soviet union job assignment

The Soviet Union: Achieving full employment

[Part of the Soviet Union series ]

The Soviet labour 'market' was a peculiar one. Rather than the prevalence of unemployment, as we are used to, the Soviet Union not only achieved full employment, but also got to a situation where there were_shortages of labour,_even though a significant share of the population was working. In this post I clarify what does full employment mean in the Soviet context, and explain some aspects of their labour 'market' not covered in my previous post on this topic. As usual, this post covers the post-Stalin era. [1]

The official Soviet ideology contends that socialism is not only completely different from capitalism, but also in all respects (i.e. socially, economically, politically, culturally, and morally) superior to it. In order to substantiate this claim, the ideology cites a long list of achievements, one of them being that while unemployment is an endemic feature of capitalism, socialism abolishes it entirely and once and for all. If the term 'unemployment' denotes exclusively open unemployment of the registered kind or the dole, then the assertion is fully justified, because in the Soviet Union the payment of unemployment benefits was stopped as early as October 1930. On top of that, over the years the Soviet regime has succeeded in mobilizing for participation in the social economy the vast majority of able-bodied men and women of working age.*** (Porket, 1989)

This post draws mainly on János Kornai's The Socialist System  (1992) and J.L. Porket's Work, Employment, and Unemployment in the Soviet Union (1989).

The first point I'll mention is the data backing up the claims in the introductory paragraph: The activity rates in socialist countries were far higher than the ones in the West

Kornai warns that economic development increases the participation rate, but even when taking this into account, the socialist economies still shine in that sense.

There is a loose positive relationship between the level of economic development and the participation rate. If one compares the participation rates of socialist and capitalist countries at the same level of  economic development, it turns out that the socialist countries' participation  rates are the highest on each level of economic development.

One key difference between the socialist systems and the West was a massive socialist lead in women's activity rate, which contributed to the overall participation rate. Assuming crudely that women are half of the population, in 1980, assuming South European levels of women's activity rate implies a difference of 61.2 percentage points. Half of that is roughly 30 percentage points, which then have to be translated to employment/population, which will be less, because not everyone works. While I don't have data at hand for this final step, it is plausible that the higher rate of activity of women explain a big part of this increased overall activity rate.

We could think that this was due to an underlying feminist trend, where the Soviet State pursued and achieved gender equality. In the West, women entering the workforce was a result of changing norms of what was admissible for women to do, where previously some occupations were seen as male-only. The reason for this increased women activity rate in the USSR was that the socialist system needed workers, and women make up half of the population. The feminist interpretation, that seems plausible given de jure legislation regarding maternity leave, for example, faces several issues, like the abortion ban (reversed after Stalin in 1955)[2] and legal barriers to divorce in 1936 (to encourage population growth), the fact that there were almost no women in the higher echelons of the Party, and that women were still the main carers of children and main doers of household chores ( Mespoulet, 2015 )

But why full employment and labour shortages? Kornai argues that this wasn't because of an explicit policy to ensure full employment (even though the right and the duty to work were enshrined in the Constitution of the USSR). Achievement of full employment was a by-product of the socialist system in its pursuit of growth. This right to work, however, wasn't present from the beginning, but it's granted once the system has reached a point where full employment obtains.

Once this process has occurred and been rated by the official ideology among the system's fundamental achievements, it becomes an "acquired right" of the workers, a status quo that the classical system cannot and does not wish to reverse. Thenceforth full employment is laid down as a guaranteed right (and to a degree, so is a permanent workplace, as will be seen later). This is an actual, not just a nominally proclaimed right, ensured not only by the principles and practical conventions of employment policy but by the operating mechanism of the classical system, above all the chronic, recurrent shortage of labor. Permanent full employment certainly is a fundamental achievement of the classical system, in terms of several ultimate moral values. It has vast significance, and not simply in relation to the direct financial advantage in steady earnings. It plays additionally a prominent part in inducing a sense of financial security, strengthening the workers' resolve and firmness toward their employers, and helping to bring about equal rights for women.

The situation of chronic labour shortage (In Poland, for example, there were over 90 vacancies per job seeker) is seen as problematic by the Party, as labour shortage means the productive plans are harder to fulfill, and so planners tend to react by investments in labour saving capital goods, promoting population growth, etc.

From the factory manager's point of view, this situation induces them to 'hoard' workers: perhaps more workers will be needed in the future, but maybe they will not be available for hire, so they hire them now. At a given point in time, then, a factory will have more workers than it actually needs. This, combined with low job activity from some (demotivated) workers leads to the concept that Kornai terms 'unemployment on the job'.

***While open unemployment of the registered kind is absent and the labour force participation rate is high, open unemployment of the unregistered kind has not disappeared. In addition, there is chronic and general overmanning as well as voluntary and involuntary employment below skill level, i.e. underutilization of employed persons in terms of both working time and educational qualifications. Although underutilization of employed persons keeps open unemployment down, it has a number of adverse consequences, which should not be overlooked. Amongst other things it contributes to slack work discipline, low labour productivity, divorce of rewards from performance, low real wages, inflation, and shortages of consumer goods and services. Thus, from the point of view of the situation in the labour market or the relation between the supply of and demand for labour the official Soviet economy may be characterized as a high-employment one; from that of the utilization of the employed labour force or the relation between labour input and the output of economic values it may be characterized as a low-productivity one; and from that of the income received by individuals for playing the role of employed persons it may be characterized as a low-incentive one. (Porket, 1989)

One way to think about this: Assume that we have two economies that consist of people digging ditches (people like ditches in this world) and related activities. Economy A uses the most efficient arrangement of people and capital for the task, but there exists some unemployment due to inefficiencies here and there, so that only 95% of working age people who want to work actually do so.

Economy B is the same as Economy A, but it has 100% employment, due to a government mandate that those who would be unemployed are to be hired. People take shifts to dig ditches.

At the end of the day, the same length/number of ditches are dug in both economies.

Some people would like Economy B: everyone has a salary, and people work less. Great, isn't it? But the problem is that -assuming no companies go bankrupt- a) Salaries are lower b) No extra labor is easily available for new projects c) Some people work and earn less than they would like to

At the end of the day, it comes to a redistribution of wages and work time: Some win and some lose. Alternatively, this could be seen as a tax on the employed to redistribute to the unemployed. But the economic consequences of doing that in the long term are problematic [3].

This is overmanning, a form of hidden unemployment. If Economy B actually used the efficient number of workers, they would have, say, an employment rate of 80%. In this case, the economy would be producing the same in aggregate.

Overmanning is a type of hidden unemployment. Porket distinguishes three kinds:

• Employment in part-time jobs when a full-time job is desired
• Employment where people are forced to work in jobs for which they are overqualified
• Employment where companies employ more people than they need, given their technological conditions (the case of Economy B)

He estimates overmanning to be 10-15% of the total workforce.

We now jump to post-Stalin history.

Between 1957 and 1961, so called 'antiparasite laws' were adopted in most of the USSR. These measures were to force everyone to have a 'socially useful work', and noncompliers were punished with 2-10 years of forced labour.

Some open unregistered unemployment existed, but was low:

Not surprisingly, this open unemployment stemming from a lack of vacancies was not officially quantified, so that its accurate volume remains a guess. But it is known that in 1959 10.0 per cent of men of working age and 27.4 per cent of women of working age neither participated in social production nor studied full time (see Table 5.2 below). And six years later E. Manevich asserted that 20 per cent of the able-bodied population did not take part in social production.  Obviously, the 1959 figures did not refer exclusively to jobless persons keen to have a job, yet unable to get it because of a lack of vacancies. They also covered non-employed persons uninterested in playing the roles of workers or collective farmers. Nevertheless, they clearly indicate the existence of at least some involuntary open unemployment, albeit unregistered. Concerning specifically youth unemployment, it was reported (although not documented) by Basile Kerblay that 'according to Gosplan statistics, 25.2 per cent of young people aged between 16 and 17 and 13.9 per cent of those aged between 18 and 19 were unemployed in medium-sized towns in 1965, compared with 1. 7 per cent for other age groups'. Besides admitting the occurrence of both non-employment and involuntary open unemployment, naturally without using the term 'unemployment' which was reserved for capitalism, Soviet sources further admitted that employed persons were frequently underutilized, either because of involuntary employment below skill level, or because of overmanning. In order to remove this particular cause of overmanning, E. Manevich proposed in 1965 and again in 1969 a solution that in fact amounted to open registered unemployment. Instead of enterprises, special organizations should be responsible for the placement of the workers made redundant in connection with technological progress. Simultaneously, while between jobs, the workers in question should be provided for materially by the state. Not surprisingly, the proposal was not implemented. Open registered unemployment and unemployment benefits were unacceptable to the regime, because its ideology contended that socialism liquidated unemployment entirely and once for all and that under it technological progress went hand in hand with full employment of the able-bodied population. Thus, restrictions on dismissals were not lifted, so that enterprises shedding surplus workers remained responsible for their placement. (Porket, 1989)

Under the (1976) constitution, citizens had the right to work (i.e. to guaranteed employment and pay in accordance with the quantity and quality of their work, and not below the state-established minimum), including the right to choose their trade or profession, type of job and work in accorance with their inclinations, abilities, training and education, albeit subject to the caveat of taking into account the needs of socieety. On the other hand, it was the duty of and a matter of honour for every able-bodied citizen to work conscientiously in his/her chosen, socially useful occupation, and strictly to observe work discipline. Socially useful work and its results determined a person's status in society. Evasion of socially useful work was incompatible with the principles of socialist society [...] Moreover, the labour situation was contradictory. 34 On the one hand, open registered unemployment was absent, economic activity rates were high, full employment of the able-bodied population was alleged, and complaints of labour-deficit areas and a shortage of labour at the national level abounded. On the other hand, open unregistered unemployment was not unknown, overmanning at the enterprise level was chronic and general, quite a few qualified individuals were voluntarily or involuntarily employed below their skill level, labour-surplus areas were to be found, and employment in the official economy was evaded. This contradiction was reflected in Soviet discussions on the country's manpower resources. The prevailing view asserted that labour resources were inadequate, meaning by it that the available labour supplies lagged behind the effective demand that was incorporated in enterprise plans and backed up with funds. In contrast, a minority view contended that labour resources were completely adequate, but were utilized irrationally.

To sum up, the official unemployment rate was zero, almost by institutional definition: You couldn't sign up for unemployment benefits. Companies hoarded labour

However, non-registered unemployment existed for people who had quit their jobs and moved to another location, or had just begun working.  While at an aggregate level, there were many more jobs than workers, in a micro scale, the geographical and skill distribution of these jobs did not match efficiently with the location and skills of the workforce. Despite this, the Soviet Union managed a very high employment rate, on par with the concept of full employment in the west.

Breaking down this by parts, a fraction were people switching jobs: since a) there were no unemployment benefits, people had lots of incentives to quickly look for another job. b) There were lots of vacancies c) 'Uninterrupted service' a legal concept that had an impact in social security benefits. If a worker was without employment for more than three weeks, they would lose that status d) Antiparasite laws that made punishable not having a 'socially useful' job for more than four months.

Other part of this unregistered unemployment were women who quit their jobs to be mothers.

Yet another part was youth unemployment. Young (<18) people were entitled to a variety of privileges, like having to work less hours for the same pay a full time worker would get. Ceteris paribus, companies preferred older workers. The USSR reacted to this by imposing quotas on companies (Between 0.5 and 10% of the workforce had to be <18). The rate of (unregistered) unemployment for this group was 1-5%.

Further, to easen up the transition from school or university to work, the State planned which companies would hire which worker in advance, which sounds like it would solve any problem, but

In practice, the system functions far from smoothly. It has difficulties in balancing supply and demand. There are exemptions from it, particularly on grounds of health and family circumstances. Due to changes in their plans or needs, enterprises frequently refuse to hire the graduates directed to them. Some graduates fail to show up at their assigned posts. Others do turn up, but leave before the expiry of the three-year period, inter alia, because they are not given work

 Conclusion

Taking into account unregistered unemployment the Soviet economy achieved what in the West is typically called full employment (At least in the sense that almost everyone who wanted to work had a job), with rates below 5%. This compares favourably with capitalist economies at their best, and it's significantly better than capitalist economies undergoing a recession ( Gregory and Collier, 1988 , Ellman 1979 )

Rates of activity among women were high due to the need for more workers.

However, companies was plagued by overmanning due to the incentives mentioned above, and while measures were taken to try to reduce it, it still persisted.

David, H. P. (1974). Abortion and family planning in the Soviet Union: public policies and private behaviour. Journal of biosocial science , 6 (04), 417-426.

Ellman, M. (1979). Full employment—lessons from state socialism. De Economist , 127 (4), 489-512.

Field, M. G. (1956). The re-legalization of abortion in Soviet Russia. New England Journal of Medicine , 255 (9), 421-427.

Gregory, P. R., & Collier Jr, I. L. (1988). Unemployment in the Soviet Union: Evidence from the Soviet interview project. The American Economic Review , 613-632.

Kornai, J. (1992). The socialist system: The political economy of communism . Oxford University Press.

Mespoulet, M. (2006). Women in Soviet society. Cahiers du CEFRES , (30), 7.

Porket, J. L. (1989). Work, employment and unemployment in the Soviet Union . Springer.

Spufford, F. (2010). Red plenty . Faber & Faber.

[1] During Stalin's time, until 1956, workers couldn't legally quit their jobs without permission from the company's management. Quitting was a criminal offence. The State could compulsorily move workers from one company to another. Work discipline was enforced throughout the Soviet era, but the harshness of punishments decreased after Stalin.

Explicity, the official attitude was reiterated by L.F. Il'ichev in  ecember 1961: communism and work were inseparable, communism was not a society of lazy-bones, an aggregate of loafers. (Porket, 1989)

Even after Stalin, worker strikes remained illegal, but some incidents did occur.

[2] An even then, it wasn't because of a greater respect for women's rights, but because women were having abortions anyways, and illegal abortions are generally less safe. The relegalisation decree wasn't publicised, to avoid further increases in abortion rates, which illustrates that the Party attitude towards abortion was closer to a technical problem (Will this measure promote growth?) rather than a matter  of rights, which was closer to Lenin's views. (Field, 1956 )

While no official policy has been publicly promulgated, much emphasis is placed on 'the fight against abortion'. Potential dangers are publicized through extensive dissemination of brochures, medical bulletins, posters, and related materials. Some Soviet literature expresses a sense of moral indignation and censures women seeking abortion. Most research focuses on possible somatic sequelae. As one Soviet colleague explained to me, 'Every child must be wanted . . . abortion is available . . . but we must restrict abortion in spite of the permission for abortion.' Legal abortion is viewed as only a slightly lesser evil than illegal abortion. ( David, 1974 )

[3] Both economies have the same citizens and preferences, so citizens in Economy A already have a job-length distribution that they like. In Economy B, people would want to earn more (by working more), but they can't.

What about the unemployed in Economy A? If there are unemployment benefits, that will come from the incomes of workers, so perhaps the final distribution of salaries could be the same as in Economy B. If there were no productivity losses from job and wages redistribution, it would be a zero sum game. If there are, however -and Porket mentions that that was the case - then forcing full employment makes everyone worse off in the aggregate, and in the long run.

Workers, having now an advantage over employers displayed less work ethic, absenteeism, and could threaten employers with leaving if they were to be disciplined (This, after the Stalin period).

[4] Under Stalin, higher education mostly meant engineering. Half of university students pursued degrees in engineering, the rest were pure sciences, agricultural sciences, and medicine. Humanities and social science departments were mostly defunded. ( Spufford, 2011 )

Comments from WordPress

[…] How the Soviets achieved full employment. […]

[…] The Soviet Union: Achieving full employment […]

The Soviet Union had full employment and labor shortages simply because the government monopolistically set wages below the market-clearing equilibrium. Some firms avoided labor shortages by paying extra (in cash or in kind) under the table.

[…] workers had to be repressed and coerced into working as the State demanded. (I talked about this here and here) The problems the forced translation of labour from farm to factory caused with […]

"At least in the sense that almost everyone who wanted to work had a job" 'not working' was illegal in ussr, you were forced to work.

[…] I think it serves as a first approximation. One possible explanation for this particular table is overmanning: Employing more people than necessary for a variety of reasons explored in the linked post. Other […]

In academic work, please cite this essay as:

Ricón, José Luis, “The Soviet Union: Achieving full employment”, Nintil (2016-07-30), available at https://nintil.com/the-soviet-union-achieving-full-employment/.

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The Life of the Soviet Worker

Mark B. Smith, University of Cambridge.

• Published: 06 January 2015
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The Soviet Union was the workers’ state and worker culture, broadly defined, coloured the whole of the Soviet experience. At the centre of the most transformative Soviet project of all, Stalin’s industrial revolution of 1928–41, workers benefited from specific privileges and from affirmative action, though they also suffered the misery of rapid industrial change. After 1953, they enjoyed a heyday of modest material advances and moral certainties, marked by the sense that society respected at least some of their values and would do so forever. But this sense was not shared by all Soviet workers, and lifestyles varied by industry, skill level, and region. And the heyday faded as shortages became increasingly difficult to endure, and then ended, as Gorbachev’s reforms destroyed the comforts that remained. A positive worker identity, but not a coherent class consciousness, survived through to perestroika , and helped to sustain the dynamic of Soviet history.

More than any other Soviet leader, Nikita Khrushchev had something of the worker about him. Sometimes labelled a peasant at heart, with his obsession with maize and his earthy wit, Khrushchev was certainly born in the countryside. But he moved to the city and became a skilled metalworker; he joined the party as an industrial recruit during the civil war; and he was promoted through the hierarchy of the party bureaucracy thanks to the affirmative action that favoured the industrial proletariat during the First Five-Year plan.

Khrushchev’s manners, enthusiasms, successes, his unpredictable rise, the crises that conditioned him—up to a point, the very trajectory of his biography—were inseparable from those of the ordinary Soviet worker. It was during the Khrushchev era that the Soviet Union belatedly became a majority urban society; soon after that, industrial labour displaced all other groups to become the statistically dominant section of the Soviet workforce. In power, Khrushchev reformed the political economy of the USSR sufficiently to transform many workers’ living standards. His own perceptions of justice, equality, and popular material improvement, monstrously refracted as they might have been by his participation in Stalin’s terror and by his own privileged existence at the top of the Soviet elite, converged, in important ways, with the moral economy of the Soviet worker.

What happened after 1953 to Soviet workers—primarily full-time factory workers, but those in other working-class occupations too—was thus as important as what happened before. But what happened before was the creation of a whole new sense, historically unparalleled, of what it meant to be a worker. The Soviet Union was the workers’ state, and while historians have often emphasized the exploitation of the working class during and after Stalinism, worker culture, broadly defined, nevertheless coloured the whole of the Soviet experience. Workers were always celebrated. They were at the centre of the most transformative Soviet project of all, Stalin’s industrial revolution of 1928–41. Especially during the first half of that revolution, workers benefited from specific privileges and from affirmative action, though they also suffered the dreadful misery of rapid industrial change. Many in the Brezhnev generation, born in the decade or so before 1917, started their careers as workers before gaining an industrial higher education and entering the ranks of the technical intelligentsia. Later in Soviet history, many such men and women, who had been formed by working class culture, could be found higher in the ruling order.

Capable, at a stretch, of remembering what it was like to be a worker, such people had nevertheless risen out of the working class. For this lucky minority, the workers’ state offered a ladder into the technical and administrative elites. For those who remained, by the post-Stalin era, it offered a workers’ standard of living that was much closer to that of the bosses than in capitalist economies. But it did not offer a framework in which Soviet working-class consciousness could solidify. Many historical investigations have sought to resolve a related paradox. For a large phalanx of leading labour historians writing in the 1970s and 1980s, the Russian working class in 1917 was so aware of its own class interests and so capable of projecting them in the wider social and political arena of national life that it accomplished the historic achievement of the Russian Revolution. Yet by the 1930s, Soviet workers had lost their sense of belonging to a class that could systematically take collective action to enhance its own interests. Why was this? Perhaps it was a consequence of Stalinist repression and thus working class atomization—and perhaps, or perhaps not, this process dated back to the revolution and civil war. Perhaps it was a result of the mass influx of peasants into the cities, undermining conventional self-understandings of worker identity. Or perhaps workers played the game according to the rules of material advance that Stalin laid down, making rational calculations to serve their own self-interest rather than that of their class as a whole: perhaps they took the chance when it came to rise out of their class rather than to improve their lot alongside their fellow workers. 1

Lacking its own representation and its own unmediated voice, the Soviet working class atrophied. In some ways it was exploited and repressed. But Soviet workers, as individuals, families, and working collectives, remained at the centre of the Soviet project. After 1953, they enjoyed a timeless heyday of modest material advances and moral certainties, marked by the sense that society respected at least some of their basic values and would do so forever. 2 But this sense was not shared by all Soviet workers, and lifestyles (and in all probability attitudes) varied by industry, skill level, and region. And the heyday faded as shortages became increasingly difficult to endure, especially in the provinces, and then it ended, as Gorbachev’s reforms suddenly destroyed the comforts that remained. A positive worker identity, but not a coherent class consciousness, survived through to perestroika , and helped to sustain the dynamic of Soviet history.

The Decline and Fall of the Soviet Working Class, 1917–53

It all started so well. The Bolsheviks took power in October 1917 thanks to the support of a radicalized working class, especially in the bigger cities. As a result, the political mythology of the Soviet Union from start to end derived in substantial measure from the heroism of the working class.

In 1917, skilled workers in Petrograd and Moscow, those who were the most aware of their class identity, led the struggle for workers’ control, and for collective wage bargaining across ever larger units of the working population. As 1917 went on, workers and Bolsheviks converged on the most revolutionary of paths. Women played their part. Fundamental to the street protests of the February Revolution, they were incorporated into the labour movement as the revolutionary year progressed. Male workers took seriously women’s workplace grievances but had no time for gender as a broader issue: feminism was bourgeois, and the position of women in the movement was decisively subordinate. Factory committees and soviets were naturally masculine arenas, where decisions were taken by acclamation and the workers with the loudest voices and the most fearsome presence carried the day. Gender differences fed into the iconography of the workers’ revolution. One of its most enduring symbols was the burly, red, unshiftable blacksmith, lit by the sun, gatekeeper of the future workers’ state. 3

It became clear very quickly that the workers’ state would not be an arena of working-class power. The working class of the revolution started to come apart during the civil war. As Petrov-Vodkin showed in his 1920 painting of an echoing cityscape at the back of Our Lady of Petrograd, 1918 , the population of the great cities had fallen dramatically. Petrograd itself saw a decline from 2.5 million residents to 700,000 between 1917 and 1920. 4 Many workers returned to their villages, diluting class identity, endangering their mutual understanding with the Bolsheviks. By the end of the civil war, the Bolsheviks still wanted to build a workers’ socialism, but they had to rebuild the economy first; they had to raise productivity and reinstitute labour discipline. It was at the Tenth Party Congress in 1921 that they introduced the New Economic Policy and a way of doing politics that was formally less receptive to dissent. In order to attain their goals of a workers’ state governed by the ethics of socialism, therefore, Lenin and the ruling circle agreed to introduce shop floor relations that would undermine working-class organization and autonomy.

In this sense, an original sin had been committed. The immediate interests of the workers diverged from those of their new masters, a process that accelerated during the 1930s when the Stalinist elite effectively smashed the remnants of working-class consciousness. Yet the Soviet leadership could never depart, and perhaps it never wanted to, from one of the revolution’s ultimate logics, the elevation of the workers. This was, after all, the workers’ state. All sorts of people enjoyed the capitalist-style good life in the 1920s, arguably at the expense of the workers. But a raft of careful rhetorical strategies placed workers at the heart of Soviet life. From the earliest part of the Soviet era, citizens were invited to construct their own identities, to ascribe themselves to classes, to write their own biographies. 5

It was in this context that industrial relations settled down during the New Economic Policy (NEP) after a rash of strikes in 1920 and 1921. Perhaps workers were exhausted and hoodwinked, perhaps they were sufficiently class conscious to make appropriate use of their unions and to press their interests within the boundaries of the possible. Perhaps they were prepared to accept a trade-off: in exchange for abandoning working class involvement in politics, they accepted an improving standard of living, diminishing their class identity in the process. 6 Workers’ sense of themselves as a class was probably also undermined by the conflicting demands of their urban and rural selves (many workers continued to spend time in their native villages). On the Soviet periphery, in particular, ethnicity added further complexity to the mix. 7 Trade unions had certainly been weakened—undermined by the logic that going on strike put one in opposition to the requirements of the workers’ state, and thinned out by the removal of practical functions, including some of the administration of welfare payments—but in some industries, they retained the respect of their members.

The First Five-Year Plan (1928–32) marked the onset of Stalinism. In crude economic terms it amounted to breakneck industrialization, urbanization, and agricultural collectivization, bringing all the premature death and misery to workers and peasants that one might expect from a speeded-up industrial revolution. Stalinism was a ruthlessly extractive political economy which viciously subordinated the living standards of workers (and much more, of peasants) to the promise of a soi-disant socialist order, and ultimately a communist utopia. It also sought to entrench the elite, the boss class in the factories, party, and local soviets: though in Stalin’s ideology-obsessed ruling circle, many of whose members continued to live relatively modestly, this seems to have been a secondary consideration, or an intermediate necessity. Workers faced a horrible reality: their society cared nothing for them as individual human beings, and valued them instead as mere units of production.

And these units were to be replicated on a mass scale. Cities were built out of nothing, gargantuan industrial plants were constructed on barren steppe, existing factories and workers’ districts grew until they were unrecognizable. The flood of peasants caused a ‘ruralization of the cities’. In little more than a decade, workers had increased by almost three times as a sector of the population; 12 per cent in 1928, they were 32.5 per cent in 1939. The industrial workforce doubled between 1928 and 1932; the number of construction workers rose by four times. The impact on workers’ living standards was catastrophic. Wages fell rapidly during the First Five-Year Plan, in contradistinction to what the plan had laid down. True, wages improved for a spell in the middle 1930s. But wages only reflected part of the terrible impoverishment wreaked by industrialization; in Leningrad, a well-provisioned city, workers’ consumption of meat dropped 72 per cent and fruit by 63 per cent between 1928 and 1933. Fatal workplace accidents were widespread. The welfare provisions that had been introduced after the revolution were puny in the face of this onslaught. Some of them, notably unemployment benefit, were eliminated altogether. 8

The workers’ world turned upside down. This was the result of deliberate disruption on the epic scale: during the Cultural Revolution (1928–30), youth thumbed its nose at experience. At the same time, central planning, charged with creating economic order, instead unleashed chaos. Dealing with chaos was the workers’ new reality. Labour exchanges should have methodically matched workers to vacancies, but many workers simply downed tools and followed the rumour of better paid work, better conditions, and better housing, travelling hundreds of miles on the off chance. Or they fled misery, trouble, and episodes of unemployment. Peasants left their villages in huge numbers, running away from collectivization, spurning even the best jobs in a new kolkhoz for what they deemed a better chance in a factory. In Magnitogorsk, a tent city grew up around the emerging steelworks on the empty steppe. On Turksib, a prestige railway project in the Kazakh republic, men and women desperate for work turned up at the site and were hired without reference to the proper procedures. 9

As Wendy Goldmam has shown, women workers underwrote industrialization. By 1935, 42 per cent of the industrial workforce was female. They worked in industries, such as construction, which had been closed to them under capitalism, though they often found themselves confined to certain roles and skill levels, so a form of sex segregation remained. Women’s unpaid domestic labour helped to pay for this industrial revolution, in effect releasing capital that could be invested in industrial expansion. The chaos unleashed by breakneck industrialization, combined with the strict penal code by which it was formally governed, ensured that a reserve of labour was required to keep the system fluid: very often, this reserve was provided by flexible but geographically tied women. Industrial and social policy seemed to play with women’s aspirations; some of the helpful welfare measures that had been introduced in the 1920s were rolled back in the mid-1930s, especially with the introduction of a pro-natalist family agenda. 10

The other side of chaos was repression. This could amount to outright violence, as in the crushing of strikes and rebellions, such as at Teikovo, in Ivanovo oblast’ , in 1932. Or repression might consist in implied violence. In December 1938, for example, workers who left their jobs could be prosecuted; the following month, if they were twenty minutes late for the start of the work day, they had to answer to the criminal law. In 1940, the laws were tightened further. And repression could be pernicious: in 1932, internal passports were introduced, formally, at least, making it more difficult for an urban worker to up sticks and tramp off to find better work in a different town (for peasants, it was even worse). For Donald Filtzer, everything about Stalinist industrialization was repressive. It was the elite and workers in conflict: it wilfully destroyed working-class solidarity. Wage differentiation set worker against worker. Robbed of recognizable class consciousness, Filtzer goes on, workers resisted in ways that reflected their very atomization. They worked slowly or carelessly, chatted too much or took too many breaks. In a sense this was resistance; in another sense, it was a reconfiguration of shop floor culture. This reconfiguration depended on the reduction of unemployment, eliminating one of the great working class horrors (levels had run at 10 per cent during the NEP). And it changed the way that workers exercised control over the processes of production. Before, this control had been a product, for example, of the workplace arteli , self-organizing groups of workers, which recruited new labour as well as helping with such things as the housing of their members. Such explicitly organized groups were inimical to Stalinism, which eliminated them, but the workers informally retained some of the functions of autonomy: management was unable systematically to regulate factory life because of the chaos that the industrial revolution had unleashed. 11

Even in the midst of immiseration, workers were thus able to extract some control over their lives. Yet conditions which so damaged basic standards—sanitation, nutrition, safety—were only one half of workers’ experience. The other half was an extraordinary enhancement of their formal status and their ability to construct a sense of who they were. The problem was that this did not enhance workers as a class; it enhanced them as individuals, and some more than others. Some of the same processes of positive discrimination that had applied in the early years of Soviet power were dramatically amplified during the First Five-Year plan. Sheila Fitzpatrick describes how workers were promoted through the ranks, especially during the Cultural Revolution, when the regime encouraged aggressive rhetorical assaults on ‘bourgeois’ specialists. Those with the right proletarian credentials were fast-tracked into institutes of higher technical education, appointments in factory management, senior engineering roles, and positions in the Komsomol and party. 12 In November 1929, the quota for working-class entry to industrial educational institutes was shifted upwards to 70 per cent. In 1933 and 1934, 65 per cent of the students at these institutions had a worker heritage. But social mobility took people out of the working class, gave such ex-workers new ‘class’ interests, and set in train the stratification of society that would be more apparent after the war. In any case, pro-worker affirmative action largely ceased in 1935. By 1938, only 44 per cent of students at industrial institutes were working class. Soviet workers made up a smaller proportion of party members, falling from 40.9 per cent of the party in 1933 to 18.2 per cent in 1941. 13

In 1929, shock workers arrived on the scene. The title and some associated material advantages were awarded to better performing workers. By the summer of 1931, two-thirds of workers enjoyed the designation. While Donald Filtzer puts forward evidence that the remainder expressed their dislike and anger, Hiroaki Kuromiya argues that the shock worker principle created new networks of support for the Soviet project that eclipsed and then dismantled the opposition that it prompted. 14 Shock work most likely elevated the status of the Soviet worker as a symbol and of some Soviet workers as individuals, rather than of the working class as a class. Later, in August 1935, coalminer Aleksei Stakhanov hewed fourteen times the target for his shift. In an initially uncertain sequence of steps, the regime seized on the achievement and used the Stakhanovite label to reward norm-busting workers, often young men in priority industries. During the period through to the war, as many as a third of trade union members were Stakhanovites. Once awarded a high-end separate apartment, or a new motorcycle, or other material inducements, top Stakhanovites would become part of the high culture of the Soviet workplace, participating in an ongoing ritual of special conferences and festivals that constantly displayed the significance of the proletarian achievement. But for their leading Western historian, Lewis Siegelbaum, the top echelon of the Stakhanovites was not a workers’ aristocracy, but ‘part of the highest stratum of Soviet society’. They transcended their status as workers. ‘Never before,’ Siegelbaum argues, ‘had workers been the object of such attention and adulation.’ Yet Stakhanovism further differentiated wages, forcing lower-level workers to work harder to earn an adequate wage, often on piece rates, subduing the workforce as a whole. 15 Inevitably, Stakhanovites infuriated some of their co-workers. At the moment when workers were extravagantly celebrated in national culture, the working class was losing further coherence.

After the Germans invaded, many workers who were not drafted into the army were required to remain in their factory, back in the rear, subject to a still tougher regimen of working practices. Others, who lived in territory more directly threatened by the Nazis, were forced to evacuate, complete with their plant, to new locations further east. Hatred of the enemy and determination to defend the motherland kept productivity high: workers played their part in the Soviet industrial triumph of the Second World War. The experience strengthened ethnic rather than class ties (and Russianness was especially celebrated). 16 And they were still finding their own individual way to survive gross material desperation. Not all workers embraced the shift to the even greater self-sacrifice which the regime required for victory. In September 1941, officials noted that groups of textile workers in Ivanovo oblast’ had downed tools before the end of the working day, with the intention of protesting against their ten-hour shifts; a rash of incidents amounted to a ‘strike mood’. Other workers continued the illegal tramp to new factories, running away from difficulties or towards a better opportunity. A tough 1944 decree re-targeted the ‘deserters’. 17 Yet out of the mass destruction of the war came a new approach to industrial labour.

The late Stalinist era (1945–53) occasioned very significant changes, though the evidence is contradictory. Dense archival research has proved that ordinary workers’ living conditions in many cities were unspeakable: malfunctioning sanitation, no domestic water, feeble local infrastructure, desperate overcrowding. Crime was rife. Meanwhile, most of the draconian Stalinist labour code remained intact. Young workers suffered especially. Many had lost close relatives during the war; some were orphans. Their crude training programmes amounted even to indentured labour. Yet the war still changed everything. It had created expectations, however transient, that sacrifice deserved reward; it reminded all kinds of citizens, including many officials, that the promise of the revolution must now be renewed; and its physical destructiveness was so great that new policies were needed simply to rebuild industry and allow basic urban life to go on. The end of rationing in 1947 was often remembered as a populist measure. Legal changes of 1951 were a faint harbinger of the gentler labour code that is associated with Khrushchev. Work attendance was now no longer formally connected to the disbursement of welfare benefits. Most striking of all, a housing construction programme got under way, and significant numbers of workers were rehoused in better conditions. 18

The Soviet Worker’s Heyday of Mixed Comforts, 1953–91

Although some essential foundations of social reform were laid between 1945 and 1953, the life of the Soviet worker still reached a nadir during late Stalinism. Stalinist government remained arbitrary, uninterested in the fate of individual workers, and thus incapable of adequately alleviating the catastrophic impact of the war on their living standards. For all the complexity of periodization, 1953 was a great disjuncture, leading to de-Stalinization, which redefined the relationship between the newly normalized application of power and the fate of individually respected citizens. In 1956, the year of the secret speech, the labour code was greatly lightened. It was no longer a criminal offence to move of one’s own volition to a new job, and the aggressive punishments for workplace infractions were shelved. Trade unions became more substantial. The right to work was more obviously protected, as managers could no longer sack workers so easily. 19 More generally, the social rights that were laid down most extensively, but during the Stalin years meretriciously, in the 1936 constitution, started to gain meaning. The most dramatic change in workers’ lives came about because of the mass housing programme. While the origins of this epochal social reform lay in the Second World War and late Stalinism, the programme only took off in the mid-1950s, after Khrushchev had decided that it should. He claimed in December 1963 that 108 million Soviet citizens had improved their housing conditions since 1954; and it was certainly true that Soviet per capita construction towered over that of all other European countries between 1957 and 1963. 20 With the programme focused on the cities, and with much new housing formally owned by industrial plants, workers disproportionately benefited.

The result of this was a highly imperfect equalization of living standards. ‘Obsessing about equality’ ( uravnilovka ) had been rejected as a principle during the early years of Stalinism. By contrast, an egalitarian ambition and ethic was crucial to the development of policy during the Khrushchev and Brezhnev years, notwithstanding the ongoing formal rejection of ‘petty equalization’, and the corruption and declining social mobility of late socialism. It was a complicated and untidy process, but one which gave a very distinctive quality to Soviet working class life between the 1950s and 1980s. Over the two decades from 1956 the difference between higher and lower wages fell, the lowest wages rose disproportionately, and incomes for higher groups (excluding their additional privileges) often remained steady. The ratio of average wages among the top 10 per cent to the bottom 10 per cent fell from 8:1 to 5:1; the income of engineering-technical employees was 166 per cent that of workers in 1955, but only 127 per cent in 1973. On the one hand, this was the improvement of workers’ conditions, and on the other it was the ‘proletarianization’ of some engineering–technical intelligentsia (ITR) jobs. 21 On a micro scale, the gap between workers and their bosses in any given factory was smaller than in capitalist countries. Workers, trade union officials, and management at certain favoured plants all enjoyed access to some of the same privileges; at the Kirov Metal Works in Leningrad, the polyclinics had a high reputation, and so a worker there might have enjoyed easier access to good healthcare than a manager elsewhere. True, workers in certain industries retained their privileges. In 1975, a coal miner still earned more than double the wages of a textile worker, and 1.7 times the average wage. Nevertheless, the shift towards greater equality was deliberate. Khrushchev-era reforms increased the minimum wage, part of the wider programme of making workers’ living standards a priority, and subsequent wage reforms in the 1960s and 1970s further narrowed the gap between higher and lower earners. Thus the director of an industrial trust earned eleven times the minimum wage in 1960, but 6.5 times the minimum in 1975 (admittedly, he also enjoyed many non-monetary privileges and the benefits of his profitable connections). 22

Workers retained their cachet in the workers’ state. They were at the centre of the utopian aspirations of the Khrushchev era. At the completion of one construction project, and before starting the next, the main heroic worker in the film The Heights ( Vysota , dir. A. Zarkhi, 1957) promises to build a Soviet industrial cityscape that will be visible ‘from Mars’. Even during the Brezhnev period, workers continued to be co-opted into participation in the vanguard of the socialist project. A member of the Saratov intelligentsia, born around 1950, remembered in 2002 that during late socialism she had ‘sincerely wanted’ to join the party, ‘but conditions were such that they picked party members from among workers. I never was a worker. I have nothing against physical labour, but nowhere could I write on an application that I had been a proletarian’. 23 Meanwhile, the privileges of workers in climatically extreme zones, especially the Far North and Far East, were entrenched. People travelled there in their hundreds of thousands to triple their pay. Conditions were arduous. Facilities were often crude. In Bratsk, in Siberia, 30,000 workers moved on from the hydroelectric plant between 1966 and 1970, one third, apparently, because of poor quality housing and childcare. 24 They did not fear unemployment. Neither did workers in conventional factories in more ordinary places, where shop floor discipline suffered and payment incentives were inadequate to prevent the uncontrollable growth of the second economy. But in 1962, the population faced price rises on basic goods, and workers believed they were worst affected.

Women workers remained central to the industrial project, not least because of their combined domestic and factory duties. In both arenas, women were subordinate, and subordination in one reinforced subordination in the other. They made a disproportionate contribution to the ranks of the low paid and badly skilled. Yet they might be glamorized; the film Mum got Married ( Mama vyshla zamuzh , dir. Vitalii Mel’nikov, 1969) shows female building workers sunbathing in their underwear. In other contexts, women were valorized. Female workers on one of the signature construction projects of late socialism, the Baikal-Amur Railway (BAM), were described in heroic terms in media profiles. The gap between representation and reality was wide, or perhaps cultural representations of all types made female workers vulnerable; many women left the BAM worksite prematurely, and cases of sexual abuse and verbal bullying, and this in the 1970s and 1980s, were legion. 25 It did not seem much advance on 1917. Seventy years after the revolution, the lifecycle of the Soviet worker had reached a dead end.

If Soviet workers were central to the success of the revolution in 1917, they were part of the problem by the 1980s. As they had done since the 1930s, workers exercised personal autonomy in ways that could be inconsistent with high productivity and thus with the grander goals of the Soviet project. During late socialism a lax shop floor culture was exacerbated by excessive time spent moonlighting and queuing. Andropov’s anti-corruption drive and Gorbachev’s perestroika were both, in part, responses. But the latter was the bluntest of reform programmes. Many workers sensed this: that they were at risk of losing a social system that in important ways had served them well. Finally, some of them found their voice. Miners struck in the summer of 1989. Their demands were inconsistent with the trajectory of Gorbachev’s economic policies. They wanted better wages and working conditions, and a measure of control over the workplace, at the expense of the central ministries. Although the latter demand suggested something of Gorbachev’s decentralizing vision, the miners, like many other workers, voiced mistrust of the Government. 26 Their failed intervention was the last episode in the mythology of the Soviet working class.

Cultures of Working-class Life

The discussion so far has focused on work and living standards, broadly defined. Yet from its earliest days, the Bolshevik regime announced its determination to eliminate illiteracy and to create a revolutionary culture that specifically fostered, rather than excluded, the working class. Founded in 1917, the Proletkult was charged with making existing forms of high culture more accessible to a proletarian audience, and making it easier for workers themselves to participate in the creation of cultural forms. The Proletkult limped on to 1932, but was really a phenomenon of the revolutionary period. 27 Other organizations, such as the Russian Association of Proletarian Writers, were also associated with the mission. This was a fundamentally optimistic vision of the possibilities of working class life, but it was replaced by a top-down approach to cultural production during the Stalin period, albeit one founded on the accessible aesthetic of Socialist Realism.

Workers’ clubs and palaces of culture were established to give workers the chance to socialize and be socialized in relative comfort. In 1925, 450 workers’ clubs were located in Moscow Region. The clubs, which were generally associated with a particular factory, had their own book collections and served as venues for film shows, amateur dramatics, dances, and ideological instruction. White collar employees had access to the clubs, but it seems that up to 60 per cent of members in the 1920s were manual workers. 28 Meanwhile, the ‘ likbez ’ movement sought to eliminate illiteracy. By the outbreak of the Great Fatherland War, huge strides had been made towards this goal, and primary education had been largely universalized. In the 1920s and 1930s, illiterate workers went to evening classes after long factory shifts. This facilitated other elements of working-class socialization in the period: participation in party and trade union meetings. John Scott, an American worker in Magnitogorsk in the 1930s, described his co-workers’ participation in official culture, but also pointed to the other side of worker leisure in the labourers’ barracks where he lived: ‘Work was finished for the day, supper was on the stove, it was time for a song. And they sang! Workers’ revolutionary songs, folk tunes, and the old Russian romantic lyrics. A Tartar worker sang a couple of his native songs. A young Ukrainian danced.’ 29

One part of working-class culture was thus constructed by the Soviet project, with or without the input of workers; the rest was the spontaneous product of working-class life, as it always had been. Writing about the 1920s, Diane Koenker draws attention to an official workers’ identity, which posited the existence of a ‘total proletarian’, who actively engaged in the Soviet project and who perceived his interests as congruent with those of his factory and the wider economy, and a workers’ version of worker identity, which accepted some of these nostrums together with ‘political disaffection, materialism, consumerism, hooliganism, selfishness, drinking, swearing, fighting, and bullying of women by men.’ 30

Consumerism was central to working-class culture, official and self-defined, throughout the Soviet period. Even when shortages were especially acute, the cultural system invited workers to consume all kinds of goods. In the 1920s, when the NEP legitimated conspicuous consumption in a way that Soviet ideology before and after could not tolerate, certain consumer goods—appropriate books, bicycles, decent but not showy clothes—were explicitly labelled socialist. 31 By the Stalin period, public culture lauded curtains, tablecloths, and lampshades: the accompaniments of cultured and comfortable domestic living, something that was impossible to attain in a workers’ barracks. Yet even aspiring to own such items and to live in such a way was to buy into the vision of cultured life, to aim to attain kul’turnost’ . But kul’turnost’ w as not just for workers, it was for everyone, and becoming cultured might have enhanced workers’ citizenhood, but it also helped to displace their sense of class.

Later, when Khrushchev talked of the transition to communism, consumption—the achievement of material plenty—was half of what he meant. The mass housing programme was at the core of this vision. Much of consumption culture was therefore associated with the home. While workers benefited in large numbers, they did not do so specifically because they were workers. Television became an increasingly significant part of working-class home life, perhaps more than for other social groups. ‘The whistle blows. Your working day is over. The day’s labour is finished, and the evening’s relaxation begins,’ wrote a Soviet commentator in 1965, ‘[S]ix to eight hours of TV programming awaits you. At work you are stern and reserved, but now you will laugh like a child’. 32 Here the worker’s home life seems more important than his life at work, an improbable reversal on the heroism of 1917, and precisely symptomatic of the breakdown of class solidarity. Moreover, the new housing microdistricts that dominated Soviet cities from the 1950s were populated by people of different ‘classes’, and class feeling rarely had a chance to cohere in particular neighbourhoods or streets. 33

Domestic culture divided into masculine and feminine spheres more sharply in working-class than in other urban households. Working-class women had the heaviest double burden of all urbanites. In a sociological study undertaken during late socialism, women from families of unskilled labour spent a daily average of four hours 51 minutes doing housework, queuing for goods, and undertaking other domestic-related tasks, making their working day last nearly twelve hours. On average, their husband’s total working day (shop floor plus domestic demands) was more than two hours shorter. The differential between men’s and women’s total working contributions narrowed further up the skill level of the working class, and converged still closer among the managerial stratum, but the demands on women were always the greater. Similarly, working-class households seem to have taken decisions about domestic consumption that were less favourable to women. Families from the ITR would probably (by no means definitely) have had higher incomes than families of workers, but that alone could not account for the following differences in spending habits. In a study of 1967, 20 per cent of worker families owned fridges, but 56 per cent of ITR families did; 57 per cent of worker households had washing machines, compared to 82 per cent of ITR; and for vacuum cleaners, the figures were 11 per cent and 37 per cent. Plainly, a cultural difference forced a disproportionate number of working-class women to spend their late afternoons making repeat visits to shops, their evenings cleaning floors the hard way, and their Sundays washing clothes by hand. 34

Men, meanwhile, often possessed a formidable array of DIY skills; they might be able to fix up a room to provide sleeping and living quarters for three generations of their family, not to mention the family pets. 35 Male working-class sociability often revolved around drink and bad language and deliberately excluded women. If male workers had gathered in simple taverns in the 1920s, by late socialism their descendants met in the yards of blocks of flats, with vodka glasses perched on the bonnet of someone’s Zhiguli (though often the bonnet was up, as advanced car maintenance was another expected accomplishment of those male workers who owned an automobile). Men took disproportionate advantage of the increase in leisure hours and wages to follow other hobbies. For instance, new stadiums were built in Soviet cities from the 1950s on; spectator sport became more popular, and male workers were particular enthusiasts. Coal miners across the union were fans of the football club Shakhter Donetsk. 36

Another feature of increased access to leisure was new opportunities to go on holiday. The 1936 constitution laid down the right to rest, something mocked by a group of school cleaners from Velikie Luki who wrote to Molotov in 1937: ‘We, the cleaners, don’t see any of this rest, because most of us are working all hours in order to feed ourselves and our children’. 37 Nevertheless, an infrastructure of sanatoria and resorts was under construction from the 1930s. People accessed this through their trade unions, and among those who lacked special connections, workers enjoyed as much chance as anyone else to go on holiday, either singly or en famille . Soviet vacations had particular qualities, which derived ultimately from ideology. For example, they were often designed to provide health remedies that would in turn maximize economic productivity. In 1970, 26 per cent of vacations took place in sanatoria, where attention to healthcare was very serious. 38

Of course, many of these characteristics were shared in slightly different configurations by other Soviet ‘classes’. Vacationing without one’s spouse in a Soviet ‘rest home’, a common experience in the USSR after 1953, famously offered all kinds of chances for extra-marital adventuring, quite possibly with a member of the intelligentsia or the higher management. Even someone as steeped in intelligentsia life as Iurii Trifonov, the great novelist of Moscow life during late socialism, was a passionate fan of spectator sports. Thanks to television and the mixed neighbourhoods that were characteristic of Soviet cities, where people of different classes lived together, all kinds of people were drawn to watching football. Men and women from factory and university alike could enjoy the cinema, though cheap tickets and screenings in workers’ clubs made it particularly accessible to workers. 39 Especially during the second half of the USSR’s existence, it can be difficult to draw consistent analytical distinctions between the life of the Soviet worker and the lives of other Soviet urban dwellers. Many leisure pursuits were more national than class-based. People of all classes owned dachas and sought out encounters with nature; in the hugely popular film Moscow Doesn’t Believe in Tears ( Moskva slezam ne verit , dir. Vladimir Menshov, 1979) people of various classes, from workers to factory management, in time settings varying from the 1950s to the 1970s, enjoy the same nature-based pursuits and share a common idiom of sociability. Beyond the shop floor, then, did the life of the Soviet worker in mature Soviet society only differ from that of other citizens by degree, rather than by kind?

The Moral Economy of the Soviet Worker

For sure, the class identities of most Soviet citizens unified as the decades went on. In particular, the structure of the Soviet economy was causing some conventionally working-class and ITR jobs to converge. Nevertheless, the intellectual and the worker remained quite distinct. ‘There was no contact whatsoever between workers and intellectuals’, writes Geoffrey Hosking in his survey of Russian nationhood in the USSR: ‘they lived in different intellectual and moral universes’. A pupil at a sought-after school in Saratov that specialized in English language instruction remembered in 2002 that ‘the families of only two pupils’ in her class ‘didn’t belong to the so-called intelligentsia and were workers’. She herself was the daughter of a professor. In Ufa in 1970, it was reckoned that 72.5 per cent of intelligentsia fathers had children who entered intelligentsia professions, while 59.1 per cent of worker fathers had worker children. 40 So if workers were a discrete community, did certain attitudes identify it?

If the intelligentsia were interested in ideas, did the workers simply want to earn a crust? Certainly, some of the most innovative of historical research has suggested that workers were motivated by the need to make a living. 41 In a sociological survey published in 1965, 29.7 per cent of workers with up to four years’ schooling, and 26.2 per cent of those with five or six, thought that ‘any work is good if it pays well’. 42 The more education that a citizen had, the more he or she valued other features of their work. But even for those workers who had a conscious sense of their skills, and who took pleasure in their labour and in their sense of their own relative position in the workforce, self-worth was closely related to capacity to earn. In 1989, an electrician who worked in the mining industry in Donetsk remembered earning ‘good money’ during the previous thirty years, which had funded considerable (and gender-enlightened) consumption: ‘When I got married, my wife began buying new things for the home: furniture, a refrigerator, a TV set, a washing machine, vases and crystal ware. We needed more money, so I decided to change my job and come to the mine.’ 43

Yet one of the deepest wellsprings of working class action during 1917 was the acute desire to live in a ‘dignified’ and ‘honourable’ way. Workers did not rise up simply for more bread. Steve Smith’s research on Petrograd workers concluded that their sense of their own exploitation was more moral than economic: ‘their treatment as “things” and not as “people”’ drove them to organize for revolution. For Smith, therefore, workers’ interests went far beyond that which could be crudely measured by their material circumstances. 44 This perhaps helped to create one of the most durable of working-class attitudes: a commitment to equality and social justice (which yielded concomitant material benefits).

Stalinist industrialization was explicitly predicated on the assumption that equality was harmful, since Stalin declared that it was in 1931. Differential wage rates, socialist competition, shock work, Stakhanovism: all of these set up an unevenly provisioned workforce, and an unequal industrial society. The aim was to boost incentives to productivity and discipline, and perhaps deliberately to fracture the working class and to secure the advantages of the ruling elite. Nevertheless, many workers remained committed to equality as a principle. The Stalinist regime played on their feelings in a populist fashion during, especially, the Cultural Revolution and the great terror, encouraging the ‘baiting’ of specialists and the denunciation of bosses. But the commitment was consistent. ‘Genuine demands for egalitarianism are observed [by some workers]’, noted a party report on Smolensk in 1928. ‘Those who demand this maintain that the entire evil lies in unequal pay [and that] a man receiving a high salary can afford more than all the rest’. The growing equality that characterized Soviet society after 1953—marked most famously by the housing programme, conceived and executed in a spirit of relative equality—showed an alignment, albeit partial and imperfect, between the moral economy of the worker and the aspirations of the party and government. 45

Equality was connected to fairness. The commitment to elementary justice had a pre-modern flavour, deriving as it did from the Russian village and timeless notions of pravda . In the early Soviet period, many workers trusted the party to deliver justice. The sense that the party was betraying the social justice to which the Russian working class was historically committed caused a number of strikes during the 1930s, notably the Teikovo events of 1932. 46 Later, when the working class had less consciousness of itself and its shared commitments, the notion of fairness remained important. Take the furious responses to Khrushchev’s price rises of summer 1962. A KGB report of 2 June showed how workers from various towns and cities were calling for strikes and uprisings in response to this attack on their living standards. In Donetsk, the KGB noted: ‘a paper was stuck to a telegraph pole with the message: “We have been and are being duped. We will struggle for justice.”’ In Novocherkassk, a huge demonstration in response to the price rises was shot down by the authorities. One of the reasons why matters got so far out of hand was the insensitivity of the director of the Budennyi Electric Locomotive Construction Factory in his meeting with striking workers; he made little of their concerns about the disproportionate effect that the higher prices would have on workers rather than on engineers and management. In a flagrant rejection of elementary justice, he even seemed to mock them. 47

From the 1950s, rights started to assume some kind of practical meaning in Soviet society. To generalize, rights probably meant different things to workers than they did to the intelligentsia. The rights that workers wanted were social rights, such as the right to housing and pensions. By contrast, small numbers of dissident intellectuals took great risks to try to shame the regime into granting the human rights, with a focus on political and civil rights, that its constitution promised. Dissident trade unions and worker groupuscules dedicated to social rights were still fewer. They included the Association of Free Trade Unions, founded in January 1978, and the Working Group for the Defence of Labour, Economic and Social Rights in the USSR. 48

Workers thus used rights in a systemic way, employing the social rights talk that flooded into Soviet public culture during and after the Khrushchev years. They were not dissidents. But the evidence we have suggests that other citizens did the same, for example in the way that they invoked their rights when petitioning the authorities about their problems. The expansion of welfare rights helped all classes; collective farm workers, for example, became eligible for pensions in 1964. Nevertheless, it is likely that social rights chimed with many working-class concerns, and at certain times, workers called in their rights with particular force; in June 1962, in the wake of the price rises, the KGB noted about Moscow: ‘On Sirenevyi bouleveard, a flyer was posted up with the appeal to workers “to struggle for their rights and for the reduction of prices”.’ Arguably, the expansion of welfare rights particularly benefited workers. It was characteristic that the rhetoric that heralded the pensions reform of 1956 was all about reapportioning ‘the property of the workers’. 49 Much of the Soviet world of welfare was dispensed within the company town, the huge plant complex, which might provide housing, and which, via one’s trade union, regulated access to vacations, social security, pensions, and the like. Although these goods were for everyone, the company town—the physical manifestation of enterprise paternalism—was the worker’s territory, and he remained committed to it even after the Soviet collapse.

Hard headed and practical, workers adopted the language of the regime—they ‘spoke Bolshevik’—when it helped them to get what they wanted. It seems unlikely at any stage of Soviet power that they were locked inside a totalitarian discourse from which they could not escape. They made sense of notions of socialism, dignity, equality, justice, and social rights, all of which, in particular ways—ways that changed over time and were contingent on circumstances—were inextricable aspects of the Soviet project. Yet there were some constants, at least in the way that people made sense of their own ideas. Even at the end of the Gorbachev period, many workers still expressed their desires within what they understood to be the core and original tenets of the party. A retired miner from Donetsk who had never been a party member looked back on his career in 1989, musing, ‘In the past the party united ideologically-minded Communists, the followers of Lenin. After the death of Lenin, it became a group of rascals.’ He went on: ‘I am a genuine Bolshevik, in my soul. I know for sure that there are very few genuine communists now.’ 50

Institutions evolved that locked such instincts, where they existed, into the stability of the Soviet order. The mission of trade unions was to support the long-term interests of workers, which by official definition coincided with those of party and government. In the short term, unions connived in subordinating their members’ immediate goals in the quest for higher productivity. But they also offered welfare. And when the behaviour of an individual boss conflicted with socialist norms, the union could take the side of a worker and defend him or her in an industrial dispute—not in a strike, but in a workplace commission.

For all the ambiguity of their status, trade unions were institutions which tied workers more closely to the Soviet project. They did not foster class solidarity: that was a phenomenon that did not much survive the 1930s. Yet the Soviet Union remained the workers’ state. It always placed the heroic worker at the centre of its pantheon, and ultimately provided workers with many of the goods that they wanted, however shoddy or inadequate, as well as a measure of moral satisfaction. The Soviet system functioned and survived as it did because the workers, emasculated as they might have been, accepted the programme. Some accepted it by default, others with a measure of enthusiasm. Hardly any welcomed the end of the Soviet Union. They would all face a desperate post-Soviet tomorrow.

Further Reading

Filtzer, Donald , Soviet Workers and Late Stalinism: Labour and the Restoration of the Stalinist System after World War II (Cambridge: Cambridge University Press, 2002 ).

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Filtzer, Donald , Soviet Workers and de-Stalinization: The Consolidation of the Modern System of Soviet Production Relations (Cambridge: Cambridge University Press, 1992 ).

Filtzer, Donald , Soviet Workers and the Collapse of Perestroika: The Soviet Labour Process and Gorbachev’s Reforms, 1985–1991 (Cambridge: Cambridge University Press, 1994 ).

Goldman, Wendy Z. , Women at the Gates: Gender and Industry in Stalin’s Russia (Cambridge: Cambridge University Press, 2002 ).

Koenker, Diane P. , Republic of Labor: Russian Printers and Soviet Socialism, 1918–1930 (Ithanca, NY: Cornell University Press, 2005 ).

Kotkin, Stephen , Magnetic Mountain: Stalinism as a Civilization (Berkeley, CA: University of California Press, 1995 ).

Lewin, Moshe , The Making of the Soviet System: Essays in the Social History: Essays in the Social History of Interwar Russia (London: Methuen, 1985 ).

Matthews, Mervyn , Class and Society in Soviet Russia (London: Allen Lane, 1972 ).

Siegelbaum, Lewis H. and Ronald Grigor Suny , Making Workers Soviet: Power, Class, and Identity (Ithaca, NY and London: Cornell University Press, 1994 ).

Siegelbaum, Lewis H. and Daniel J. Walkowitz , eds., Workers of the Donbass Speak: Survival and Identity in the New Ukraine, 1989–1992 (Albany, NY: State University of New York Press, 1995 ).

Smith, Mark B. , Property of Communists: The Urban Housing Program from Stalin to Khrushchev (DeKalb, IL: Northern Illinois University Press, 2010 ).

Smith, S.A. , Red Petrograd: Revolution in the Factories (Cambridge: Cambridge University Press, 1983 ).

1 See Stephen Kotkin’s elegant historiographical summary in Labor History , 32 (1991), 604–620 .

2 Cf. Alexei Yurchak , Everything Was Forever Until It Was No More: The Last Soviet Generation (Princeton, NJ: Princeton University Press, 2006) , where the focus is not on workers.

3 S.A. Smith , Red Petrograd: Revolution in the Factories , (Cambridge: Cambridge University Press, 1983), 195 ; Victoria Bonnell , Iconography of Power: Soviet Political Posters under Lenin and Stalin (Berkeley, CA: University of California Press, 1997) .

4 Diane P. Koenker , ‘Urbanization and Deurbanization in the Russian Revolution and Civil War’, Journal of Modern History , 57 (September 1985).

5 Igal Halfin , From Darkness to Light: Class, Consciousness, and Salvation in Revolutionary Russia (Pittsburgh, PA: University of Pittsburgh Press, 1999) ; Sheila Fitzpatrick , ‘Ascribing Class: The Construction of Social Identity in Soviet Russia’, Journal of Modern History 65 (December 1993) .

6 Kevin Murphy , Revolution and Counterrevolution: Class Struggle in a Moscow Metal Factory (New York and Oxford: Berghahn Books, 2005) ; cf. Diane P. Koenker , Republic of Labor: Russian Printers and Soviet Socialism, 1918–1930 (Ithaca, NY: Cornell University Press, 2005) and William J. Chase , Workers. Society, and the Soviet State: Labor and Life in Moscow, 1918–1929 (Urbana, IL: University of Illinois Press, 1987), 293 ; for the trade-off, Simon Pirani , The Russian Revolution in Retreat, 1920–1924: Soviet Workers and the New Communist Elite (London: Routledge, 2008).

7 Chris Ward , Russia’s Cotton Workers and the New Economic Policy: Shop-Floor Culture and State Policy 1921–1929 (Cambridge: Cambridge University Press, 1990), 32 ; Ronald Grigor Suny , The Baku Commune, 1917–1918: Class and Nationality in the Russian Revolution (Princeton, NJ: Princeton University Press, 1972).

8 Moshe Lewin , The Making of the Soviet System: Essays in the Social History: Essays in the Social History of Interwar Russia (London: Methuen, 1985) ; for workers’ percentages: Donald Filtzer , ‘Stalinism and the Working Class in the 1930s’ in John Channon , ed., Politics, Society and Stalinism in the USSR (London: Macmillan, 1998), 171 ; for Leningrad: Lewis H. Siegelbaum , Stakhanovism and the Politics of Productivity in the USSR, 1935–1941 (Cambridge: Cambridge University Press, 1988), 214 ; Lewis H. Siegelbaum , ‘Industrial Accidents and their Prevention in the Interwar Period’, in William O. McCagg and Lewis Siegelbaum , eds., The Disabled in the Soviet Union: Past and Present, Theory and Practice (Pittsburgh, PA: University of Pittsburgh Press, 1989), 85–118.

9 Gabor T. Rittersporn , ‘From Working Class to Laboring Mass: On Politics and Social Categories in the Formative Years of the Soviet System’ in Lewis H. Siegelbaum and Ronald Grigor Suny , Making Workers Soviet: Power, Class, and Identity (Ithaca, NY and London: Cornell University Press, 1994), 271 ; Stephen Kotkin , Magnetic Mountain: Stalinism as a Civilization (Berkeley, CA: University of California Press, 1995) ; Matthew J. Payne , Stalin’s Railroad: Turksib and the Building of Socialism (Pittsburgh, PA; University of Pittsburgh Press, 2001), 126.

10 Wendy Z. Goldman , Women at the Gates: Gender and Industry in Stalin’s Russia (Cambridge: Cambridge University Press, 2002) 1, 279, 281 ; M.J. Ilic , Women Workers in the Soviet Inter-war Economy: from ‘Protection’ to ‘Equality’ (Baingstoke: Macmillan, 1999) .

11 Donald Filtzer , Soviet Workers and Stalinist Industrialization: the Formation of Modern Soviet Production Relations, 1928–1941 (London: Pluto, 1986) .

12 Sheila Fitzpatrick , Education and Social Mobility in the Soviet Union, 1921–1934 (Cambridge: Cambridge University Press, 1979) .

13 Kendall E. Bailes , Technology and Society under Lenin and Stalin: Origins of the Soviet Technical Intelligentsia, 1917–1941 (Princeton, NJ: Princeton University Press, 1978), 193, 196 ; Rittersporn, ‘From Working Class to Laboring Mass’ , 271.

14 Hiroaki Kuromiya , Stalin’s Industrial Revolution: Politics and Workers, 1928–1932 (Cambridge: Cambridge University Press, 1988), 320, 121.

Siegelbaum, Stakhanovism, 148, 170, 178, 180; cf. Filtzer, ‘Stalinism and the Working Class’ , 178.

16 For the economy, see John Barber and Mark Harrison , The Soviet Home Front, 1941–1945: A Social and Economic History of the USSR in World War II (London: Longman, 1991) ; for Russian identity, see Geoffrey Hosking , Rulers and Victims: The Russians in the Soviet Union (Cambridge, MA: Belknap Press of Harvard University Press, 2006) , ch. 6.

17 B.N. Kazantsev and A.N. Sakharov , Trudovye konflikty v SSSR, 1930–1991: Sbornik statei i dokumentov (Moscow: RAN, 2006) 277 (doc. 26); 280 (doc. 28).

18 Donald Filtzer , The Hazards of Urban Life in Late Stalinist Russia: Health, Hygiene, and Living Standards, 1943–1953 (Cambridge: Cambridge University Press, 2010) ; Donald Filtzer , Soviet Workers and Late Stalinism: Labour and the Restoration of the Stalinist System after World War II (Cambridge: Cambridge University Press, 2002) ; E. Iu. Zubkova , Obshchestvo i reformy, 1945–1964 (Moscow: Rossiia Molodaia, 1993) ; Mark B. Smith , Property of Communists: The Urban Housing Program from Stalin to Khrushchev (DeKalb, IL: Northern Illinois University Press, 2010) .

19 Donald Filtzer , Soviet Workers and De-Stalinization: The Consolidation of the Modern System of Soviet Production Relations, 1953–1963 (Cambridge: Cambridge University Press, 1992) , ch. 2.

Smith, Property of Communists , 102–4.

21 Murray Yanowitch , Social and Economic Inequality in the Soviet Union: Six Studies (White Plains, NY: M.E. Sharpe, 1977), 23–25, 30–31.

22 Blair A. Ruble , Soviet Trade Unions: Their Development in the 1970s (Cambridge: Cambridge University Press, 1981), 105, 85, 78.

23 Donald J. Raleigh , ed., Russia’s Sputnik Generation: Soviet Baby Boomers Talk About Their Lives (Bloomington IN: Indiana University Press, 2006), 80.

Ruble, Soviet Trade Unions , 102.

25 Christopher J. Ward , Brezhnev’s Folly: The Building of BAM and Late Soviet Socialism (Pittsburgh, PA: University of Pittsburgh Press, 2009), 77.

26 Jonathan Aves , ‘The Russian Labour Movement 1989–91: The Mirage of a Russian Solidarność’ in Geoffrey A. Hosking , Jonathan Aves , and Peter J.S. Duncan , eds., The Road to Post-Communism: Independent Political Movements in the Soviet Union, 1985–1991 (London: Pinter, 1992), 139–140.

27 Lynn Mally , Culture of the Future: The Proletkult Movement in Revolutionary Russia (Berkeley, CA: University of California Press, 1990) .

28 John Hatch , ‘Hangouts and Hangovers: State, Class and Culture in Moscow’s Workers’ Club Movement, 1925–1928’, Russian Review 53 (1994), 98–100.

29 John Scott , Behind the Urals: An American Worker in Russia’s City of Steel (Bloomington & Indianapolis, Indiana University Press, 1989 [1942]), 41.

Koenker, Republic of Labor , 314.

Koenker, Republic of Labor , 184.

32 Kristin Roth-Ey , Moscow Prime Time: How the Soviet Union Built the Media Empire that Lost the Cultural Cold War (Ithaca, NY and London: Cornell University Press, 2011), 201.

Smith, Property of Communists , ch. 3.

Yanowitch, Social and Economic Inequality , 173, 43.

35 As I myself witnessed in Moscow in 1999. For the phenomenon more generally, see Susan E. Reid , ‘Communist Comfort: Socialist Modernism and the Making of Cosy Homes in the Khrushchev Era’, Gender and History 21 (2009), 465–498, at 477.

36 Robert Edelman , Serious Fun: A History of Spectator Sports in the USSR (New York: Oxford University Press, 1992), 189.

37 A.Ia. Livshin et al., eds., Pis’ma vo vlast’, 1928–1939: zaiavleniia, zhaloby, donosy, pis’ma v gosudarstvennye struktury i sovetskim vozhdiam (Moscow: ROSSPEN, 2000), 380 (doc. 222).

38 Diane P. Koenker , ‘The Proletarian Tourist in the 1930s: Between Mass Excursion and Mass Escape’ in Anne E. Gorsuch and Diane P. Koenker , eds., Turizm: The Russian and East European Tourist under Capitalism and Socialism (Ithaca, NY: Cornell University Press, 2006), 119–40 ; Diane P. Koenker , ‘Whose Right to Rest? Contesting the Family Vacation in the Postwar Soviet Union’, Comparative Studies in Society and History 51 (2009), 401–425.

39 Robert Edelman , Spartak Moscow: A History of the People’s Team in the Workers’ State (Ithaca, NY: Cornell University Press, 2009), 260 ; Roth-Ey, Moscow Prime Time , 80–81.

Hosking, Rulers and Victims , 297; for the oral history, see Raleigh, ed., Russia’s Sputnik Generation , 91; for Ufa data: Yanowitch, Social and Economic Inequality , 117.

41 In her influential corpus of writings, Sheila Fitzpatrick places this motive within a wider universe of ideology. See also Mark Edele , Stalinist Society 1928–1953 (Oxford: Oxford University Press, 2011) .

42 Mervyn Matthews , Class and Society in Soviet Russia (London: Allen Lane, 1972), 137.

43 Lewis H. Siegelbaum and Daniel J. Walkowitz , eds., Workers of the Donbass Speak: Survival and Identity in the New Ukraine, 1989–1992 (Albany, NY: State University of New York Press, 1995), 47.

44 Smith, Red Petrograd , 94 and elsewhere; also Smith , ‘Workers against Foremen in St Petersburg, 1905–1917’ in Siegelbaum S.A. and Suny , eds., Making Workers Soviet , 136.

45 For workers and the terror, see Wendy Z. Goldman , Terror and Democracy in the Age of Stalin: The Social Dynamics of Repression (Cambridge: Cambridge University Press, 2007) ; for the party report, Kuromiya, Stalin’s Industrial Revolution , 244; for equality in housing, Smith, Property of Communists , 130.

46 Jeffrey J. Rossman , Worker Resistance under Stalin: Class and Revolution on the Shop Floor (Cambridge, MA: Harvard University Press, 2005) .

47 For the KGB reports: Kazantsev and Sakharov, Trudovye konflikty , 324 (doc. 51), 319 (doc. 49); for Novoberkassk, Samuel H. Baron , Bloody Saturday in the Soviet Union: Novocherkassk, 1962 (Stanford, CA: Stanford University Press, 2001) , ch. 2.

48 Linda J. Cook , The Soviet Social Contract and Why it Failed: Welfare Policy and Workers’ Politics from Brezhnev to Yeltsin (Cambridge, MA: Harvard University Press, 1993), 73–74 ; Mark B. Smith , ‘Social rights in the Soviet dictatorship: the constitutional right to welfare from Stalin to Brezhnev’, Humanity 3 (2012), 385-406.

Trudovye konflikty , 319 (doc. 49); Sotsial’noe obespechenie , 1956, 5–6, 1.

‘Speaking Bolshevik’ is Kotkin’s groundbreaking formulation. For the retired miner: Siegelbaum and Walkowitz, eds., Workers of the Donbass Speak , 51–52.

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Transforming Post-Communist Political Economies (1998)

Chapter: 7 formal employment and survival strategies after communism, 7 formal employment and survival strategies after communism.

Simon Johnson, Daniel Kaufmann, and Oleg Ustenko

INTRODUCTION

The countries of Eastern Europe and the former Soviet Union have suffered large declines in output and, in most cases, employment since the collapse of their communist regimes. Most research on labor markets in these economies has focused on changes in formal employment status. Numerous studies, using techniques developed for Western market economies, have examined the flows into and out of formal jobs, particularly in Eastern Europe (see, for example, all the papers in Commander and Coricelli, 1995; Coricelli and Revenga, 1992).

The assumptions underlying this work are clearly presented in the leading labor market model for post-communist countries (see Aghion and Blanchard, 1994; Blanchard et al., 1995). According to this model, the beginning of economic reform means a jump downward in state-sector employment, followed by a steady decline. There is a net creation of jobs in the private sector, but not enough to absorb all the people who leave the state sector. The result is steadily increasing unemployment. People who remain employed or who find new jobs do relatively well, while those who are unemployed, particularly for a long time, do badly. In this conventional model, state enterprises either keep people employed or fire them. Individuals respond to being fired by either finding a new job or not. Some individuals may also quit and move directly to the private sector. The model is therefore a sequence of discrete, zero-one choices by both firms and individuals.

This work was partly supported by the World Bank. The views are the authors' and do not necessarily reflect those of the institution.

For post-communist economies, this model is not appealing for three reasons. First, there is a great deal of anecdotal and survey evidence indicating that firms can vary greatly the intensity with which they use labor. Standing (1994) documents what he calls "hidden unemployment" in several forms. Hours worked can be reduced through closing the factory for some period, through sending people on forced vacation (paid or unpaid), and through offering extended maternity leave. A person can also be paid a lower wage, either relative to others or in absolute terms, with it being understood on both sides that this implies a lower level of time commitment to the firm. Second, individuals can also respond to changes in their formal employment by engaging in various "survival strategies," or alternative ways of earning income, primarily through informal self-employment. In principle, an individual can vary his or her intensity of work in these survival activities over an almost continuous scale. Third, it seems inappropriate to assume that firms make one formal employment decision per person, and each individual then decides how to respond. Rather, the interaction between most individuals and their original employer is repeated, with both sides taking into account both the previous and expected future actions of the other. For example, if the managers of a firm see an individual heavily engaged in survival strategies, they may consider cutting back on that individual's work in the firm, although not necessarily firing him or her. The individual may respond by putting more effort into other income-earning opportunities, but not necessarily quitting.

Our empirical work is guided by a theoretical framework that modifies the standard model to take these three considerations into account. We model the individual's decision as a stochastic dynamic supermodular optimization problem. This problem has two critical assumptions. First, we require that managers choose the intensity with which each individual works in the firm, while the individual chooses the intensity with which he or she works outside the firm. As the manager reduces the intensity of firm work, there is a higher payoff to the individual from increasing the intensity of outside work. The converse may also be true: if the individual works more outside the firm, the manager derives a higher payoff from reducing the intensity of work for this person. The second critical assumption is that larger adjustments are more costly than smaller ones for both firms and individuals. This slows down the optimal speed of adjustment on both sides and means that optimal intensities of work adjust over time (although the optimal speed can vary considerably across individuals).

These two assumptions describe a supermodular optimization problem. Static versions of supermodular problems can be analyzed using the tools provided by Milgrom and Roberts (1990), but this approach does not capture important aspects of transitional economies. Instead, we use the results established by Friedman and Johnson (1996), which show that in the presence of complementarities and convex-type adjustment costs, the dynamic adjustment

path for the individual increases in parameters that change the overall economic environment. The appeal of this approach, as shown by Friedman and Johnson (1997), is that it allows us to generate robust testable hypotheses. 1

These results provide a framework that is consistent with a variety of specific models about interactions between firms and individuals, and that encompasses important elements of established theory about Eastern European labor markets as a special case. This is an attractive feature because while there is no agreement on precisely how firms restructure and how individuals behave in the post-communist economies, aspects of most existing models can be formulated in terms of our supermodular framework.

Our evidence is drawn from a survey of 1828 current and former state enterprise workers, conducted during the summer of 1994 in Ukraine. The sample comprises people who were separated, people identified by management as working less than normal hours or earning unusually low wages, and people who were randomly selected from among the employed. The workers were previously or still employed at 26 organizations, drawn from a cross-section of sectors and based primarily in the heavy industrial region of eastern Ukraine, but including some research institutes and schools in addition to firms. With this evidence, we can assess the standard model of labor market adjustment.

We find evidence of much more general complementarities than are predicted by the conventional theory. Using both direct measures and estimates of earnings, we find evidence (from cross-tabulations) that people who worked less inside the firm worked more outside the firm, and vice versa. However, in simultaneous regression estimation, much stronger results are found for demographic variables. In effect, we find that while most people can offset poor formal employment outcomes through use of survival strategies, women and pensioners are less able to do so. These groups appear significantly less able to cope by earning income in the private sector. Another impressive result is the extent to which people across the board earn at least a survival level of income through informal or secondary activities. In our sample, 70 percent of the randomly selected employed people were engaged in a survival strategy of some kind. Remarkably, we find that people who remained employed were more likely to engage in survival strategies than were those who were unemployed; the proportions are 69 percent for the employed and 65 percent for all the unemployed (56 percent of the unemployed receiving assistance and 79 percent of the unemployed not receiving assistance). 2 Using the lowest plau-

sible estimates of income from survival strategies, employed people earned an average of $15.9 per month in their primary formal employment and $29.3 per month through other activities. At that time, the cost of a minimum survival basket of food per adult was at least $20 per person. 3 Many people therefore appear to have responded to worse outcomes in their formal employment with various forms of survival strategies.

These results extend three literatures. The first is recent work by Western labor economists on a range of post-communist countries (Commander and Coricelli, 1995). Using an approach developed in the study of Western labor markets, this literature has focused on formal employment and the measurement of ''true" unemployment. A major puzzle for this theory is that even though the employment decline has been of a similar order of magnitude, unemployment rates in the former Soviet Union are much lower than those typical in other areas of Eastern Europe. Registered unemployment in Eastern Europe is over 10 percent everywhere except in the Czech Republic, and up to 20 percent in some countries. In the countries of the former Soviet Union, it is generally less than 5 percent, and in Ukraine during 1994 it remained below 1 percent. Layard (1994) argues that Russia has had more labor market flexibility, including lower real wages, but he does not model secondary employment strategies.

While supporting the finding that there are problems for some of the unemployed in post-communist labor markets, our results are perhaps closer to the literature on the second economy during and particularly at the end of the Soviet period (see, for example, Alexeev and Treml, 1993). According to this work, the second economy was always strong, and economic reform brought to the surface activities that previously existed but had been hidden (Leitzel, 1995). Consistent with this argument, we show how people continue to use second-economy activities to survive after the collapse of communism.

Third, we also show how to estimate empirically a general model of strategic complements in labor market adjustment. The theoretical work of Milgrom and Roberts (1990, 1994) has not yet been used extensively in econometric work. Our results indicate that with the modifications provided by Friedman and Johnson (1996), this approach offers an extremely attractive general framework for testing rival hypotheses.

The next section summarizes the Ukrainian economic situation through the summer of 1994. We then develop our model of strategic complements between firm and individual decisions concerning formal employment and survival strategies. The following two sections, respectively, present tests based on directly measuring the intensity of work and use income as a proxy for intensity. Next we examine what determines whether a person is coping or not. The final section presents conclusions and policy implications. Annex 7-1 contains a detailed assessment of gross separations in our sample.

THE UKRAINIAN ECONOMIC SITUATION 4

By the summer of 1994, Ukraine was in a deep crisis. With the breakup of the Soviet Union, the country suffered a major deterioration in its terms of trade, particularly with Russia and Turkmenistan, which provide most of Ukraine's energy imports. Its share of gas and oil imports by value increased from 12 to over 50 percent of imports from the former Soviet Union between 1991 and 1993. This increase in the imported energy bill was met by compressing nonenergy imports—by about 35 percent a year in 1993 and 1994—and by increasingly running energy arrears to Russia and Turkmenistan. As the result of an overvaluation of the relevant exchange rate, exports fell by over 15 percent a year in both 1993 and 1994. From 1990 to 1994, official gross domestic product (GDP) fell by over 50 percent, and measured in dollar terms at the market exchange rate reached around $33 billion ($600 per capita). In purchasing-power terms, Ukrainian GDP was approximately $3500 (in 1994 dollars).

Inappropriate economic policies contributed significantly to this decline in economic activity. Throughout the postindependence period, the state maintained, and at times further tightened, administrative controls over economic activity, particularly the exchange rate, domestic and external trade, and prices. In addition, there were frequent changes in regulations. This regulatory environment hindered restructuring and the development of the private sector and induced many activities to become unofficial or go underground, thus eroding the tax base (Kaufmann, 1994).

Loose fiscal and monetary policies were largely responsible for the very high inflation Ukraine experienced after 1991 (Åslund et al., 1994). Monetary financing of the budget deficit was between 10 and 25 percent of GDP, while the average inflation rate climbed from 90 percent in 1991 to 1,210 percent in 1992 and to 5,000 percent in 1993. By the fall of 1993, inflation rates were approaching hyperinflation, with prices rising about 65 percent a month. Following a tightening of credit policies and a reinstatement of administrative controls (such as on energy and other prices), the rate of inflation fell in 1994, although it was still estimated to be about 800 percent for the year. The sharp decline in production and rapid increase in prices significantly eroded the standard of living of the population. There was a marked deterioration in schools, hospitals, and health care more generally. By the summer of 1994, almost all state enterprises had encountered serious financial problems and faced the need to cut employment or wages or both.

Realizing the extent of the crisis, the new president, Leonid Kuchma, who was elected in mid-1994, called for a break from previous economic policies.

A comprehensive program of macroeconomic stabilization and structural reforms was developed, and initial measures to stabilize, liberalize, and privatize the economy were initiated in late 1994. The results presented below have not been influenced by these new policy developments; instead our evidence reveals formal employment and survival strategies in the crisis months of the summer of 1994.

The two critical assumptions presented in the introduction concern the complementarities between the actions of firms and individuals and the nature of adjustment costs. Two actions are complementary if taking one does not preclude taking the other, and taking both together gives at least as much benefit as taking the two separately. 5 In the case of differentiable functions, complementary is identical to positive cross-partial derivatives. Intuitively, this means doing more of one activity increases the benefit from doing more of another activity. 6

Here we model the potential complementarity between the intensity with which managers employ individual workers inside the firm and the intensity with which workers engage in income-earning activities outside the firm. The firm's employment strategy, f t i , is controlled by management and represents the intensity with which the firm employs this worker. If f t i is higher, individual i is working less intensely inside the firm; that is, the degree of "underutilization" of this person has increased. 7 A higher value of f t i means fewer hours worked, less salary paid, and in general less intense work for a particular person. Nothing in our model requires that f t i or any other variables be continuous or differentiable. In fact, we would expect many of these variables—such as whether the worker is given a "forced" vacation—to be discrete in nature.

The individual chooses i t , the intensity with which he or she works outside the firm. There is also an adjustment cost, which depends on the magnitude of the change in his or her action, i t , between periods. This variable is

intended to capture the idea that it takes time for individuals to develop outside opportunities, so more rapid adjustment is more costly. Given these versions of our two critical assumptions for each individual's payoff function (b) and adjustment cost function (I), the overall objective function is also supermodular. (For formal proofs of these points, see Friedman and Johnson, 1996.)

The individual's objective function can be written as the present discounted value of payoffs minus adjustment costs:

where f t i is the firm's action and i t is the individual's action, and w is a vector of parameters describing the individual from the individual's point of view (and taken as given by all decision makers). The single period payoff function is given by

while adjustment costs are I(i t , i t+ 1 ). We will test whether a lower intensity of work inside the firm is complementary to a higher intensity of work outside the firm, that is, whether working less inside the firm raises the payoff to working more outside the firm.

In this framework, a higher intensity of reform policy leads to a greater reduction in the intensity of work inside the firm and an increase in the intensity of work outside the firm (but not necessarily for all individuals). We can now formulate the two hypotheses to be tested. The first is as follows:

Hypothesis 1. Controlling for individual characteristics, the intensities of inside and outside work are negatively correlated (i.e., a lower intensity of inside work implies a higher intensity of outside work, all other variables being held constant).

If this hypothesis is correct, the intensity of work inside the firm should be negatively correlated with the intensity of work outside the firm. For example, the individuals who work more intensely outside the firm (using what we call "survival strategies") should be those who work less inside the firm. Some of them may leave the firm altogether, as implied by the conventional theory, but our model also allows other forms of reduction of work intensity short of complete separation.

Note that nothing in our model requires that every person work at a reduced intensity inside the firm during or after the completion of reform. In fact, our empirical work in Russia and Ukraine indicates that some people continue to work at a high intensity while others are gradually pushed out of the firm.

We also assume that firms perceive differences among individual workers. Worker attributes are represented in the vector w, where a higher value means that the firm has a higher incentive to reduce that individual's intensity of inside work. This may be because that worker is currently paid more than his or her marginal product, or because the worker is a troublemaker, or

because the manager feels he does not need to employ this kind of worker because she has excellent outside opportunities. Again, an important advantage of our framework is that all these specific explanations are consistent with our formal model.

Hypothesis 2. Individuals' characteristics significantly affect the intensity of inside and outside work, even when we control for potential simultaneity.

Our empirical work therefore includes regression analysis with the intensity of inside and outside work on the left-hand side in a pair of simultaneous equations. Variables on the right-hand side will include demographic and firm-specific information.

We follow this analysis with a third testable hypothesis implied by, but not formally derived from, our theory:

Hypothesis 3. People who do not earn a minimum survival level of income (i.e., who do not cope on their own) are those who work significantly less both inside and outside the firm.

THE INTENSITY OF WORK

Testing our first two hypotheses requires an analysis of the intensity of work both inside and outside the firm. This section provides direct measures of intensity, while the next uses income earned as an indicator of intensity. The following section deals with the third hypothesis, about people who can and cannot cope.

Our sample contained 26 enterprises, of which 19 were from Dnepropetrovsk, 3 from Kiev, and 4 from Simferopol (in Crimea). Our goal was to cover a wide cross-section of the economy, and to this end we included 2 schools, 4 industrial institutes (which provide design and research support for manufacturing and construction), 5 machine-building enterprises, 2 equipment-building enterprises, 3 food-processing enterprises, 3 chemical enterprises, 4 enterprises producing construction materials, and 4 enterprises producing consumer goods. We wished to contact 75 people from each organization, 50 of whom were still employed and 25 of whom had separated.

In each organization, we obtained a list of workers from the personnel office. Because we were particularly interested in the behavior of low-income people, 25 of those still employed were to be people identified by the person-

nel office as being "unsuccessful," which our interviewers defined as meaning working fewer than normal hours, having taken a forced vacation, or receiving unusually low wages. Our intention was to have management identify some of the people who could be considered in some sense to be "hidden unemployed." The other 25 employed people were randomly selected from among the entire staff of the organization, with the interviewer being told to visit as many departments as possible. Note that our sample probably underrepresents upper-level managers.

We also wanted to examine differences between people who remained employed and those who had separated. We therefore obtained from management a list of people who had separated. We interviewed people on this list by telephone until we had responses from 25 people or until the list was exhausted. 8

Our final sample comprises 1828 people, 30 percent of whom were randomly selected, 37 percent of whom were employed and on the list provided by management, 14 percent of whom were separated and employed, and 19 percent of whom were separated and unemployed. Our sample therefore represents the three groups we wanted to investigate in roughly equal proportions. Compared with the total population of people employed in these firms in 1991, of course, it overrepresents both those employed with fewer than normal hours and those who were separated. 9 Sampling in this way enabled us to draw interesting comparisons across employment categories, but it means one must be careful about using the sample to infer overall proportions in the total population.

For the most part, the same questions were asked of the separated and nonseparated. However, the separated were also asked some additional questions about what happened to them after separation (e.g., whether they received unemployment assistance).

Use of Survival Strategies

Our survey asked whether a person was engaged in any of six types of survival strategy: "another job" (this was asked only of people we knew had at least one formal-sector job, i.e., who had not separated or who had separated and were reemployed), use of a dacha or other plot of land to grow food, work to some extent as a private taxi driver, renting out of one's apartment, business trips abroad, and renting out of a garage. With the exception of the rentals, all

the questions asked here related to informal employment (although answers about "another job" could refer to another formal job). 10

For the dacha question there were four possible answers: "I don't have a dacha," and "I grow food for myself a little," ". . . for myself a lot," or ". . . to sell.'' We considered only the second and third of these answers to represent the "dacha survival strategy." Almost everyone we know in Ukraine who has a dacha grows some food for his or her family and always has. We therefore regard the response ". . . for myself, a little" as being a culturally determined income-supplementing activity that will probably always exist in Ukraine and should not be confused with survival strategies due to the difficult economic situation.

We also asked whether a person worked in any way "as a taxi driver." There is an established tradition in Ukraine of giving people rides for short distances (effectively hitchhiking in the city). Prices for this service are high compared with official state-sector wages—about $1 equivalent for a 10-minute ride in Kiev at a time when state-sector wages are $20 per month. There were three possible answers: no, part-time, and full-time. Anyone who gave either of the latter two answers was classified as using the taxi survival strategy.

We asked people further whether they rented out their apartment or shared in the income of another family member who rented his/her apartment (and as a result lived with the respondent). We were also interested in what foreign business trips people had taken in the last year. Specifically, we asked whether people had traveled to Russia, Poland, Turkey, China, or Western Europe. 11 Answers were classified as one to three, four to seven, or more than seven trips to each destination. Finally, we asked people whether they rented out their garages. Of the fully employed, 5 percent did so.

Table 7-1 shows a remarkably high use of survival strategies across the board. Of all the employed (nonseparated) people in our sample, 70 percent made some use of at least one strategy. People working fewer than 30 hours per week made as much use of the strategies as did the unemployed who did not receive assistance (which indicates some support for Hypothesis 1). However, even people working at least 40 hours a week were only slightly less likely to have a survival strategy.

Of the 493 people in our sample who had a car (34 percent of the total), 34 percent worked as private taxi drivers (4 percent said they worked full-time in this occupation). This survival strategy shows the biggest difference between the sexes, being cited by 19 percent of men, but only 2 percent of women.

TABLE 7-1 Proportion of People Engaged in Various Survival Strategies (all numbers are percentages)

This is obviously related to the fact that 78 percent of women, in comparison with 56 percent of men, said they did not have a car.

Of the 1828 respondents, a striking 503 (28 percent) had taken a trip of some kind. Most of these people (15 percent of the sample) had gone to Russia three or fewer times, while 5 percent had gone there more than three times; 81 (4 percent) had gone to Poland, 35 to Turkey, and 12 to China. The pattern is interesting. Older people, women, and the unemployed who were not receiving assistance were more likely to go to Russia and less likely to travel to non-Russian destinations.

At this informal level of analysis, we find some support for our first hypothesis. Cross-tabulations show survival strategies are used somewhat more by people who work less in formal jobs. We now test more formally for the effect of work intensity on the use of survival strategies.

Regression Results

Table 7-2 shows regression results for the simultaneous equation system in which the inside and outside intensity of work are the left-hand-side variables. The inside intensity is measured as the number of hours per week the respondent reported working in the firm, while the outside intensity is an index measuring the extent to which an individual engaged in survival strategies. In this index, each basic use of a strategy is given 1 point, while each use above the minimum is given an additional point. The index is capped at 5 points. 12

All regressions were estimated by three-stage least squares, using instrumental variables and taking into account the simultaneity. The instruments were

TABLE 7-2 Regression Results for Work Intensity

measures of individual attributes and firm-level performance that were already on the right-hand side of the regressions. 13 In the regression for the whole sample, outside intensity is significant when put on the right-hand side. This result is obviously influenced by the presence of both the unemployed (with zero inside intensity and varying outside intensity) and the separated and reemployed (with zero inside intensity and outside intensity assumed at the maximum level.) We therefore ran the regression only for people who had not separated.

Both inside and outside intensity are now not significant, but this is not necessarily cause for rejecting our first hypothesis. Given the evidence from the cross-tabulations in Table 7-1 , the most reasonable interpretation is that use of outside survival strategies is uniformly high and not affected by the inside intensity of work. This is further evidence of a severe crisis for state-sector employees.

Relevant for the second hypothesis, we find both the female dummy and the dummy for a person being of pensionable age to be significantly negative, indicating that these people work less both inside and outside the firm. Years of tenure (i.e., years of employment in that firm) are positive and significant in both regressions. The dummies for education are not significant, and the only significant age dummy is for those aged 26-35 (negative in the inside intensity regression). Thus it seems that women and pensioners work relatively less inside and do not make this up with more work outside the firm. 14

Given the difficulty of measuring the intensity of work directly, we also analyzed intensity using estimates of people's incomes from work inside and outside the firm. Measurement of inside activity is easier in this case—all but one respondent provided us with their official wages. Our assessment is that respondents in the state sector probably report their earnings accurately (salaries in the state sector are pretty much on the public record), but those working in the private sector are likely to understate their earnings somewhat. Incomes from formal jobs were reported in our survey. 15

A cross-tabulation of the use of survival strategy against wage distribution rather than hours of work shows that of the highest 20 percent of the wage distribution, no less than 62 percent used at least one strategy. Of the lowest 20 percent, this figure is 76 percent, similar to the 79 percent for the unemployed without assistance. For people with higher wages, there was somewhat less use of all strategies, with the exception of foreign trips, although the first and second quintiles are very similar in their use of strategies. The dacha strategy seems particularly important for the unemployed without assistance, while a relatively high proportion of the nonseparated worked as taxi drivers. 16 Further, the lowest two quintiles of the wage distribution were significantly more likely to have engaged in survival strategies—76 percent of them had done so, versus 62 percent in the top quintile. The lowest two quintiles were more likely to have engaged in strategies than were unemployed people with assistance, but less likely than the unemployed without assistance. 17 This result supports Hypothesis 1.

To estimate survival strategy earnings, we conducted separate surveys of earnings from various survival strategies in the fall of 1994 (with informal focus groups of Kiev State Economic University students) and a more formal

TABLE 7-3 Average Total Earnings and Formal Wages (in parentheses), Employed and Unemployed

survey in early 1995. We have also conducted an independent assessment of dacha earnings as part of a separate research project on agricultural developments. As far as we can ascertain, the return from these strategies has not changed appreciably since the summer of 1994.

We use very conservative (i.e., low) estimates of what people can earn through their survival strategies. In effect, we are assuming that everyone uses a strategy at the lowest plausible level of intensity. Our estimates therefore present a lower bound of the extent to which people can compensate for low formal employment incomes through survival strategies. All the numbers given here are per month unless otherwise indicated. 18 We further estimate that work as a private taxi driver paid $8 per month if part-time and $80 per month if full-time. Renting out an apartment paid $35 per month and renting out a garage $10. The most difficult income to estimate is that from "another job," because affirmative answers to this question may cover all kinds of positions. We base our estimates on earnings in official jobs, but assume that the work is only part-time, so the average earnings are less than in primary employment. This implies a low estimate of $10 per month.

Table 7-4 shows that people with lower official earnings had larger relative incomes from secondary sources. People with lower earnings in their

TABLE 7-4 Percentage of Secondary Incomes in Total Income

formal job tended to work more (as measured by our survival strategy index) and earn more through outside work. Again the cross-tabulations support Hypothesis 1.

Also striking is the absolute magnitude of the compensation. In Table 7-3 we see that average total incomes were twice as high as official formal-sector wages for almost all groups, and three times as high for some groups. On average, people could more than compensate for low official incomes. Equally remarkable is the finding about the total earnings of unemployed people (last two columns of Table 7-3 ). Not surprisingly, unemployed people receiving assistance had low incomes, although even without considering benefits they averaged more than the randomly selected employed group earned officially. More striking, however, is the high average incomes of people who were separated and were not receiving assistance; this average is actually higher than for people who were separated and employed.

Average incomes can, however, be misleading, particularly for the unemployed. Table 7-5 shows the distribution of total earnings by employment status. The lowest part of the income distribution is significantly lower for unemployed people without assistance than it is for the randomly selected nonseparated people, but the medians are much closer together. This is because people could earn large amounts from survival strategies relative to official earnings, but for some reason, 30-40 percent of the unemployed did not engage in these strategies. Thus there was a very large dispersion of incomes among those unemployed without assistance.

Although on average survival strategies allowed people to compensate for low formal earnings, this was not true for everyone. The lowest quintile of wage earners earned less than $9.3 per month in formal employment. The lowest quintile of the income distribution (including all survival strategies) earned less than $14.3 per month, and the lowest one-third earned less than

TABLE 7-5 Distribution of Total Earnings by Employment Status (indollars at market exchange rate)

$17.2 per month. Of the lowest quintile of wage earners, 45 percent are in the lowest quintile, and 50 percent are in the lowest one-third of the income distribution.

In conclusion, differences in average total income are much smaller than those for average formal wages (supporting Hypothesis 1). Average earnings from survival strategies are the highest for the unemployed without assistance, while the lowest such earnings are for the reemployed—the group with the highest average official wages. Given that we use the lowest possible estimates of survival strategy earnings, we are showing the smallest plausible equalization effect. The effect is large primarily because official earnings were so low. In this situation, it does not take much in the way of survival strategy earnings to have a large compensating effect.

However, not everyone could compensate effectively. The income distribution within each formal employment group actually widens when informal incomes are included. To see which people were more or less able to compensate for low earnings in their regular jobs through informal activities, we need to use multivariate regression analysis.

Regression Analysis

Table 7-6 shows the results from simultaneous equation estimation. The specifications and estimation procedures are the same as reported in Table 7-2 , but now the left-hand-side variables are our estimates of inside and outside earnings. The first two columns are only for the nonseparated workers, while

TABLE 7-6 Regression Results for Inside and Outside Earnings

the last two also include the unemployed. In none of the specifications do we find these measures of inside and outside earnings to have significant negative signs. Again, however, this is not necessarily cause for rejecting Hypothesis I because the cross-tabulation evidence clearly indicates that most people obtained a relatively high level of outside earnings.

Relevant for Hypothesis 2, the dummies for women and for pensioners have a significant negative sign in the inside earnings regression, but are not significant in the outside earnings equation. The education dummies are significant in the inside regression, but also not significant in the outside equation. By this measure, it seems that no one was unable to compensate for poor low inside earnings.

Women earned an average of $28.9 from survival strategies, while men earned $29. Pensioners were somewhat behind, with an average of only $22.5, but their formal-sector earnings were a couple of dollars higher than those of nonpensioners.

COPING AND NOT COPING

We consider a person to have been coping if his or her monthly income, including all survival strategies, was higher than $25 per month. This is a crude but probably robust measure. A person is considered not to have been coping if his or her total monthly income was less than $15. In our sample, 56 percent of men and 44 percent of women met this definition of coping, while 20 percent of men and 26 percent of women did not. 19

Table 7-7 shows the results for probit regressions. In the first column, the dependent variable was equal to 1 if total income exceeded the $25 coping

TABLE 7-7 Probit Regressions for Coping and Not Coping

level, and in the second column it was equal to 1 if total income was less than the $15 minimum coping threshold.

The coping regression shows women were less likely to be coping in these ways, while those with specialized secondary or higher education were more likely to be coping. In confirmation of Hypothesis 3, we find that both inside and outside work intensity are significantly positive. The second column of Table 7-7 is the noncoping regression, and it again shows the female dummy to be significant, even when we control for the inside and outside intensity of work. Although not shown here, the dummy for pensionable age is not significant in any specification for either regression.

The likely explanation is that women had less access to some remunerative strategies. In particular, women did not work as taxi drivers because they did not own cars and did not generally work as drivers in the formal sector. Women probably took fewer trips (except to Russia) because of the risks involved. They also did less "parallel work" for some reason, possibly be-

cause of discrimination. It could also be that the nature of work in the nonstate sector does not favor women, but we are skeptical of this explanation because women previously did all kinds of work in the Soviet Union.

At the same time, our results raise a question about an important hypothesis of the established literature. Unemployment as a dummy is significant, but not when we control for the outside intensity of work. Undoubtedly, this is because of multicollinearity because the outside intensity is necessarily zero for unemployed people. However, it also suggests that access to survival strategies is at least as important as formal employment status in determining whether people are able to cope on their own.

CONCLUSIONS AND POLICY IMPLICATIONS

How well does the established theory, based on Eastern European experience, explain labor market adjustment in Ukraine? It completely ignores informal activities, while the evidence indicates this is an important part of both how people survive and how they behave in the formal labor market. People can stay in the state sector and supplement their incomes with informal activities. Increases in outside "survival" work appear to be complementary to reductions in inside "formal" work. We find that the use of survival strategies is an important determinant of whether people can or cannot cope on their own.

At least in Ukraine, there has been a considerable flow of people between formal jobs, but unemployment remains low. The established theory of post-communist labor markets needs to be modified to include self-employment and the ability of people to generate their own incomes (albeit at a low level).

The Ukrainian nonstate sector, mostly individuals operating by themselves and in an informal way, expanded massively during 1992-1994. This growth occurred in large part because the collapse of the state sector and increasing administrative controls over the official economy meant people had to find ways of supplementing their official incomes. At the same time there has been de facto liberalization of entry into informal activities.

A substantial amount of income-earning assets is already controlled by private individuals. Real estate, vehicles, and some agricultural land are already in private hands to a significant degree (even if not formally privatized). State assets such as trucks, trains, and industrial premises can be accessed easily through informal markets.

It is fortunate that the state lost its ability to prevent people from using a wide range of assets as they see fit, because this enabled them to earn higher incomes. However, without proper privatization there is insufficient investment in these assets. Ukrainian people survived on their individual and collective inherited capital stock, and unless full private ownership is established, this capital will likely not be replaced as it depreciates.

It is important to stress, however, that until mid-1994, the Ukrainian private sector merely offered a way to survive. There was not enough stability for serious private-sector investment to take place. People working in this sector were earning just enough to survive. The private sector can be a powerful force for the positive transformation of work after communism. The clearest example of this effect is in Poland, where almost every aspect of the economy has been fundamentally transformed as a result of the emergence and growth of new business over the past five years (Johnson and Loveman, 1995). But this form of private-sector development requires an environment in which private business can establish itself in activities that require relatively sophisticated organizations. This happens only when private entrepreneurs are willing and able to make significant investments in fixed capital assets. Preliminary evidence suggests that the stabilization and proper liberalization pursued since the fall of 1994 have begun to have these effects.

UNEMPLOYMENT

Our theory and evidence suggest a reinterpretation of what has happened to unemployment in Ukraine. Officially registered unemployment in the summer of 1994 was below 0.5 percent. This figure is remarkably low and much lower than the rate in most post-communist countries of Eastern Europe, where it ranged between 10 and 20 percent. It is commonly supposed that the official numbers are understatements, but even surveys indicate that open unemployment—people who do not have a job and would like one—in Ukraine is only between 3 and 6 percent.

The established explanations for the relatively low level of unemployment in Ukraine are that very few people are fired from state enterprises, and that there are many genuine unemployed who do not register because benefits are so low (see Coricelli and Revenga, 1995). We examine these hypotheses in turn.

Firing and Hiring

At the beginning of 1991, the organizations in our sample had total employment of 13,498, and this figure remained approximately constant in 1991 and 1992; there was actually a 1 percent increase, most of which occurred in 1992. Of 26 organizations, 16 had an increase in employment during this period, and there were increases in all sectors, although a higher proportion of firms increased employment in the machine- and equipment-building sectors.

However, total employment fell 5 percent in 1993, and a further 5 percent from the start of 1994 to the time of our interviews in mid-1994. At the time

of the interviews, our sample therefore shows a total net decline in employment of 9 percent from January 1991 and a total net decline of 10 percent from January 1993. From January 1991 to the time of the interviews, the employment of women fell by 10 percent and that of men by 5 percent. Total employment in the sampled organizations at the time of our interviews was 11,664.

This net decline in employment masks the fact that there was a substantial amount of hiring in these same enterprises during 1992-1994. Strikingly, 24 out of 25 enterprises for which we have this information hired some people, and while only 3 enterprises had gross hiring above 10 percent of their January 1992 employment levels, 17 hired more than 5 percent of this total. 21

In sum, the evidence indicates that people have been fired from all the state organizations we surveyed. It is true that firings were minimal until January 1993. As part of a labor force reduction, only 0.5 percent of men were fired during 1991 and 0.3 percent in 1992, although 1 percent of women were fired in both years. However, in both years, "other" firings were between 1 and 2 percent; this figure probably represents managers getting rid of workers they did not want. After January 1993 there was a sharp increase in firing: 3 percent during 1993 and 5 percent from the beginning of 1994 as labor force reduction, and 4-5 percent as "other." Even though Ukraine has lagged in terms of overall economic reform, there has been a substantial labor force reduction in many state enterprises. Many people have either been fired or been forced to quit. Why, then, has unemployment remained so low?

The Unemployed

There were 351 people who identified themselves as unemployed among our respondents. Of this total, 19 percent were not receiving any benefits and were not registered as being unemployed, and 38 percent had been unemployed for less than 3 months. For up to 3 months from separation, people who have been fired as part of a labor force reduction get their benefits from the enterprise rather than the government. According to Ukrainian practice, people are not counted as unemployed until they register with the government's offices. The effect of this procedure is to exclude almost all short-term unemployed from the registered total. 22

The reemployment rate for quits is high. Annex Table 7A-1 shows that almost all quits among those surveyed were reemployed after 1 month and that the reemployment rate for people who had been fired rose steadily. Almost no one who had quit had registered as being unemployed or was receiving benefits. 23

Therefore, in our survey, the registered unemployed (reported in national statistics) were only those fired people who had been unemployed for at least 3 months. This is just 34 percent of all the unemployed people in our sample, and converts to an unemployment rate among the population of 4 percent. If we assume that only people unemployed at least 4 months were registered unemployed, the implied unemployment rate falls to 2 percent. 24

The reemployment rate among our sample was very high for anyone who would have been eligible for benefits. The average reemployment rate for fired people seems rather low at 28 percent, but it rises to 47 percent for people unemployed 4 or more months and keeps on rising (Annex Table 7A- 1 ). It appears that people were not particularly attracted by the level of unemployment benefits. At least in our sample, there was almost no long-term unemployment.

Although our results imply a registered unemployment rate of 2-4 percent, the "true" unemployment rate—people without a job who are looking for work—in our sample is 11 percent (including both quits and people who had been fired). 25 If we assume that pensioners who had separated in the last 3 years would also have liked to work but could not, the unemployment rate increases to 14 percent.

TABLE 7A-1 Rate of Reemployment

In short, our work suggests that the actual unemployment rate in Ukraine is close to that in Eastern Europe. However, the peculiarities of the benefit system, with the enterprise paying for the first 3 months, mean that most of the short-term unemployed are not registered. Although this implies an overall unemployment rate similar to that in Eastern Europe, Ukraine has much less long-term unemployment. Most likely this is because the benefits are so low—typically around 20 percent of the minimum survival wage—while it is relatively easy to find a new job of some kind and to supplement that income with a survival strategy.

In contrast to the established view, separated people in our sample could readily find new formal jobs, and labor force participation had not declined as of the summer of 1994. Almost everyone was reemployed within 6 months. Even more important, people could generate new informal income-earning opportunities for themselves. This meant people were more likely to quit voluntarily and create job openings, even in companies that were contracting. As a result, in the summer of 1994, very few people in Ukraine were not working.

Aghion, P., and O. Blanchard 1994 On the speed of transition in Eastern Europe. Macroeconomics Annual . National Bureau of Economic Research.

Alexeev, M., and V. Treml 1993 The Second Economy and the Destabilizing Effect of its Growth on the State Economy in the Soviet Union: 1965-1989. Berkeley-Duke Occasional Papers on the Second Economy in the USSR, No. 36, December.

Åslund, A., P. Boone, and S. Johnson 1994 Ukraine: Ready for a breakthrough. Ostekonomisk Rapport 24:6(8).

Blanchard, O., S. Commander, and F. Coricelli 1995 Unemployment and restructuring in Eastern Europe and Russia. In Unemployment, Restructuring, and the Labor Market in Eastern Europe and Russia , S. Commander and F. Coricelli, eds. Washington, DC: The World Bank.

Commander, S., and F. Coricelli, eds. 1995 Unemployment, Restructuring, and the Labor Market in Eastern Europe and Russia . Washington, DC: The World Bank.

Coricelli, F., and A. Revenga 1992 Wages and Unemployment in Poland: Recent Developments and Policy Issues. Policy Research Working Paper Series, WPS821, January, The World Bank.

1995 A puzzling job. The Economist February 18th.

Friedman, E., and S. Johnson 1996 Complementarities and Optimal Reform. Unpublished paper, November, Duke University.

1997 Dynamic monotonicity and comparative statics for real options. Journal of Economic Theory 75(1):104-121.

Johnson, S., and G. Loveman 1995 Starting Over in Eastern Europe: Entrepreneurship and Economic Renewal . Boston: Harvard Business School Press.

Johnson, S., and O. Ustenko 1995 The Road to Hyperinflation: Ukraine 1991-93. In Economic Strategy in Newly Independent Post-Communist Countries , M. Wyzan, ed. New York: Praeger.

Kaufmann, D. 1994 Diminishing returns to administrative controls and the emergence of the unofficial economy: A framework of analysis and application to Ukraine. Economic Policy 19 (December).

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Leitzel, J. 1995 Russian Economic Reform . London: Routledge.

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1994 Comparing equilibria. The American Economic Review 84(3):441-459.

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Zienchuk, M. 1994-1995 Ukraine in Numbers. Monthly Statistical Bulletin of the Ukrainian Ministry of Economics.

This ground-breaking new volume focuses on the interaction between political, social, and economic change in Central and Eastern Europe and the New Independent States. It includes a wide selection of analytic papers, thought-provoking essays by leading scholars in diverse fields, and an agenda for future research. It integrates work on the micro and macro levels of the economy and provides a broad overview of the transition process.

This volume broadens the current intellectual and policy debate concerning the historic transition now taking place from a narrow concern with purely economic factors to the dynamics of political and social change. It questions the assumption that the post-communist economies are all following the same path and that they will inevitably develop into replicas of economies in the advanced industrial West. It challenges accepted thinking and promotes the utilization of new methods and perspectives.

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World History Project - 1750 to the Present

Course: world history project - 1750 to the present   >   unit 7.

• READ: The Global Story of the 1930s
• READ: Fascism in Germany
• READ: Fascism in Italy

READ: Communism in the Soviet Union

• READ: Authoritarianism in Japan
• READ: Fascist Histories, Part II - Exercising Authoritarianism
• READ: Appeasement
• The Road to War

First read: preview and skimming for gist

Second read: key ideas and understanding content.

• What big challenges did Lenin and the Bolshevik (communist) leadership face in the first stages of their revolution?
• How does the author characterize the Bolshevik party during the early part of their rule?
• How did Stalin’s rise to power change the way the Bolsheviks ruled?
• What were some consequences for everyday life under the Soviet command economy?
• How were fascism and communism under Stalin similar and different?

Third read: evaluating and corroborating

• Communism under Stalin was certainly different from fascism. But Italian Fascism, as you now know, was different from German fascism. Why do we call Mussolini and Hitler’s approaches fascism, but use the term communism for Stalin’s regime?
• Think about the last time you heard someone called a “communist” or a “fascist”. Do you think the term was used correctly?
• In this unit we see the rise of governments that have certain political characteristics. We call these characteristics fascism, authoritarianism, and totalitarianism. Using these definitions, evaluate which of these terms can appropriately be applied to this government. It may be all, some, or none:
• A totalitarian regime has a highly centralized system of government that requires strict obedience.
• An authoritarian regime focuses on the maintenance of order at the expense of personal freedom.
• A fascist regime is a government that embraces extreme nationalism, violence, and action with the goal of internal cleansing and external expansion.

Communism in the Soviet Union

Introduction, the rise of stalin, communism and fascism.

• Both, of course, exhibited an authoritarian impulse to bring the population into line with the aims of the state.
• Both sought to install a totalitarian system that could do as it pleased.
• Both used violence to achieve political ends.
• Both rejected liberalism.
• The fascist “new man” even had a counterpart in the “new Soviet man”. Each was a mythic symbol of their movement’s values.
• The Soviets embraced left-wing socialist internationalism, while fascists embraced right-wing ethnic nationalism.
• The Soviets, in theory at least, rejected the doctrines of racism and ethnic nationalism, while these doctrines were central to fascism.
• Soviet communism wanted to erase class and gender inequalities, while fascists wanted to affirm social and gender hierarchies that limited women to marriage and motherhood and promoted a violent cult of masculinity for men.
• A premier is a head of a government, like a prime minister.
• Collectivization is the idea that, within a state, nothing can be privately owned because everything is meant to be shared with all members of the state.

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Full text of Elements of Soviet Labor Law: Penalties Facing Russian Workers on the Job : Bulletin of the United States Bureau of Labor Statistics, No. 1026

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The experience of eastern european forced laborers in germany.

During World War II, Nazi authorities condemned millions of Eastern Europeans to forced labor as part of an aggressive campaign to conquer and establish a colony in Eastern Europe.

Top image is of female forced laborers wearing “OST” (Ostarbeiter) badges are liberated from a camp near Łódź, January 1945, Łódź Poland, United States Holocaust Memorial Museum, courtesy of an unknown Russian archive, 19317. 

"It was a beautiful afternoon the day we left Krakow. Our homeland, abused by the occupation said goodbye to us with a sunny day. The monotonous clatter of the train wheels painfully reminded us that it was taking us away as slaves.” – Maria Hosajowa, a former Polish forced laborer

During World War II, Nazi authorities condemned millions of Belarussians, Estonians, Latvians, Lithuanians, Poles, Russians, Ukrainians, and Yugoslavs to forced labor as part of an aggressive campaign to conquer and establish a colony in Eastern Europe. Nazi forced labor policy in occupied Eastern Europe was a product of Hitler’s colonial ambitions, Nazi racial ideology, and economic necessity resulting from the war with the Soviet Union.

Nazi racial ideology, which denigrated Slavs and placed them slightly above Jews and Roma in the Nazi racial hierarchy, impacted almost every aspect of the forced labor experience for Eastern Europeans. This can be seen in the registration process, transport to Germany, working and housing conditions, and food rationing. Although conditions varied significantly throughout labor camps in Germany compared to Western European laborers, Eastern Europeans often faced discrimination, worked and lived in punitive conditions, and experienced mental and emotional trauma.

Registration and Transport to Germany

After Fritz Sauckel, the Nazi Plenipotentiary General for Labor, established quotas for conscripting men and women to work in Germany, Nazi authorities increasingly relied on violence to involuntarily “recruit” millions of men and women from Eastern Europe. Immediately following conscription, a Nazi medical team gave all Eastern European forced laborers a physical examination and, since Nazi racist thinking assumed all Slavic people to be disease-ridden, they were also given a decontamination shower prior to being transferred to a transit camp to await deployment.

Transit camps were often located in liquidated POW camps, abandoned factories, warehouses, or former schools near local German labor offices. There were numerous transit camps established along border towns in the major cities of the Occupied Eastern Territories, in the so-called General Government in parts of occupied Poland, and within Germany itself. Since the majority of forced laborers came from Poland and the Soviet Union, many transit camps, such as those located in Łódź, Przemyśl, and Poznań, were equipped with enough staff to process and register thousands of forced laborers per day.

All Eastern European forced laborers were assigned Arbeiterbücher für Ausländer, which was their official worker documentation. “Arbeiterbücher für Ausländer belonging to the author’s grandparents, Maria Swerden and Ivan Popowycz,” Popowycz family documentation, photo taken by author in August 2017.

Which transit camp forced laborers passed through depended on where they lived, but according to historian Sophie Hodorowicz Knab, all transit camps shared several features:

“All had this in common: they were often filthy, unheated, without running water, without suitable numbers of toilets or lacking basic sanitary equipment altogether, and with the appropriate cots or beds to accommodate the thousands of individuals who passed through every day.”

After a short stay in a transit camp, Nazi labor officials made a transport list, lined individuals up, and marched them to the nearest train station. Then, Nazi guards packed anywhere from 60 to 80 men, women, and children into extremely overcrowded cargo wagons, usually with no place to sit or lay down. Inna Kulagina, a former Ukrainian forced laborer, described her week-long journey to Germany in the fall of 1942:

“It was a terrible feeling, because we were being transported like animals, everyone in one space. It was already October, it was cold. We slept with our clothes on. We would wake up and no one could wash, everything was dirty. In the truest sense we were [treated] like livestock.”

As Kulagina testified, during the winter occupants froze, but in the summer months the stifling heat caused heat stroke and dehydration. During the trip, transports were often shunted off main railways to allow trains carrying German troops to the Eastern Front to pass. Even though trains stopped frequently to pick up additional forced laborers throughout the day, passengers were only allowed to disembark the train once at night. In some cases, Nazi labor officials provided a small ration of bread but, more often than not, Eastern Europeans had to rely on any food they brought with them for the journey to Germany.

Unused OST badge that would have been worn by a forced laborer to identify them as an Ostarbeiter Worker from the East, usually Russian or Ukrainian, deported to work in Nazi Germany. “Unused OST badge,” 1942-1945, United States Holocaust Memorial Museum, 2005.506.4.

To keep spirits up, many sang patriotic songs, conversed, or prayed together. Others plotted ways to escape, but there were few opportunities since each boxcar was heavily guarded. A German labor official also accompanied each train, with copies of the transport list to hand over to the district labor office in Germany. If a person escaped and did not arrive at their designated reception center, German authorities sent copies of the escapee’s documentation back to the local labor office in Eastern Europe, and the matter was turned over to the SS and local police.

“At the border…the train slowed down and a few individuals jumped off. They were shot at unrelentingly. Were they successful in their escape or were they left on the banks of the railroad tracks?” – Anonymous former Polish forced laborer

The terrible conditions on train transports to Germany created a heavy atmosphere since the only information provided to forced laborers by Nazi labor officials was that they were being sent to work in Germany. Rarely did they know their final destination, what kind of work they would be assigned, or how long they would be forced to stay abroad.

Job Assignment and Working Conditions

Upon arrival in Germany, Eastern European workers were given an additional medical examination and placed in another transit camp where they waited for their work assignment. It was also during this time that women were given a second “racial inspection” to determined their eligibly for the Nazi housemaid program. 

This program employed Eastern European forced laborers to work in German homes taking care of children, performing household chores, and assisting in maintaining small farms. In order to prohibit injecting the German race with any undesirable racial elements, only Eastern Europeans with distinctive German physical characteristics were assigned to work in German households.

The Deutsche Arbeitsfront , the Nazi organization responsible for forced labor policy, originally attempted to assign Eastern European forced laborer jobs based on education, past employment, and language skills. However, as the war continued and the Wehrmacht  faced setbacks on the Eastern Front, the agency delegated jobs based on war needs. As a result, the majority of Eastern European forced laborers worked in the industrial sector—in textile mills, sugar refineries, ammunition factories, airplane and railcar manufacturing, chemical plants, rubber factories, and coal mines.

Work in the industrial sector usually began with a wakeup call between 4:00 and 5:00 a.m., after which the factory guard ( werkschutz ), typically an elderly man too old for military service, escorted the forced laborers to the factory grounds. Although they often worked with Germans and foreign laborers from Western Europe, Nazi regulations required Western and Eastern workers to be kept physically separate whenever possible. This ensured that Eastern Europeans were assigned the more dangerous and labor-intensive jobs. As a result, many Eastern Europeans had to work in confined spaces with contaminated air and with caustic, harmful materials.

Female foreign workers in Stadelheim work in a factory owned by the AGFA camera company, May 1943, Germany, United States Holocaust Memorial Museum, courtesy of National Archives, 09047.

Forced laborers from Eastern Europe also worked on small and large farms where they tended and plowed fields, harvested grain and vegetables, milked cows, fed cattle, mucked livestock stalls, and cut weeds. The personalized circumstances of working on a small family farm usually led to more humane treatment by employers and higher food rations, but on large agricultural estates, forced laborers were under the constant eye of an armed foreman. Janina Tuminska, a teenager when she worked on a farm for two years in East Prussia, remembered what this was like:

“Not once could you straighten up, look up to the sky or along the road…your nose always had to be to the ground, your hands in constant motion…I had so many jobs to attend to. My only rest was washing the dishes and peeling the potatoes. And in winter evenings, when the hard work was finished early, I had to knit with stiff and aching fingers.”

The working conditions in Germany varied significantly between industrial and agricultural sectors, and the character of German factory managers and farm owners. Nonetheless, in both economic spheres, Nazi labor policy mandated 12-hour workdays, six or seven days a week. Although forced laborers were paid, Eastern European wages were about 50 to 85 percent less than what German and Western European workers received. 

Eastern European forced laborers also had to pay a social compensation tax to the state as well as fees for food, shelter, and clothing. Even if a small sum remained, Eastern Europeans could not buy anything since they were not allowed in German stores and almost everything was sold on ration cards.

In May 1942, Sauckel issued a decree ordering that “as far as it is possible, separate camps are to be provided for the members of different nations.” The combination of Nazi racial ideology and Sauckel’s instructions ensured that housing facilities kept Western and Eastern Europeans strictly segregated. In larger housing complexes—such as the camp barracks in Mainz—Poles, Ukrainians, and Russians resided in separately assigned buildings, whereas in smaller camps national groups were divided into separate rooms with their own washrooms, sinks, and toilets.

Fritz Sauckel, the former Plenipotentiary General for Labor, in his prison cell at the International Military Tribunal trial of war criminals at Nuremberg, November 20, 1945-October 1, 1946, Nuremberg, United States Holocaust Memorial Museum, courtesy of National Archives, 14132.

Camp barracks in industrial centers varied in size, but most have been described by former forced laborers as poorly constructed, surrounded with barbed wire, and heavily guarded. The barracks were typically equipped with one small stove, a limited number of washrooms and toilets, beds filled with sawdust mattresses, and few blankets. Kazimier K., a former Polish forced laborer who worked at an industrial firm in Berlin, described the primitive conditions in her testimony:

“There were twenty girls in our room. There were ten bunk beds, wooden ones…the bunk beds were made of narrow boards as wide as the palm of a hand…the mattresses stuffed with straw…two thin blankets…there weren’t any sheets just the blankets…there was one table, a coke stove and two benches…those were our furnishings…hangers for our clothes was [sic] a stick found on the road and a piece of string…that’s how we lived.”

In general, those working on farms lived in healthier accommodations. Some German farmers, in spite of Nazi labor regulations, arranged decent living situations for Eastern Europeans working on their farms. Even those who were housed in cramped and poorly lit rooms in attics, converted clothes closets, or basements, had more privacy and adequate furnishings.

Regardless of the size of camp barracks, the difference in housing accommodations for Eastern and Western Europeans was a significant detail that most former forced laborers cite. Housing for Western Europeans were similar to those provided for German workers, which were less crowded, outfitted with proper bedding, furnished with tables and chairs, and equipped with a sufficient number of bathrooms.

Food Rations

Perhaps the most difficult aspect of the forced labor experience for Eastern Europeans was the meager food rations that often led to severe hunger, malnutrition, and outright starvation. Similar to the housing situation, the amount of food forced laborers received depended on whether one was employed in the industrial or agricultural sector, with the latter having access to better food or more options to supplement minimal rations.

Janin Tuminska, who worked on a small German farm, described what a typical meal for farm workers consisted of in her oral history:

“It wasn’t the worst. We ate what they [Germans] ate only at a different table, in the kitchen. There were four to five meals daily depending on the work and the season. For the first and second breakfast—coffee and bread with fat (lard, margarine, sometimes butter) or marmalade. An afternoon supplement if one was doing heavy work also the same. For supper—hot potatoes topped with some kind of fat, milk, or barley soup, sweetened.”

In contrast, Eastern Europeans working in factories received one cup of coffee or tea, 200-300 grams of bread, and one or two cups of watery cabbage soup per day. These rations, however, largely depended on what food was available, and as the war continued, food rations often decreased. For instance, in the Gutehoffnungshütte iron and steel plant in Düsseldorf, Eastern European workers only received three slices of bread and one serving of watery soup made from carrots or turnips each day.

In other areas, Eastern European forced laborers received small amounts of potatoes, beets, or spinach, but as Julia Alexandrow, a former Ukrainian forced laborer noted in her memoir, “occasionally we had to pick bugs…sometimes fat green caterpillars like worms out of our ‘lunch,’ but we ate it anyway…it was all there was.” Poor food rations led some factory workers to volunteer on farms after hours since they were paid with extra food such as milk, bread, and butter.

In April 1942, following the influx of Eastern workers into Germany, the Nazi administration decreased food rations for German civilians, German workers, and foreign workers. Consequently, Eastern European workers often faced complications from malnutrition. 

For example, in the Middledeutsche Motorenwerke plant in Leipzig, an average of 12 percent of forced laborers missed work due to undernourishment after the new regulations were put in place. According to the camp physician at the Krupp Steel factory in Essen, forced laborers collapsed on the floor from hunger and many complained of dizziness. Larissa Kotyeva remembered that in one instance she was sick from not eating enough and her manager “rebuked her for misbehavior” and took away her food rations for a week as a form of punishment.

Memorial to all forced laborers located in Nuremberg, Germany, photo taken by author in June 2019.

In comparison, the Reich Minister of Food and Agriculture established a standard weekly ration for German and Western Europeans in the spring of 1942, which consisted of 450 grams of meat, 225 grams of fats, 2,800 grams of bread (400 grams per day), and 5,350 grams of potatoes (750 grams per day). While these rations decreased over the course of the war, German and Western European workers received more food than Eastern Europeans.

Nazi labor officials also gave German and Western Europeans extra rations for performing “heavy” work and for working overtime. They also were allowed to receive packages from the Red Cross. Wanda S., a Ukrainian forced laborer working at a factory in Essen, vividly recounted the disparity in food distribution in an interview stating, “There were other camps for French, Italians, and Slovaks. The French and Italians received packages from the Red Cross. To this day, I’ll never forget how they ate before our eyes.”

Initially, Nazi foreign labor regulations prohibited Eastern European workers from leaving camp barracks except to go to work, and banned them from interacting with Western European or German workers. According to Sauckel’s May 1942 regulations, “The use of freetime [sic] of the foreign workers and workers within and outside of the camps is to be made within the framework of the given war-limited possibilities and according to the peculiar qualities of the workers.” These vague instructions allowed industrial managers and farm owners considerable leeway in regulating time off.

In 1942, industrial workers were given time off for good behavior and “exceptional productivity,” although Eastern Europeans were only allowed to leave the camp barracks in small groups and had to be accompanied by a German supervisor. In contrast, those employed on farms typically had Saturday or Sunday afternoons off and, in many cases, were encouraged to attend church services.

At all times, Eastern Europeans had to wear a badge designating their nationality on their right chest to keep them separate from the German populace. Men and women from the areas of prewar Poland and the Nazi-occupied General Government had to wear a yellow badge with a purple “P” to identify them as Polish citizens. Those from prewar Soviet territory were assigned a blue, rectangular badge with the letters “OST” written in white.

Unused forced labor badge, yellow with a purple P and a purple border, that would be worn to identify a Polish forced laborer in Nazi Germany, circa 1940-1945, United States Holocaust Memorial Museum, 2005.506.5.

By 1943, however, the German Labor Front granted all forced laborers one day off per week and the right to leave camp barracks without a chaperone. This was as long as they adhered to a curfew and wore their assigned national badge. In July 1943, in an attempt to increase productivity, DAF also organized individual meeting houses for separate national groups in cities that employed a large number of foreign workers. These meeting places often held dances and concerts and created opportunities for forced laborers to practice cultural traditions, celebrate their own national and religious holidays, and share news of events back home.

Remembering the Forced Labor Experience

The experience of forced labor for Belarussians, Estonians, Lithuanians, Latvians, Poles, Russians, and Yugoslavs was completely overshadowed by Nazi racial ideology, which created a tightly controlled and closed system of subjugation. According to Knab, “Any infraction of the rules resulted in police or Gestapo involvement, with the looming threat of removal to a concentration camp or prison.”

Living in a state of constant supervision and surveillance left psychological scars on former forced laborers. Many recall mental suffering, bad nerves, and periods of extreme sorrow and grief while employed in Germany during the war. When asked in an interview to describe how she remembered the war, Halyna Jachno stated, “The war was a severe blow of fate for the whole people. You just had to get through it. I suffered along with everyone.”

Despite living in a world of hardship and poverty, Eastern Europeans relied on each other and found ways to exert their own agency, if not outright resistance to Nazi racial policy and forced labor regulations. Feigning illness, decorating barracks with photographs from home, organizing prohibited religious celebrations, stealing extra food rations from factory kitchens, or refusing to wear their national badge when leaving the camp all served as small ways in which Eastern Europeans resisted Nazi authority.

After the war ended, remembering the forced labor experience created a feeling of solidarity between Eastern Europeans who remained in Germany and those who returned home. Therefore, memories of World War II and the suffering it caused served as a collective memory among many different Eastern European national groups, which not only bonded them, but also became a significant marker of national identity in postwar displaced persons camps and diaspora communities.

Jennifer Popowycz, PhD

Jennifer Popowycz, PhD is the Leventhal Research Fellow at The National WWII Museum. Her research focuses on the Eastern Front and Nazi occupation policies in Eastern Europe in World War II. 

Nazi Forced Labor Policy in Eastern Europe

During World War II, millions of Eastern Europeans were involuntarily deported to serve as forced laborers in Germany.

The “Holocaust by Bullets” in Ukraine

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The People’s War: Women, Children, and Civilians in the 1944 Warsaw Uprising

Polish civilians played a critical role in the two-month long conflict in Warsaw.

Warsaw Burning: The German Response to the Warsaw Uprising

The German response to the Warsaw Uprising was characterized by ruthless terror and unrelenting bloodshed, which caused civilian support to drastically diminish.

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Lee Miller: Witness to the Concentration Camps and the Fall of the Third Reich

One of America’s only women war correspondents reports on the liberation of the concentration camps, Soviet and American troops meeting at Torgau, and Hitler’s burning villa in Berchtesgaden

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The symposium, which took place from February 29 to March 1, 2024, featured topics expanding upon the Museum’s special exhibit, Our War Too: Women in Service .

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3.5: Economics and Development in the Soviet Union

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Under Lenin and later by Stalin, the Soviet government advocated a communist system. In a capitalist system, market forces dictate prices according to supply and demand. Those who control the means of production, known as the bourgeoisie in the Marxist philosophy, are much wealthier than the workers, known as the proletariat. In a communist system, however, the means of production are communally owned, and the intended result is that there are no classes of rich and poor and no groups of landowners and landless workers.

In reality, no government practices pure capitalism or pure communism, but rather, governments are situated along a continuum (Figure \(\PageIndex{1}\)). Anarchy, the absence of government control, exists only in temporary situations, such as when a previous government is overthrown and political groups are vying for power.

In most Western countries, a mix of capitalism and socialism, where economic and social systems are communally owned, is practiced to varying degrees. Denmark, which has been consistently ranked as one of the happiest countries in the world, has a market economy with few business regulations but government funded universal healthcare, unemployment compensation, and maternity leave, and most higher education is free. The United States is largely capitalist, but the government provides retirement benefits through the social security system, funds the military, and supports the building and maintenance of the interstate highway system. Although China’s government is communist, it has also embraced elements of the market economy and allows some private enterprise as well as foreign trade and investment. All governments must address three basic questions of economics: what to produce, how to produce, and for whom to produce. The answers to these questions vary depending on the state and the situation.

In the Soviet system, the government dictated economic policy, rather than relying on free market mechanisms and the law of supply and demand. This required the government to intervene at all levels of the economy. The prices of goods needed to be set by the central government, the production levels of goods needed to be determined, the coordination of manufacturers and distributors was needed – everything that is traditionally accomplished through private individuals and companies in a capitalist model was the responsibility of the Soviet government.

To coordinate such a wide array of goods and services, long-term planning was needed. The Soviet government instituted a series of five-year plans which established long-term goals and emphasized quotas for the production of goods. This system lacked flexibility, however, and was often inefficient in its production and distribution of goods.

The Soviet government had two principle objectives: first, to accelerate industrialization, and secondly, to collectivize agriculture. The collectivization of agriculture, though intended to increase crop yields and make the distribution of food more efficient, was ultimately a failure. By the early 1930s, 90 percent of agricultural land in the Soviet Union had become collectivized, meaning owned by a collection of people rather than individuals. Every element of the production of agriculture, from the tractors to the livestock, was collectivized rather than individually owned. A family could not even have its own vegetable garden. Ideally, under such a system, all farmers would work equally and would share the benefits equally.

Unfortunately, the earnings of collective farmers were typically less than private farmers. This action led to a reduction in agricultural output and in the number of livestock. Coupled with a poor harvest in the early 1930s, the country experienced widespread famine and food insecurity. It is estimated that 12 million people died as a result of the collectivization of agriculture.

In addition, Soviet industrial development was plagued with inefficiencies. In a typical market economy, particular places specialize in the production of certain goods and the system works out the most efficient method of production and distribution. A furniture maker might locate near a supply of hardwood to minimize transportation costs. A large factory might locate near a hydroelectric plant to ensure an inexpensive power source. Certain places, due to luck or physical geography, have more resources than others and this can lead to regional imbalances.

The Soviet government, however, wanted everything and everyone to be equal. If one region had all of the industrial development, then the people in that region would be disproportionately wealthy and the region would be more vulnerable to attack by an outside force. The government also hoped that the dispersal of industry would force the country to be interconnected. If one area had a steel plant and another had a factory that used steel to produce machines, the two would have to rely on one another and neither would have an advantage. Thus, they aimed to disperse industrial development across the country.

If you were a geographer tasked with finding the best location for a new industry, you’d likely take into account underlying resources, such as the raw materials needed for manufacturing and the energy needed to power the factory. You might think about labor supplies and try to locate the industry near a large labor pool. You might also think about how to get the good to consumers efficiently, and locate near a shipping port or rail line. Rather than take these geographic factors into account, however, the Soviet government sought to disperse industry as much as possible. Industries were located with little regard for the location of labor or raw materials. This meant that inefficiencies were built into the system, and unnecessary transportation costs mounted.

The substantial costs of supporting an inefficient system of industrial development were magnified by the costs needed to fund the Cold War . The Cold War occurred following World War II and was a time of political and military tension primarily between the United States and the Soviet Union. Western Europe, which was largely capitalist, was divided from the communist Soviet Union by the so-called Iron Curtain , a dividing line between the Soviet Union and its satellite states who aligned with the Warsaw Pact, a collective defense treaty, and Western European countries allied through the North Atlantic Treaty Organization (NATO) (Figure \(\PageIndex{2}\)).

The Cold War was so named because it was different from a traditional “hot” war in that it did not involve direct military conflict between the United States and the Soviet Union. It did, however, result in armed conflicts in other parts of the world as well as a massive stockpile of military weaponry.

During the 1980s, Soviet leader Mikhail Gorbachev supported restructuring the Soviet economy with a series of market-like reforms, known as Perestroika. He also supported glasnost, an increase in government transparency and openness. Unfortunately, these reforms could not change the system quickly enough and loosened government controls only worsened the condition and inefficiencies of the Soviet economy.

The Soviet government, already stretched thin financially from a system of development that largely ignored geography, could not support the unprofitable state-supported enterprises and mounting military expenses. Ultimately, the country went bankrupt. In a system where every aspect of the economy is linked, it only takes one link to break the chain and far-from Gorbachev’s policies strengthening the chain, Perestroika only weakened it further. The Soviet Union formally dissolved in 1991. Some have argued that the Soviet Union collapsed economically. Others maintain that it was primarily a political collapse, led by an ineffective government and increasing territorial resistance. Geography largely played a role as well, with the government ignoring fundamental principles of spatial location and interaction.

a time of political and military tension primarily between the United States and the Soviet Union following World War II and lasting until the early 1990s with the fall of the Soviet Union

an imaginary dividing line between the Soviet Union and its satellite states who aligned with the Warsaw Pact, a collective defense treaty, and Western European countries allied through the North Atlantic Treaty Organization (NATO)

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Established 1996 • Raymond F. Smith, Editor

The Russian Job: The Forgotten Story of How America Saved the Soviet Union from Ruin

Review by renee m. earle, by douglas smith, farrar, straus and giroux,, november 2019.

In this gripping chronicle of the 1920-1923 Russia famine and American efforts to save the starving through the American Relief Administration (ARA), Douglas Smith succeeds in bringing the reader closer to understanding the apocalyptic conditions of Communist Russia at that time. Through pictures, letters and other archival material, he tells a story at once grisly in its depiction of dehumanizing despair that led to suicide, indiscriminate murder, and cannibalism but also uplifting as he introduces the work of Herbert Hoover and the men of the ARA who themselves risked health and life itself to save millions in the remotest regions of Communist Russia.

The story unfolds against the backdrop of persistent political calculations and suspicions on the part of both the West and Communist Russia. The “Red Scare” was in full swing in the U.S. as radical actions killed Americans. Communist leaders were unrelenting in their ruthless maneuvers and missteps as they tried to prevent access to the Russian people by what they perceived as a “Trojan Horse” designed to bring down their new government under the guise of famine relief. Meanwhile, debates among Americans and Western allies centered on whether official recognition of the new Soviet state would moderate or encourage the Bolsheviks.

In 1921, 30 million people in Communist Russia faced starvation. They froze, were lice infested, and diseased. Whole villages disappeared. Nevertheless, the Bolshevik Government often hesitated in sending relief in its drive to stay in power and bring about a new international social order. Smith shows that even Maxim Gorky’s appeal to “humanitarians of the world” was a reluctant appeal.

Smith’s “forgotten story” begins with a recap of Herbert Hoover’s tremendous efforts in establishing “WWI’s Marshall Plan,” reaching not only allied countries but also defeated Germany and Austria-Hungary, in all, 32 countries. Based on purely humanitarian reasons, Hoover now championed unofficial relief for the starving under the Bolsheviks, whom he vehemently opposed politically.

Smith introduces an engrossing list of characters, leaders of the in-country ARA relief efforts, varied in their backgrounds, alternating during their assignments between incapacitating recoil at the horrors they witnessed and optimism for what the U.S. action might accomplish in bringing the two countries closer together. Their personal stories brilliantly illuminate the conditions and events related.

Given the utter devastation of Soviet Russia after years of wars and political mismanagement, the ARA men soon encountered and promoted “mission creep.” In addition to feeding the hungry, they assisted teachers, scientists, and artists, built infrastructure, and delivered clothing and medicines. They traveled by boat, train, horseback, Cadillacs, and sleighs. The inhospitable Russian climate was as much the enemy as broken-down railways and barely visible roads.

At the same time, many ARA men found the magic, mystery, and tragedy of Russia compelling. Amid the misery, culture prevailed. They attended performances and fell in love with Russian women.

Hopes that the ARA’s efforts would leave lasting proof of U.S. support for the Russian people and that Russia would quickly develop economically and politically proved illusory, however. Lessons learned were nowhere to be found in the Soviet response to famine in the 1930’s. When the ARA ended its mission in 1923, immediately and methodically, the erasing began. Soviet Cold War textbooks dutifully characterized the relief efforts as a spy ring organized to bring down the Communist state.

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Russia Lifts Soviet-Era Rules On What Jobs Women Can Do

Charles Maynes

Rules have been changed in Russia to allow women to do about 350 types of jobs that were previously forbidden. The move is being celebrated as a step forward for gender equality.

RACHEL MARTIN, HOST:

Change is in the air in Russia, at least if you're an aspiring truck driver or a boat captain and female. Starting this year, Russia's government lifted restrictions on hundreds of jobs for women. The move is being celebrated as a step forward for gender equality there. Charles Maynes has the story from Moscow.

CHARLES MAYNES, BYLINE: Evgeniia Markova used to be a computer programmer until the day she decided that instead of staring at the screen, she wanted to stare out the windshield.

EVGENIIA MARKOVA: Towns, cities, roads, lakes, rivers, sky - I like watching.

MAYNES: And plenty of it she does. Now a long-haul trucker, Markova drives routes across Russia's vast highways, accompanied always, she says, by her favorite tunes.

(SOUNDBITE OF GRAZHDANSKAYA OBORONA SONG)

MARKOVA: I like punk rock (laughter). Yeah, I like punk rock.

MAYNES: And as of this year, she can finally hit the road legally. Truck driving is one of more than 350 jobs now open to Russian women after the government rescinded a late Soviet-era rule barring them from professions officials deemed dangerous to reproductive health. The change marks a victory for women's rights advocates who spent years fighting the restrictions at home and abroad. After Russian courts rejected lawsuits alleging workplace discrimination, a U.N. rights commission called on Russia to end the work bans. Last summer, Russia's Ministry of Labor finally agreed to amend the rules starting in 2021. Markova says the change ends restrictions that were not only discriminatory but just plain dumb.

MARKOVA: I was really very angry because I found out that I still can't work when I already had a license - ridiculous.

MAYNES: More ridiculous still, to avoid the hiring ban, Markova worked for a time under a man's name, Evgeny Markov, which she and her husband found entertaining until they tried to take out a loan.

MARKOVA: Just try to take credit for a house when not your name is written on your card. It was really a problem. It wasn't funny at all.

MAYNES: And it wasn't always this way.

(SOUNDBITE OF ARCHIVED RECORDING)

VLADIMIR LENIN: (Non-English language spoken).

MAYNES: Following the Russian Revolution of 1979, Bolshevik leader Vladimir Lenin, heard here, placed the new Soviet Union at the vanguard of women's rights, offering the other half of the proletariat access to education and the growing Soviet industrial workforce.

UNIDENTIFIED PERSON #1: In Russia, too, everything that can be done by women is being done to release their menfolk for the fighting forces.

MAYNES: The policy arguably saved the USSR when Soviet women kept factories running at breakneck pace during World War II and the conflict's devastating aftermath.

UNIDENTIFIED PERSON #1: Remember, in the Soviet Union, there can hardly be a woman who hasn't lost husband, brother or lover killed in the terrible battles on the eastern front.

MAYNES: Fast-forward to 1963, and there was also this iconic moment.

UNIDENTIFIED PERSON #2: (Non-English language spoken).

MAYNES: Soviet cosmonaut Valentina Tereshkova, nicknamed Chaika, or the seagull, blasted into orbit as the first woman in space.

VALENTINA TERESHKOVA: (Non-English language spoken).

MAYNES: The moment handed the Soviets a propaganda coup in the Cold War's emerging gender battles, even if women's real lives behind the Iron Curtain were far more complicated.

ALENA POPOVA: The main slogan of the USSR was that men and women are equal in terms of workforce, but it's not true.

MAYNES: Alena Popova is a leading women's rights advocate. She says women then and now faced expectations to shoulder careers as well as the demands of family life at home.

POPOVA: It was our reality in USSR and in Russia. Females always have double duties.

MAYNES: And faced double standards.

(SOUNDBITE OF FILM, "TAKE CARE OF THE WOMEN!")

UNIDENTIFIED ACTOR: (As character, non-English language spoken).

MAYNES: By the early 1980s, Soviet films like "Take Care Of The Women!", a comedy about an all-female tugboat crew with dreams of joining the Soviet civilian fleet, continued to promote the idea of women's equality, sort of. The movie was by then exactly that - more fiction than reality.

SVETLANA MEDEVEVA: (Non-English language spoken).

MAYNES: Svetlana Medeveva, a real-life boat captain on the Volga River who initiated the discrimination lawsuit, says she was shocked to realize that Soviet work barriers had been put in place since the early 1970s. Worse still, Vladimir Putin's government renewed them at the turn of this century in an effort to boost Russia's declining birthrate. For Medeveva, that meant working in the shadows.

MEDEVEVA: (Through interpreter) My grandmother and my mom and dad all worked in the factories, and there was never a sense of something off-limits to anyone. No one would have guessed that there was a list banning you from some professions.

MAYNES: In fact, there are still some 100 jobs, including those in mining and construction, that remain off the books. Meanwhile, women earn 30% less on average than men in Russia, among the highest wage differentials in industrialized nations. And while Medeveva says she's happy most restrictions are now gone, she admits there is no making up for lost time, money or dreams

MEDEVEVA: (Non-English language spoken).

MAYNES: Medeveva had always hoped to captain a ship on the open sea, a job that takes years of certification and remains out of reach while she raises her young children.

MEDEVEVA: (Through interpreter) This is only good for the next generation of women. It'll be easier for them to go study and find the jobs they want.

MAYNES: Besides, changing attitudes is sometimes harder than changing laws, says the trucker Evgeniia Markova. It's something she was reminded of once again when she and her female co-driver were gassing up their truck on a recent run.

MARKOVA: One man, just about 50 or 60 years old, came up to us with huge eyes and asked, and how are you going without a driver?

MAYNES: In the end, he was left guessing, for Markova was already on her way - another highway, another view. For NPR News, I'm Charles Maynes in Moscow.

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