase luxuries such as cars. These benefits were denied people who were unemployed, retired or worked in the private sector.
In the mid 1980s, 63 million people were employed in the manufacturing and service sectors and about 4.5 million worked on collective farms. They made up 81 percent of the workforce. The remainder were unemployed, not working or engaged in the private sector. Of those employed, 42 percent were in industry and construction, 14 percent were in agriculture and forestry; 10 percent were in transportation and communications; 8 percent were in trade and food services; 18 percent were in health, physical education, social security and science; 3 percent were in government administration; and 5 percent were in housing and miscellaneous.
A man at a restaurant who had developed a new method of making Russian pancakes was refereed to as an "engineer technologist” not a chef. Workers in Siberia earned the equivalent of $350 a months, a high salary by Russian standards. These workers spent their paychecks as quickly as they got them. It was pointless to save; inflation gobbled up savings.
Workers After the Collapse of the Soviet Union
As of 1999, the Russian government employed 40 million of Russia’s 67 million workers. By that time though many workers had been put on unpaid leave or had their schedule drastically reduced. Once thriving economic centers were declared "economic catastrophe" zones. Many people continued working without seeing their pay checks for months. When the checks did arrive they were about $100 a month. People kept their Soviet-era job to keep the perks and benefits such as apartments and garden plots. Many families subsisted entirely on food grown in their gardens or purchased with coupons provided by their employers.
Some professional positions that are accorded high prestige carry a salary below that for certain categories of skilled labor. The upper echelons of the political, artistic, and scientific elites form the top of the occupation pyramid in terms of status and income. That category is followed by the professional, intellectual, and artistic intelligentsia; the most highly skilled industrial workers; white-collar workers; relatively prosperous farmers; and average workers. The bottom of the status and pay scales includes people employed as semiskilled or unskilled workers in light industry, agriculture, food processing, education, health care, retail trade, and the services sector. Among the low-paying jobs are some that require higher or specialized education and that carry some level of prestige. Women predominate in these job categories, which include engineers, veterinarians, agronomists, accountants, legal advisers, translators, schoolteachers, librarians, organizers of clubs and cultural events, musicians, and even doctors. [Source: Library of Congress *]
Some Russians believed that if the Germans and Japanese could rebuild their nations after World War II then they too could do it. Others had their doubts. On the Russian work ethic, presidential candidate and former general Alexander Lebed told Newsweek: "They ask a Japanese worker: 'How do you work. The Japanese says: 'I spend four hours working for myself, two hours working for my boss and two hours working for Japan.' Then they ask the Russian worker the same question. He replies: 'I spend four hours working for myself, we don't have a boss and why should I work for Japan.'
Younger Russians were not so cynical. One teenager told the New York Times in 2003: “It’s easy to find work in Moscow now. You have to show initiative, but you can advance without personal connections to the boss.”
Poor Salaries and Unpaid Wages in Post-Soviet Russia
The real incomes of state-sector employees fell as much as 30 percent in the first three quarters of 1995. Wages in the private sector have kept pace with inflation more consistently, unless an enterprise has financial difficulties such as debts owed to other enterprises. In both sectors, long-term failure to pay wages has become a chronic problem; it affected an estimated 13 million people in mid-1995. Enterprises also have responded to financial difficulties by laying off employees and by shortening work weeks, pushing more workers below the poverty line. Although many of the working poor retain the housing, health, and free holidays associated with employment, enterprises are rapidly withdrawing those Soviet-era privileges.[Source: Library of Congress *]
The average income for most Russian workers in the early 1990s was around $100 a month, although many earned some undeclared income on the side. For those who earned $25 a month a new winter coat could eat up seven months of wages. Six months of pig feed—a common purchase in many places—consumed three months.
Things got worse after the ruble collapsed in 1998. In 1999, the average monthly wage was about $50 and the average monthly pension was $20. In some places a factory worker made $16 a month and a history teacher, $12 a month. Even though wages were outrageously low the government was so short of cash, many people went months even years without getting paid.
Workers in all fields routinely went three months without getting paid. Many employers were owed more than they owed, with the chances being slim that they would collect what was owed to them. Sometimes people said they only got paid when an election was coming. It was surprising that anyone showed up for their job considered their salaries are worth next to nothing. But still life went on. The streets still got cleaned and the bureaucrats still created red tape. [Source: Mike Edwards, National Geographic, March 1993]
In one often told joke Yeltsin commented to his economics mister that it was amazing that scientist kept coming to work even they got no salaries and there was no electricity for their experiments. His minister replied: "maybe we can charge them admission."
Products Instead of Wages
Many companies paid their workers with products, which they could then sell or barter. Tire factory workers got tires. Tool makers got drills. Things like drills weren't in high demand and the market quickly become saturated and workers just end up with a lot of drills. In 1998, teachers in the Altai region of southern Siberia were offered toilet paper and coffins instead of their salaries but held out for a better offer, which they finally received: 15 bottles on vodka each.
Some workers did okay. In 1997, workers at a brassiere factory were paid 33 to 42 bras a month, which they were able to sell on the streets for $21.15 a piece. Workers were sometimes paid in goods that their companies obtained in barter transactions. Sometimes they got food stuffs; other times they got televisions, clothes and even sex toys. The workers in turn sold the goods for money or bartered them for things they needed.
In rural areas, salaries were sometimes paid in fertilizer and rat poison or "checks"—pieces of paper that looked like business cards and were accepted at local shops instead of currency. Many worker were happy to receive manure which they could use to fertilize their gardens.
The Tutayev Engine Factory, which went from producing 12,000 diesel engines a year in the 1980s to 222 engines in 1998, welcomed it workers every day but paid them virtually nothing. The factory lost money and produced nothing but still the workers come. Instead of paychecks the workers at Tutayev received coupons which they could use to buy bread and food like dumplings, fish cutlets and potatoes at the cafeteria. Workers use the coupon to buy enough food to take home for their families to eat. The coupons are also accepted like currency in town to buy other kinds of food. [Source: Maura Reynolds, Los Angeles Times, March 29, 1999]
Moonlighting in Post-Soviet Russia
The economic condition of many Russians was ameliorated by earnings from additional jobs or by access to private plots of land. In a 1994 survey, 47 percent of respondents reported some form of additional material support, and 23 percent reported having supplementary employment. In some cases, unofficial employment was quite profitable. Of the "working unemployed," Russians who consider themselves out of work but nevertheless hold some sort of job, 11 percent had incomes at least three times higher than the average wage in 1994. The large number of pensioners with unofficial jobs (approximately one in four) generally fare much better than those on fixed incomes, generating a disparity of status within the oldest segment of society. [Source: Library of Congress, 1996*]
The easing of travel restrictions in post-Soviet Russia and the overall diversification of the private sector increased opportunities to earn supplementary income, through such activities as buying goods abroad and selling them inside Russia and offering a variety of private services such as repair work, sewing, and translation. In general, these opportunities are most accessible to young, well-educated Russians in large cities. But in many cases, well-educated individuals must sacrifice their social status by accepting unskilled jobs to make ends meet. *
To supplement their meager incomes, university professors worked as taxi drivers, literary critics delivered pizzas and geologists cleaned people's homes for $40 a day (the equivalent of two weeks salary). Moscow teachers sold old clothes on evenings and weekends to make ends meet. Many employers gave their workers flexible schedules so they could fit in their second jobs.
In the early 1990s, taxi drivers had among the best jobs in Russia. On a good day a driver could make $30 chaffering around an American journalist or Japanese and German businessman. That was twice the monthly salary of a mid-level bureaucrat. Russian ambulance often made extra money moonlighting as taxi drivers. [Source: Mike Edwards, National Geographic, March 1993 ♠]
Even political figures tried to cash in in the market economy. Roy Medvedev, a former dissident, charged a set fee for interviews with foreign journalist. Painters also began catering to the demands of the market place. One artist known for his paintings of factories and peasants churned out nothing but paintings of nude women in the 1990s.
Worker Benefits in Russia
Among other benefits provided by enterprises to their workers are access to special shops that sell subsidized milk for families with low incomes and small children and an allowance to children for the purchase of a school uniform when they start school and again at the age of thirteen. Other regulations focus more specifically on families with small children. These include protective legislation prohibiting the dismissal of pregnant women or women with children under the age of three, banning night work and overtime for mothers of small children, stipulating workload concessions to pregnant women and mothers of young children, and providing flextime, part-time work, home-based employment, nursing intervals, and additional paid and unpaid leave to mothers to care for sick children. Many workplaces also permit informal leave arrange-ments for the purpose of food shopping. [Source: Library of Congress, July 1996 *]
A significant portion of Russian workers have entitlements to housing, child care, and paid vacations, regardless of their rank within an enterprise. Housing entitlements involve either outright provision of a low-rent apartment (most apartment rents are very low) or various forms of cash or in-kind assistance. Moreover, occupants obtain an implicit ownership right extending beyond their term of employment. They may also have the legal title of the apartment transferred to their own names without paying any purchase price. *
Besides housing allowances, most large and medium-sized enterprises provide on-site medical facilities or they contract for outside health care facilities for their employees. The medical care provided through the auspices of enterprises is free and often is of much higher quality than the care available in government-run facilities. Finally, enterprises provide their employees with goods ranging from foodstuffs to consumer durables. The enterprises procure these items through direct purchase, barter, or from their own farms, and make them available at below-market prices. *
The Social Insurance Fund is the administrative mechanism for payments to workers of birth, maternity, and sickness allowances, and child allowances for children between the ages of six and sixteen. The fund is managed by the largest union organization in Russia, the Federation of Independent Trade Unions of Russia (Federatsiya nezavisimykh profsoyuzov Rossii — FNPR) and serves as the repository of enterprise contributions consisting of 5.4 percent of the total payroll . Nominally an independent institution since its establishment in 1991, the Social Insurance Fund is in fact responsible to the FNPR. *
In 1993 an overhaul of the fund's administrative structure began as a result of enterprises' low levels of compliance with contribution requirements, charges of serious abuse by trade union officials, and the government's desire to promote democratic accountability. Since 1993 the management system has been in flux, and the quality of administration varies considerably throughout the country. Most worker contributions to the fund are retained by the enterprise for distribution. About one-half of the money goes to sick pay and one-fifth to subsidize treatment at sanatoriums. Family support includes birth and maternal allowances intended to replace lost wages, but child allowances do not address poverty directly because payments are not in proportion to household income. *
Maternity Leave and Child Allowances in Russia
Women who have an employment contract are entitled to paid maternity leave from seventy days prior to giving birth until seventy days afterward. Maternity leave benefits are based on the minimum wage rather than on a woman's current wage, however. Russia also provides a maternity grant, which is a onetime payment totaling three times the minimum wage or 45 percent of the minimum wage in the case of mothers who have worked less than one year. In order to receive a maternity allowance (or sickness benefits), a woman must have an employment contract. The maternity allowance amounts to 100 percent of the mother's salary, regardless of her length of employment. [Source: Library of Congress, July 1996 *]
Maternity allowances in Russia are followed by a monthly child allowance of 80 percent of the minimum wage in the case of children up to eighteen months old. This allowance may be supplemented by a child-care allowance, set at 35 percent of the minimum wage, to compensate for earnings lost in the course of caring for children in this age bracket. The latter allowance is paid to mothers over the age of eighteen who have been in the labor force at least one year. An additional compensatory child-care allowance, equivalent to 35 percent of the minimum wage, is available to mothers or other caretakers of children under the age of three. *
Russia also has an extended child allowance of 45 percent of the minimum wage (60 percent for children of military personnel, children living with a guardian or in an orphanage, and children with AIDS) to assist families with the care of children between the ages of eighteen months and six years. Single mothers and those who receive no child support from the father of their child may obtain an additional 45 percent of the minimum wage up to their child's sixth birthday; this figure is then increased to 50 percent and remains effective until the child is sixteen. In May 1992, special cost-of-living compensations were introduced to cover the increased expense of meeting children's basic needs. These compensations ranged from 30 percent of the minimum wage in the case of children less than six years old to 40 percent in the case of those ages thirteen to sixteen. *
Russia also has an overall system of family benefits. These can be grouped into three broad categories: those payable to all families with children, regardless of income or other qualifying conditions; those payable to working mothers; and those payable to disadvantaged families. *
Unemployment Compensation in Russia
The communist system, for all its economic and moral deformities, provided virtually universal employment, so that every able-bodied citizen had an opportunity to earn income and thus social security. In postcommunist Russia, the phenomenon of unemployment is openly acknowledged and growing. At the end of 1995, some 8.2 million people were registered as unemployed, indicating a far higher actual number. Three years earlier, about 5 million were registered. The "new poor," in the parlance of the World Bank, put a considerable strain on the resources available in Russia for social welfare. [Source: Library of Congress, July 1996 *]
Relatively few unemployment checks were given out because people stayed at their old jobs even though they didn't get paid. Officially Russians who have worked for 12 consecutive weeks and lose their jobs receive 75 percent of their average pay for the previous two months for 12 weeks, then 60 percent for the next four months; then 45 percent for the next year. Another 10 percent is provide for each dependent. They are entitled to a minimum monthly pay for year paid for with a 2 percent payroll tax. Few unemployed people saw these benefits.
Administered by the Ministry of Labor, the Employment Fund, which is financed by a 2 percent payroll tax from all enterprises, disburses compensation to jobless people. The level of compensation, already low in 1995, was expected to drop further if unemployment rose. As part of its assistance package to Russia, the World Bank is providing a computerized system that will help the country register claimants for unemployment and pay adequate benefits. *
The Ministry of Labor's subsistence minimum is based on the cost of nineteen staple items considered sufficient to ensure survival, plus an estimated minimum cost for utilities, transportation, and other necessities. The calculation varies according to age-group and region; trade unions use other formulas that usually expand the number of people identified as living below the poverty line. In early 1996, the State Duma considered a law that would make the Ministry of Labor's figure the legal basis for establishing minimum wages, pensions, and other levels of social support. Barring such legislation, the subsistence minimum has no legal status. *
Working Woman in Russia
Women predominate in low-paying jobs that require higher or specialized education and carry some level of prestige. These jobs include engineers, veterinarians, agronomists, accountants, legal advisers, translators, schoolteachers, librarians, organizers of clubs and cultural events, musicians, and even doctors. A 1994 World Bank report identified an increasing likelihood that positions offering lower wages would be filled by women, in most sectors and occupations of the Russian economy. Many women, however, reportedly accept jobs at lower levels of skill and remuneration in exchange for nonmonetary benefits, such as short commuting distances, minimum overtime hours, and access to child care or shopping facilities in the workplace. [Source: Library of Congress, 1996*]
Women have traditionally been in charge of selling agricultural goods in the markets. In the mid 1980s, women made up of 52 percent of the work force. Many were stressed out from working at their jobs and doing chores at home after work. In the 1970s, women made up about half of the Soviet Union's work force. About 80 percent of Soviet women between the ages of 20 and 25 worked full time. The majority of them held positions such as secretaries and factory workers. Women comprised more than more than half of the Soviet Union's doctors, economists and teachers and one third of its engineers, lawyers and judges.
The Soviet constitution of 1977 stipulated that men and women have equal rights, and that women have equal access to education and training, employment, promotions, remuneration, and participation in social, cultural, and political activity. The Soviet government also provided women special medical and workplace protection, including incentives for mothers to work outside the home and legal and material support of their maternal role. In the 1980s, that support included 112 days of maternity leave at full pay. When that allowance ended, a woman could take as much as one year of additional leave without pay without losing her position. Employer discrimination against pregnant and nursing women was prohibited, and mothers with small children had the right to work part-time. Because of such provisions, as many as 92 percent of women were employed at least part-time, Soviet statistics showed. [Source: Library of Congress, July 1996 *]
Working women continue to bear the "double burden" of a job and family-raising responsibilities, in which Russian husbands generally participate little. In a 1994 survey, about two-thirds of women said that the state should help families by paying one spouse enough to permit the other to stay at home. Most women also consider their role in the family more difficult than that of their husband. Such dissatisfaction is a factor in Russia's accelerating divorce rate and declining marriage rate. In 1993 the divorce rate was 4.5 per 1,000 population, compared with 4.1 ten years earlier, and the marriage rate declined from 10.5 per 1,000 population in 1983 to 7.5 in 1993. In 1992 some 17.2 percent of births were to unmarried women. According to 1994 government statistics, about 20 percent of families were run by a single parent — the mother in 94 percent of cases. *
Often women with families are forced to work because of insufficient state child allowances and unemployment benefits. Economic hardship has driven some women into prostitution. In the Soviet period, prostitution was viewed officially as a form of social deviancy that was dying out as the Soviet Union advanced toward communism. In the 1990s, organized crime has become heavily involved in prostitution, both in Russia and in the cities of Central and Western Europe, to which Russian women often are lured by bogus advertisements for match-making services or modeling agencies. According to one estimate, 10,000 women from Central Europe, including a high proportion of Russians, have been lured or forced into prostitution in Germany alone.
Outsourcing and Foreign Workers
After the break up of the Soviet Union, thousands of Russian workers migrated to Poland and Germany and other European cities to work as "guest workers."
India, China, Russia and the Philippines all became major sources of labor outsourcing. The industry grew from $4 billion in 2000 to over $104 billion by 2014, generating millions of jobs. Russia gets a lot of outsourcing work from the United States. In the early 2000s, a computer programmer costs $30,000 head in Russia, compared to $20,000 per head in Vietnam, $30,000 per head in Romania and $40,000 in India. Those from Russia were regarded as the most skilled and educated.
As bad as the economy has been in Russia, the economies of Belarus, the Ukraine and other former Soviet states have been even worse. Thousands of Belarussians and Ukrainians and people from the Caucasus migrated to Moscow in search of work. One Ukrainian bus driver told the Washington Post he earned about $15 for 250 hours of work in the Ukraine compared to $250 for 180 hours in Moscow.
In the mid-1990s there were so many foreign workers in Russia that Yeltsin issued a decree with the aim of preventing their exploitation. South Korean textile firms in Vladivostok used Russian and Chinese workers working six days a week for as little as 11 cents an hour (and an average of 56 cents an hour).
North Korean Workers in the Russian Far East
North Korea has earned foreign currency by farming out labor to logging, mining and agricultural interests in Siberia. It was estimated that there were 10,000 to 30,000 North Korean workers working in the Russian Far East in the 1990s, with around 3,000 working in the Vladivostok area and 15,000 workers toiled under slavelike conditions in Khabarovsk. [Sources: New York Times, Washington Post]
The North Korean workers usually work in Siberian mines, logging camps and cabbage farms. Russian companies prized North Korean laborers who are willing to wok hard for little pay (usually between $2 and $15 a day). The workers were watched by North Korean security agents who wouldn't allow the workers to talk to anyone. Married men with children were chosen because they were less likely to defect. In their time off the took part in political study sessions and were required to log any interactions with outsiders in a special book.
The North Koreans often worked 14- or 15-hour days and sometimes slept 20 to a room in abandoned building with pictures of Kim Il Sung and Kim Jong Il but no running water or electricity. They often wore black Lenin caps and Kim Il Sung lapel buttons. Sometimes they lived in prison-like concrete dormitories specially wired to Pyongyang to pick up propaganda broadcasts. North Koreans built the camps and installed their own security. Russian police were not let in. There were stories about executions and corpses being carried out.
A Russian governor told Mary Jordan of the Washington Post, "We do know that their leaders take their money and leave them only enough to survive. Sometimes they commit crimes hoping to be put in jail because they prefer to stay in Russian prisons...compared to where they come from, it's like a paradise for them."
The North Koreans regard the Russians as rich. Some of the North Koreans try to escape and find South Koreans who will help them get out of Russia. After Amnesty International and the Western press began issuing reports about the camps, the local Russian government in Khabarovsk began closing them down. By 2003, only around 600 North Koreans were still working in the camps.
North Korean Worker at a Lumber Camp
A North Korean defector named Ahn Chong Hak told Kevin Sullivan of the Washington Post, he spent 15 months a Siberian camp that was surrounded by 15-foot walls topped by barbed wire. He said the North Korean laborers were often forced to work 15-hour days in -50°F temperatures and subsist on rice, salt, seaweed and slaughtered cats and dogs.
Ahn said all of the laborers $30 a month pay was given to the security agents and the laborers never received any cash, only thing like sugar, candy and cosmetics. Workers died at a rate of about three a month, he said, and the security agents waited until they had 10 bodies before shipping them home. The only time the work stopped was during indoctrination sessions. Many of the workers, he said, were not poor peasants desperate for work but relatively well-educated and well-off men.
In January 1993, Ahn said he bribed a security agent to let him go into a nearby town to get parts for a saw. Ahn used the opportunity to escape. With only a knife, a map, and little money, over the next 17 months he made his way to Vladivostock, surviving on food given to him by Russian families, and stowed away on a freighter that stopped in the South Korean port of Ousan in August, 1994. Leaving behind a wife and child in North Korea, Ahn later remarried and got a job as a car salesman.
Image Sources:
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, U.S. government, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.
Last updated May 2016