Abstract
When the time comes to write the first economic history of post-Soviet Russia, it is probable that, given sufficient perspective, the whole period from 1 January 1992 until the summer of 1998 will be treated as a single period—or at most two periods—wherein the working population of the Russian Federation, as earners, consumers, and providers for their dependents, underwent a harsh and wrenching, but not altogether negative, period of adjustment to new economic conditions. This transitional period, it will be argued, came to an end with the devaluation of the ruble, the effective default on most of its external debt, and the consequent collapse of Russia’s precarious position in the world economy. At home, the crash of the ruble and consequent rapid inflation experienced by a population more and more dependent on imports threatened the measure of comfort and security—thin as it was—that some Russians (not just the “new Russian” super-rich) had achieved, and heralded further distress for the larger numbers who had experienced mainly economic disadvantage since the end of 1991.
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Notes
Ann Goodman and Geoffrey Schleifer, “The Soviet Labor Market in the 1980s,” Soviet Economy in the 1980s: Problems and Prospects (Washington, D.C.: Joint Economic Committee, Congress of the United States, 1982), vol. 2, 333. Had the USSR and the Soviet economy survived, the leadership would have faced the choice of trying the bring the new labor northwestward to the areas where it was needed, or constructing new industry in the south and southeast, where the surplus “bodies” were. Neither choice would have been easy, or even in the end feasible in those post-Stalin times. There was little propensity for Central Asians to migrate; major industrial relocation south and east was a prospect Herculean and unaffordable. In the event, of course, the USSR did not survive.
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It is by now the conventional view that the more successful transition economies (Poland, Hungary) did a better job at “pricing” things from the outset than did Russia: in “Eastern Europe, inflation was contained because unemployment was allowed to rise from the very beginning…. This has not happened in Russia.” (Olivier Blanchard, et al., Post-Communist Reform: Pain and Progress (Cambridge, MA: MIT Press, 1993). Thus, in Eastern Europe, the “flexibility” is in employment, in the labor market, and resulted in rapidly rising unemployment rates in the early phases of transition, whereas in Russia, the flexibility is in wage levels, and the likelihood of their (non-)payment: “workers have traded real wages for relative employment stability” (Simon Commmander and Ruslan Yemtsov, “Russian Unemployment: Its Magnitude, Characteristics, and Regional Dimensions,” in Poverty in Russia: Public Policy and Private Responses, ed. J. Klugman [Washington, D.C.: The World Bank,1997], 134). Of course, broader economic policy also influenced behavior at the firm level, leaving Russian plants early on with little incentive to shed excess labor, and if anything strong incentives to keep workers aboard. “Contrary to Eastern European experience, Russian firms have not operated as if governed by a hard budget constraint. Indeed, employment rather than, say, output, seems to have been the main factor determining the size and distribution of government subsidies” (Commander and Yemtsov, “Russian Unemployment”). Further on—i.e., as of 1996—the results of this difference could be seen in the starkest of numbers. Poland’s GDP had grown 23 percent between 1993 and 1996, and in the latter year it still had an unemployment rate of 13 percent. Hungarian GDP grew five percent during the same period, and Hungary posted a 1996 unemployment rate of 11 percent. Russia, whose GDP had fallen by 25 percent 1993–1996, recorded only 11 percent unemployed in 1966 (Richard Layard and Andrea Richter, “Special Report: Labour Market Adjustment in Russia,” Russian Economic Trends 3, no. 2 [1998], 2).
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Walter D. Connor, Tattered Banners: Labor, Conflict, and Corporatism in Postcommunist Russia (Boulder, CO: Westview, 1996).
Andrei Illarionov, et al., “The Conditions of Life,” in Economic Transformation in Russia, ed. Anders Aslund (New York: St. Martin’s Press, 1994), 143–146.
Walter D. Connor, “Observations on the Status of Russia’s Workers,” Post-Soviet Geography and Economics 38, no. 9 (1997): 550–557.
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Blair A. Ruble, Soviet Trade Unions: Their Development in the 1970s (New York: Cambridge University Press, 1981); Simon Clarke, et al., The Workers’ Movement in Russia (Brookfield, VT: Edward Elgar, 1995); Walter D. Connor, The Accidental Proletariat: Workers, Politics and Crisis in Gorbachev’s Russia (Princeton, NJ: Princeton University Press, 1991); Connor, Tattered Banners; Linda J. Cook, Labor and Liberalization: Trade Unions in the New Russia (New York: Twentieth Century Fund Press, 1997).
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© 2000 Mark G. Field and Judyth L. Twigg
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Connor, W.D. (2000). New World of Work: Employment, Unemployment, and Adaptation. In: Field, M.G., Twigg, J.L. (eds) Russia’s Torn Safety Nets. Palgrave Macmillan, New York. https://doi.org/10.1007/978-1-349-62712-7_10
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