Russia

Wages and Work

In the post-Soviet era, social mobility is unlimited in theory, but in the mid-1990s economic factors play an important role in restricting upward movement for most Russians. Those without an established source of wealth generally are unable to purchase land, real estate, or enterprises, or to take advantage of other financial opportunities to increase their income and status. Because individuals under such limitations also lack opportunities to pursue higher education, they tend to remain at or below the socioeconomic level of their parents. In many cases, the younger generation has less earning power than the one that preceded it.

In 1995 official government estimates placed 39 million people, or 26 percent of the population, below the poverty line. Living standards, which dropped drastically in 1992, recovered somewhat in 1993 and 1994 before falling again in 1995 as the government tightened its social support spending policy (see Social Welfare, this ch.; table 11, Appendix). Other factors, such as inflation, changes in the minimum wage and minimum pension, and income from nonwage sources such as business activity and property, also influence annual income in a given period. Raised in mid-1994, then not again until April 1995, the minimum wage has provided little protection against intermittent periods of high inflation. Official income statistics are skewed because many Russians underreport their incomes to avoid taxes and because such statistics ignore important nonincome sources of well-being such as property.

The real incomes of state-sector employees fell as much as 30 percent in the first three quarters of 1995. Wages in the private sector have kept pace with inflation more consistently, unless an enterprise has financial difficulties such as debts owed to other enterprises. In both sectors, long-term failure to pay wages has become a chronic problem; it affected an estimated 13 million people in mid-1995. Enterprises also have responded to financial difficulties by laying off employees and by shortening work weeks, pushing more workers below the poverty line. Although many of the working poor retain the housing, health, and free holidays associated with employment, enterprises are rapidly withdrawing those Soviet-era privileges.

The economic condition of many Russians is ameliorated by earnings from additional jobs or by access to private plots of land. In a 1994 survey, 47 percent of respondents reported some form of additional material support, and 23 percent reported having supplementary employment. In some cases, unofficial employment is quite profitable. Of the "working unemployed," Russians who consider themselves out of work but nevertheless hold some sort of job, 11 percent had incomes at least three times higher than the average wage in 1994. The large number of pensioners with unofficial jobs (approximately one in four) generally fare much better than those on fixed incomes, generating a disparity of status within the oldest segment of society. The easing of travel restrictions in post-Soviet Russia and the overall diversification of the private sector increased opportunities to earn supplementary income, through such activities as buying goods abroad and selling them inside Russia and offering a variety of private services such as repair work, sewing, and translation. In general, these opportunities are most accessible to young, well-educated Russians in large cities. But in many cases, well-educated individuals must sacrifice their social status by accepting unskilled jobs to make ends meet.

Some professional positions that are accorded high prestige carry a salary below that for certain categories of skilled labor. The upper echelons of the political, artistic, and scientific elites form the top of the occupation pyramid in terms of status and income. That category is followed by the professional, intellectual, and artistic intelligentsia; the most highly skilled industrial workers; white-collar workers; relatively prosperous farmers; and average workers. The bottom of the status and pay scales includes people employed as semiskilled or unskilled workers in light industry, agriculture, food processing, education, health care, retail trade, and the services sector.

Among the low-paying jobs are some that require higher or specialized education and that carry some level of prestige. Women predominate in these job categories, which include engineers, veterinarians, agronomists, accountants, legal advisers, translators, schoolteachers, librarians, organizers of clubs and cultural events, musicians, and even doctors. A 1994 World Bank report identified an increasing likelihood that positions offering lower wages would be filled by women, in most sectors and occupations of the Russian economy. Many women, however, reportedly accept jobs at lower levels of skill and remuneration in exchange for nonmonetary benefits, such as short commuting distances, minimum overtime hours, and access to child care or shopping facilities in the workplace (see The Role of Women, this ch.).