National Sections of the L5I:

Russian workers struggles revive

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Dave Stockton looks at the recent upsurge in workplace struggles in the former Soviet Union

A REPORT to a joint conference of the International Labour Organisation (ILO) and the Russian trade unions gives a revealing picture of the Russian economy and workforce.

According to official figures the state sector has declined from 75.4 per cent of the economy in 1991 to 40.1 per cent in 1997. In addition the “collective and mixed ownership sector” increased from 10.3 per cent to 19.4 per cent, and the private sector grew from 13.3 per cent to 39.9 per cent.

The report warns, however, that the validity of these figures “is widely questioned” because of what it euphemistically refers to as “a lack of transparency in the ownership structure”, admitting that in many enterprises “it is very difficult to identify who are the real owners.”

The report points out that: “most of the enterprises privatised through the management-employee buy-out . . . are run by the old management, meaning no substantial change in their largely ineffective governance
. . . privatisation itself has neither reduced labour hoarding nor improved the allocation of resources, including labour, with effects on the overall productivity.”

The vast majority of workers in the Russian Federation are still employed in the old large and medium-sized enterprises dating from Soviet days: 67 per cent in 1998 – down from 78.6 per cent in 1992.

New start-up private firms, most operating in trade, catering, repairs and construction (rarely in industry or transport) are the main source of new employment, and wages in them are significantly higher and regularly paid. However most remain small scale and their overall share in employment is low, estimated at 13 per cent at the beginning of 1998.

The fall in the employed labour force in Russia was 10.2 million workers between 1991 and 1998 – 13.8 per cent. However this decline was actually very low when compared to the slump of 40 per cent in GDP. Such variance would never be the case in a functioning capitalist economy where the trend is rather the reverse – labour is shed in a greater proportion than production falls – i.e. there is an increase in “productivity” due to the intensification of exploitation as workers are replaced by machines (new technology) and/or greater work is squeezed out of the remaining workforce. Russia’s crisis seems to have had exactly the opposite effect.

The method of privatising the great majority of Russian industrial enterprises – the voucher system – led to management-employee buy-outs. This prevented mass layoffs of redundant workers and managers, since they were the shareholders/owners.

Only in the valuable energy and raw materials sector, in some high-tech industries, were the initial voucher or shareholders rapidly bought out by the “businessmen” and bankers from the illegal if not criminal sectors (the Mafia) and the big bureaucrats who had plundered their own enterprises or sold off state and municipal assets (the kleptocrats).
The result of this was that in the majority of “unprofitable” enterprises managers still accept responsibility for keeping on workers. The report claims that:

“According to numerous surveys, they prefer declines in production capacity utilisation to mass layoffs, explaining their stance by insufficient protection for dismissed workers; impossibility for displaced workers to find a new job due to depressed demand for labour; and a desire to maintain a core of skilled workers for future recovery.”
It is clear that these are not managers under the whip of capital but under the pressure of their own workforce, from regional authorities and the trade unions.

There has been a sharp decline in real wages, by 57 per cent between 1991 and 1998. Real wages started to decline at the beginning of the 1990s and this process accelerated violently after premier Yegor Gaidar’s “shock therapy” in January 1992. After stabilising in 1993 they again dropped significantly. A small recovery of real wages took place from 1996 to mid-1998 but was violently reversed by the crisis of August 1998. In the second half of 1998 wages lost 29 per cent of their real value in comparison with the previous half-year and this decline continued in the first months of 1999. In January 1999, the average real wage was down by 40 per cent, compared with January 1998.

The gap between women’s and men’s wages has widened. In 1989, on average, wages for women were 70 per cent of men’s: in 1997 women received only 55 per cent of the male wage. This is due to a strengthening of wage differentiation between industries dominated by male and by female workers. Women workers dominate in light industry (textile, garment and leather industries), education, health and social care, culture and agriculture.
But male-dominated industries like fuel, power or metal production pay the highest wages in the economy. Inequalities between sectors have greatly increased in the 1990s. In 1997 the difference in the average wage between the highest-paying sector (fuel) and the lowest paying one (agriculture) was 490 per cent while in 1991 it was only 140 per cent. Large wage gaps also exist between the state, private and mixed ownership sectors: in November 1997 workers in private enterprises earned on average 75 per cent higher wages than workers in the state sector and even 97 per cent more than their counterparts in the mixed sector.

Limited employment decline is compensated by large-scale underemployment: redundant workers are often put on administrative leave and short-time work. In 1998, at any one time 4-5 million workers were in this position. In addition, around three million workers are paid extremely low wages, reflecting their reduced workload.

Non-payment of wages can also be taken as another form of underemployment. According to surveys conducted by the All-Russia Centre for Public Opinion (VTsIOM) and the Ministry of Labour, only 46 per cent of workers in industrial enterprises got their wages in full in June 1997 and this declined to 25 per cent in March 1998. By December 1, 1998 total wage arrears reached 85 billion roubles, about 3.2 per cent of GDP. In 1999 however this backlog was significantly reduced, to 59 billion roubles by June 1999.

Another measure of the great leap backwards induced by the restoration process is the increase in the percentage engaged in agriculture in contrast to a world-wide opposite trend. It increased from 13.2 per cent in 1990 to 14.8 per cent in 1997. Many displaced workers have been forced to start subsistence farming while a number of families possessing a plot of land grow food for themselves, relatives and occasionally for the market.

Unemployment was recognised as a real phenomenon and made legal only in 1991. At the end of 1992 the unemployment rate according to ILO’s Labour Force Survey (LFS) had already climbed to 4.8 per cent. The unemployment rate in 1999 according to the LFS was 14.2 per cent.

The social groups hardest hit are young people and women. But here are also huge and increasing regional disparities in unemployment, ranging in 1997 from 4.8 per cent in Moscow to 27 per cent in the republic of Dagestan and 58.2 per cent in the Republic of Ingushetia.

The data for the wages, unemployment, under-employment and multi-employment present a grim picture of the misery and insecurity that capitalist restoration has meant for Russian workers.

The last few years, however, have seen a heartening revival of workers’ struggles – for unpaid wages and against privatisations. The high point of recent class struggle was the movement in 1997-8 for the immediate payment of the huge wage arrears mentioned above. Workers, including the miners, mounted blockades of major roads and railway lines. The threat of an all out general strike played an important role in the crisis of August 1998.

Yeltsin had to beat a hasty retreat and brought Yevgeny Primakov – an ally of the CPRF – to the premiership, with a couple of communist ministers. The movement culminated with a one day general strike on October 7 1998 – when 12 million people at 39,000 enterprises went on strike or were involved in work stoppages and 17 million were involved in meetings and demonstrations in towns and cities across the country.

The strike was led by the Federation of Independent Trade Unions of Russia with CPRF participation but these bureaucratic leaders, satisfied with Primakov in power, demobilised the movement. When the economic and political crisis was over Yeltsin sacked Primakov.

By the autumn things were simmering again. The total debt on wages was estimated in September 1999 to be 56,155 million roubles. More than 17 million employees at 107 thousand enterprises had not been paid on time. Government-employer-trade union negotiations for 2000-2001 on the level of the minimum wage and pensions reached deadlock.

The refusal of the employers and the government to negotiate with the unions led to an increase of collective actions of protest. In September 1999, indefinite strikes were announced by about 7,000 people at 226 educational institutions in six regions of the Russian Federation. The main demand of the strikers is for the payment of wages owed. There are many strikes at power and energy enterprises and institutions with the same demands. Workers’ collectives have launched actions in different cities, towns and regions across the vast Federation.

Notable amongst forms of workers’ actions in 1999 was the occupation strike, such as the one in Vyborg, where workers occupied the factory, elected a manager and ran the factory themselves. When the British owners managed to get the authorities to reclaim “their” mill for them – storming it with OMON forces at dead of night – the workers besieged the besiegers and the paramilitary police were forced to withdraw.

Over the last year or two reports are multiplying of regional strike committees, even of proto-soviets, and of both trade union and political forces attempting to build a workers’ party. Labour organisations like the union “Zashita” ( Defence) are openly anti-capitalist. The Movement for a Worker’s Party has elected Oleg Shein from Astrakhan as its deputy in the recent Duma elections.

These developments indicate that Russian workers are taking important steps towards political class consciousness. This is particularly significant given the terrible legacy of Stalinist dictatorship – which destroyed all traces of working class self organisation – followed rapidly by the severe crisis brought about by the restoration process. Both had severely undermined even rudimentary trade union consciousness and organisation, let alone political class consciousness and political organisation.

It is remarkable that the signs of revival are emerging so soon. But there remains an acute political crisis of leadership to be resolved if workers are to settle scores with their exploiters. It is vital to build a nationwide network of political activists with deep roots in the working class, to win them to an anti-capitalist and anti-bureaucratic action programme and lay the foundations of a new revolutionary party on the Bolshevik model, not the Stalinist one.