FINAL REPORT T O

NATIONAL COUNCIL FOR SOVIET AND EAST EUROPEAN RESEARC H

TITLE :

THE SOVIET EMPLOYMENT SERVIC E

AND THE SEARCH FOR EFFICIENC Y

AUTHOR :

CONTRACTOR :

Janet G . Chapma n

University of Pittsburg h

PRINCIPAL INVESTIGATOR :

Janet G . Chapma n

COUNCIL CONTRACT NUMBER : 627- 1

DATE :

March 198 5

The work leading to this report was supported in whole or in Dart fro m
funds provided by the National Council for Soviet and East Europea n
Research .

TABLE OF CONTENTS
PAG E

EXECUTIVE SUMMAR Y
I.

Introduction

II . The Nature and Causes o f

the Labor Shortage

III . Policies to Alleviate th e

Labor Shortage

11

IV.

The Job Placement Service

V . Oversight of the use of Labor i n

the Enterprise
VI.

Conclusions

36

63
70

Appendix A : Chronology of the Developmen t

of the Job Placement Service

75

Appendix B : Incentive Provisions in the Rule s

for the Formation of the Bonus Fund

83

Endnotes

99

References

120

Executive Summary
THE SOVIET EMPLOYMENT SERVICE AND THE SEARCH FOR EFFICIENC Y

The Soviet economy, in the perceptions of its leaders and economists ,

is facing an increasingly serious shortage of labor . In recent years, th e
Soviet authorities have been making efforts on many fronts to improve th e
allocation and utilization of labor . A major role in these efforts is playe d
by a labor bureaucracy, which has been created since the late 1960s .
This report covers briefly the nature and causes of the labor shortag e
and the wide range of policies designed to alleviate the shortage . Th e
focus of the report is on the activities of the labor bureaucracy, which ar e
covered in more detail . In particular, we are concerned with two issues .
First, the job placement service is described and analysed . The underlyin g
question is whether the job placement service should be viewed as a mean s
of providing the kind of information to job seekers and employers which woul d
make the labor market operate more efficiently or, alternatively, as a mean s
of strengthening administrative control over the movement of labor an d
decreasing the individual's freedom of choice of work . Secondly, the activities of the labor bureaucracy in the oversight of the use of labor at th e
enterprise level are described and analysed . The question here is whethe r
these amount to administrative interference with enterprise management an d
whether this is compatible with reforms intended to enhance the economi c
incentives for management to economize on labor . In each case, the questio n
of major interest relates to the relative emphasis on market-like versu s
administrative tools in the effort to improve the efficiency with whic h
labor is used .
The labor shortage can be explained by ambitious plans, a sharp declin e
in the number of persons reaching working age along with an increase in th e
number retiring, a mismatch between the geographic areas of plentiful labo r
supply (mainly Central Asia) and the areas of labor shortage and greatest nee d
(parts of the European RSFSR, Siberia, the Far North and Far East), a persistently high proportion of manual labor in auxiliary processes, absenteeis m
and turnover, general inefficient use of labor, and a systemic tendency fo r
enterprise management under a soft budget constraint to hoard labor, to make i t
easier to fulfill plans in the face of probable material/supply disruptions .
Since the reported absolute size of the labor shortage is small (under 2
percent of the labor force) the problem seems to be primarily one of misallocation and inefficient use of labor .
Policies to alleviate the labor shortage include efforts to increase th e
size of the labor force and to improve the allocation and utilization of labor .
Given the already high participation in the labor force of women as well a s
men, not much increase in the labor force can be expected . Major efforts her e
are pro-natal incentives aimed at an increase in the future size of the labo r
force ; the most recent measure is the provision of partial pay for new mother s
to remain at home with their infants until they reach the age of one, whic h
is currently being introduced . Other efforts include measures to induc e
mothers and pensioners to remain in, or to enter, the labor force by providin g
part time or at-home work and, for pensioners, allowing them to receive some

ii

or all their pension in addition to earnings and by increasing the pension fo r

each year worked past pension age without receiving pension . The number o f
pensioners in the labor force has increased . Very little progress appears t o
have been made in increasing the provision of part-time work for women, pensioners or students (another target) .
Efforts to improve the utilization of labor include the establishment o f
the labor bureaucracy and attempts to improve planning . Until recently, planne d
labor balances were apparently drawn up only on an aggregated basis . The firs t
labor balances at the oblast and city level were based on the 1979 census . Th e
labor bureaucracy at the national, republican and local levels is supposed t o
play an important role in planning to ensure that the availability of manpowe r
is taken into account .
There is an intensive campaign to reduce the high percentage of manua l
labor (some 40 percent of industrial workers) by mechanization, particularl y
in auxiliary processes . Each enterprise plan must include a target for th e
reduction of manual labor . Success will depend on the production of the necessary machinery and on adequate inducements for enterprise management (an d
perhaps also planners) to overcome their preference for investment in mai n
processes .
Many economists advocate a sharp reduction in the use of non-agricultura l
labor to help out on the farms, a practice which a Soviet demographer estimate s
takes the full time equivalent of 14 percent of the non-agricultural labo r
force . What the actual possibilities are for reducing this use of non-far m
labor is not yet clear, nor is the official policy on this .
A number of changes in incentive provisions for enterprise management hav e
been made to try to encourage economical use of labor . Labor productivity ha s
become a major determinant in the rules governing the formation of the enter prise bonus fund and the payment of bonuses to management . A new procedure fo r
calculating the wage fund, established in 1979, requires that this be done i n
terms of technically substantiated norms for wages per ruble of output . Th e
norms are supposed to be fixed ahead for five years and to be calculated i n
such a way as to ensure that labor productivity increases faster than wages .
Savings in the wage fund may be used to increase wages and to pay supplementar y
bonuses .
Along with incentives, a number of administrative measures have bee n
applied in the efforts to squeeze out excess labor, particularly since Septembe r
1978 . Since 1980, a limit on the number of employees has been set for eac h
enterprise and since 1982 limits are set for each ministry, department an d
republic . As will be explained below, the labor bureaucracy has a duty t o
oversee the use of labor at the enterprise level .
Both carrots and sticks are employed in the effort to induce workers t o
take the jobs where they are needed and to stay in them and to work hard . Sinc e
the abolition of World War II restrictions on mobility, the sticks are rathe r
weak and most use has been made of carrots . The differential wage system is the

iii
primary mechanism for attempting to achieve the desired allocation of labo r
between occupations, branches, and regions of the country and as a means o f
inducing persons to acquire additional skills and to work well . Except for th e
compulsory placement in their first job of graduates of daytime vocational schoo l
and institutions of higher education, individuals are free to seek out and choos e
jobs they are capable of performing . There have been two reforms of the wag e
structure, which is centrally determined, since the second World War, intende d
to take into account changes in demand and supply conditions .
A major concern has been to improve incentives by tailoring rewards mor e
closely to the results of individual effort . Some additional leeway has bee n
granted management to raise pay for those who perform additional tasks or whos e
qualifications are above the norm . A reorganization of labor at the lowes t
level into economically accountable "brigades" is intended to become the mai n
form of organization of labor . The essential notion is that a group of worker s
will undertake responsibility for the completion of a certain task by a certai n
date for a certain payment . They have considerable freedom to decide how t o
perform the task and how to divide up the payment among themselves .
Various efforts are being made to attempt to enhance worker satisfactio n
at work and to improveliving conditions, particularly in areas where it is har d
to attract and keep workers . A 1983 law enhances workers ' rights to be hear d
by management .
Besides all kinds of positive incentives, there has been a recent strengthening of disciplinary measures . For instance, the length of time required t o
give notice to quit has been lengthened from two weeks (1956) to 2 months (1983) .
A trend toward strengthening discipline began before Brezhnev ' s death but wa s
stepped up by Andropov, who conducted an intense campaign to expose corruptio n
and improve morale and discipline .
The labor bureaucracy currently consists of the USSR State Committee fo r
Labor and Social Questions, republican State Committees for Labor and department s
for labor of the executive committees of local government at the oblast leve l
and in the cities of Moscow and Leningrad . In addition, there are job placemen t
bureaus, which are under the jurisdiction of the local labor organs or of th e
republican state committee or, in some republics, both . This system dates fro m
late 1976 when the formerly separate republican systems were brought under th e
USSR State Committee .
The job placement bureaus act as intermediaries between individuals seekin g
work and enterprises needing workers . They attempt to match the qualification s
and interests of the individual with the needs of the enterprises . The bureau s
have lists of new or especially important enterprises to whom they are to giv e
priority in referring workers . In some cities, it is compulsory for both enter prises and individuals to go through the placement bureaus but even here ther e
is no compulsion on the individual to take the job to which he is referred no r
on the employer to hire individuals referred .
The placement service must be seen within the context of various forms o f
organized labor allocation which existed before its creation . Graduates of vocational and secondary specialized schools and of institutions of higher educatio n
are directed to their first jobs . There are a number of commissions to hel p
place special groups, such as juveniles, demobilized military personnel an d
invalids and a commission for the obligatory placement of " parasites" (persons

i v

refusing socially useful labor) . Organized recruitment has long been used fo r
transferring groups of workers to a (usually) new enterprise or constructio n
site . Another form is the resettlement of families, usually from one farm t o
another . Given these other forms of allocation, the main clinetele for place ment seems to be primarily among those wishing to change jobs rather than ne w
entrants to the labor force . The bureaus, nevertheless, do cooperate with th e
commissions for juveniles in the placement of graduates of the general secondar y
schools .
The development of the placement bureaus took some time but by mid-1980 ,
there were bureaus in all republics, in virtually all cities with a populatio n
over 100,000, in 31 percent of the cities with a population of 50,000 t o
100,000, and in 5 percent of the cities with a population below 50,000 .
The percentage of industrial wage earners hired through placement ros e
from 8 .7 percent in 1971 to 17 .2 percent in 1976 . It remains true that mos t
industrial wage earners (68 percent in 1976) are hired directly by the enter prise without mediation of the placement bureaus . For the economy as a whole ,
it was estimated that in 1980 about 15 percent of those hired were place d
through the placement bureaus and in cities where there were placement bureaus ,
about 30 percent . The total of 2 .9 million placed through the bureaus in 198 0
is large in relation to the increment in the labor force in that year of 1 . 9
million, but small in relation to Soviet estmates that some 20 million to 30
million persons change jobs each year .
The placement bureaus are self-financing . In some republics, the enter prise pays for each specific service received ; i .e ., for each person hired wit h
the help of the bureau and for each job advertisement placed with the bureau .
In other republics, the enterprise pays a fixed sum at the beginning of th e
year to cover all services for the year . There has been some controversy ove r
the method of financing . Some advocate that the bureaus should be finance d
from the local budgets to free the bureaus from direct financial dependence o n
the enterprises, and to provide more objective conditions for their referra l
services . Those opposing budget financing argue that it would destroy incentives and that it would require enterprises to pay for services they hadn ' t
ordered . Both sides of this controversy admit that records of hirings an d
firings are inadequate to provide a sound basis for appropriately differentiated taxes on the enterprises .
The work of the bureaus depends heavily on having enough information o n
job openings to be able to place applicants in satisfactory jobs and enoug h
applicants to fulfill enterprise ' s orders for workers . For information on jo b
openings the bureaus are dependent on the enterprise voluntarily placing order s
for workers . In a few republics the enterprises are required by law to pro vide information on vacancies and in some cities use of the placement bureau s
is compulsory for both enterprises and individuals . In some republics (th e
RSFSR and Belorussia, possibly others) job advertisements are officially a
monopoly of the bureaus . In Moscow, at least, personal observation indicate s
this law is routinely violated .
In a number of cities use of the placement service is compulsory--th e
" Ufa-Kaluga" system named after the first two cities to adopt compulsion . Th e
major advantage is the greater information available . There is no agreemen t
on whether the compulsion is otherwise desirable .

v
The placement service has shown an increase in the number of applicants ,
from 1 .3 million in 1971 to 2 .9 million in 1979 and the percent of applicant s
placed rose from 52 percent to 71 percent of the applicants . It is claimed tha t
the time between jobs has been reduced, that the number who change occupation s
when changing jobs has fallen and that the retention rate of those placed by th e
bureaus is greater than for those who find their own jobs .
The network of placement bureaus would facilitate an increase in the administrative allocation of labor but I see no evidence that this is intended . Eve n
under the Ufa-Kaluga system, there have been no suggestions that the worker ' s
freedom of job choice is intentionally limited . There might, however, be informa l
pressure by the inspectors designed to fill the jobs on their priority lists o r
jobs in enterprises which contribute most to the income of the bureau .
The labor organs play a large role in attempting to ensure that enterprise s
stop wasting labor, and that they do not exceed their employment limits . The y
may investigate any aspect of the enterprises ' operations and offer frequen t
suggestions for improvements . They are advisory bodies and for enforcemen t
they must go through government or party organs . The sanctions are refusal t o
refer workers to enterprises with above-limit workers, having the relevan t
ministry reduce the bonus of top management for exceeding the wage bill, o r
(through the State bank) reducing the wage fund if the planned wage fund i s
exceeded .
The placement bureaus might be expected to take over from enterprise manage ment the duty of finding jobs for redundant workers, thus eliminating an unnecessary deterrent to firing excess workers ; apparently full advantage has not ye t
been taken of this option .
A number of labor organs report fairly impressive reductions in the numbe r
of enterprises with either too many or too few workers but it is not clear ho w
effective the limits are . They appear not to be very compatible with th e
improvements in the economic mechanism and incentives to economize, seen a s
the best hope for improvement in the longer run .
The placement service itself seems to have led to some improvement i n
the functioning of the market for labor . All measures together seem to hav e
had atleast a modest positive tendency to alleviate the misallocation of labor .
The declining rate of increase in labor productivity seems to have stopped .
The migration patterns in recent years have begun to change from direction s
contrary to needs to directions in line with needs . Since 1975, there has bee n
a net inflow into Siberia and a small net outflow from the Central Asian Republic s
has begun .

I . INTRODUCTIO N

The Soviet economy, in the perceptions of its leaders and economists, i s

facing an increasingly serious shortage of labor . This stems from demographi c
factors, from misallocation, and from inefficient use and hoarding of exces s
labor in the enterprise . Serious study of the allocation and misallocation o f
labor, of demographic characteristics and trends, of attitudes toward work an d
causes of labor turnover began only in the early 1960's but this has expande d
significantly . In recent years, the Soviet authorities have been making effort s
on many fronts to improve the allocation and utilization of labor . A major rol e
in many of these efforts is played by a labor bureaucracy which has bee n
developed since the late 1960's .
The current bureaucratic apparatus for dealing with labor consists of th e
USSR State Committee for Labor and Social Questions (USSR Goskomtrud),

unde r

the USSR Council of Ministers ; republican State Committees for Labor (agai n
Goskomtrud) in each republic under the republican councils of ministers ; an d
departments for labor of the executive committees of People ' s Soviets at th e
oblast or krai level and in some large cities, notably Leningrad and Moscow .
(In autonomous republics the local organs are administrations for labor of th e
council of ministers .) We shall refer to these local units as labor organs .
There are also job placement bureaus or "bureaus for job placement and information to the public on the needs of enterprises for workers ." In most republic s
these bureaus are under the jurisdiction of the local labor organs, in som e
republics they are under the jurisdiction of the republican

goskomtrud as wel l

as the local labor organ and in some republics (Latvia and Tadzhikistan) th e
placement bureaus are directly under the jurisdiction of the republican
goskomtrud.1

This system dates from late 1976 when the formerly separate republica n
systems, whose activities were supposedly coordinated by a department of th e
State Planning Commission, were brought under the USSR Goskomtrud, whose nam e
was at the same time changed from State Committee for Labor and Wages to Stat e
Committee for Labor and Social Problems . Because the systems were initiall y
set up independently by the fifteen republics, there still remain variation s
in organization . 2

Some steps at unification have been made and economist s

generally seem to think more uniformity is in order .

The initiation of the labor bureaus seems to have been rather casual . I n
a lengthy 1966 decree on improving labor productivity, it was indicated tha t
it would be expedient for the republics to establish State Committees for th e
Utilization of Labor Resources and local labor organs . It is not clear whethe r
the intent was to alleviate the problem of relocating workers expected to b e
discharged as a result of the 1965 economic reforms, to cope with labor short ages, or simply to facilitate reallocation of labor as needs changed in a
situation of full employment . 3

In any case, as labor in fact became scarcer ,

the labor bureaucracy has been concerned primarily with easing the shortage .
The purpose of the labor organs as spelled out in the 1966 USSR legislatio n
authorizing their establishment was to improve the allocation and utilizatio n
of labor . This includes : working out with ministries and enterprises measure s
for the retraining and reallocation of wage earners between enterprises, branche s
and regions in accord with the needs of production ; job placement and provisio n
to the public of information on the needs for workers by enterprises ; study o f
the composition of the working age population not employed in the social sector ;
working out with planning and economic agencies recommendations for the rational

use of labor ; conducting organized recruitment of wage earners and resettle ment of families ; and oversight (kontrol') of the fulfillment by economic agencie s
of the necessary working and living conditions for the workers placed an d
families transferred .

(Normativnye akty . . ., 1972, p . 23) . The 1976 legisla-

tion gave the labor organs additional functions in the area of regulating th e
conditions and organization of labor and in overseeing the use of labor withi n
the enterprise . The latter power was further increased in a 1978 decree . 4
In broad terms, one can distinguish three functions of the labor bureaucracy . The first is job placement -- assisting individuals to find jobs t o
their taste and ability and assisting enterprises in filling their needs fo r
labor . Secondly, there is a range of functions related to collecting an d
analyzing data on the labor situation, and planning . Thirdly, there is th e
function of overseeing the use of labor within the enterprise . All function s
are intended to help in improving the efficiency with which labor is used . I t
should be mentioned that the labor organs are advisory organs .
This study focuses on the labor organs and placement bureaus and thei r
role in improving the allocation of labor and labor productivity . To kee p
their role in perspective, the various other efforts at improving the utiliza tion of labor are covered, though only briefly where the labor bureaucrac y
has little or no role .
I approach this topic with some questions in mind about the basic direction of the Soviet economic system . Emily Clark Brown, writing of development s
of the placement service through 1972, suggested that "general policy was stil l
not decided as to whether these agencies were to become instruments of contro l
as well as planning in the interest of more rational utilization of the labor

force or whether they were to emphasize voluntarism in a free labor marke t

under the influence of rationally planned incentives and aids ." (Brown, 1974 ,
p . 189) . Murray Feshbach, writing in 1974, anticipated, correctly, that th e
then existing separate republican nets of labor organs would be coordinate d
by a USSR state committee of ministerial rank . He suggested also that th e
machinery was' already in place which would permit further restrictions on th e
freedom of movement of Soviet manpower . (Feshbach, 1974, p .33 .) And Josep h
Berliner has suggested that a"reactionary model" which succeeded in tightenin g
labor discipline and in massively reallocating labor among jobs might be mor e
successful in the medium term than a reformed model of the market socialis m
type . (Berliner, 1983, pp . 369-71 . )
I hope to throw light on two questions . First, has the job placemen t
service tended to improve the functioning of a relatively free market fo r
labor or has it, instead, tended to replace the market with increased administration of manpower and decreased individual freedom of choice of job? Second ,
do the activities of the labor organs, particularly their oversight of the us e
of labor in the enterprises, tend to enhance or restrict the effects of th e
attempted improvement in the economic mechanism with its emphasis on improvin g
incentives for economizing on labor ?
To anticipate broadly my conclusions, it appears that the placement ser vice has not infringed on the freedom of individuals to choose their place o f
work nor on the freedom of enterprises to hire whom they choose, but that som e
of the activities of the labor organs have been such as to increase the degre e
of administrative intervention in the operation of enterprises in the effort ,
above all, to squeeze out hidden reserves of labor .

Section II of this report will deal with the nature and causes of th e
labor shortage . Section III will survey the major policies undertaken t o
help to alleviate the labor shortage and reduce the waste of labor . Sectio n
IV will deal with the job placement service and other activities of the labo r
bureaucracy intended to improve the allocation of labor . Section V will cove r
the activities of the labor organs in overseeing the use of labor at the enter prise level . Conclusions are presented in Section VI .

II . THE NATURE AND CAUSES OF THE LABOR SHORTAG E

It will be understood when we speak of a labor shortage that this is i n
relation to ambitious goals of a centrally planned economy and an econom y
which also places a high priority on full employment and in relation to th e
low level of efficiency of labor use by Soviet enterprises . It is nevertheles s
true that the Soviet economy has been experiencing an increasingly serious labo r
problem, a problem which is becoming more acute in the 1980's and 1990's a s
the labor supply is growing much less rapidly than in earlier years . This i s
a serious threat to the maintenance of the rates of growth to which the econom y
had become accustomed . It also makes more serious the problems of misallocate d
labor and more difficult (though more urgent) the adaptation of the allocatio n
of labor to technological change and to changes in the geographic location o f
major sources of raw materials .
The available quantitative data on the extent of the labor shortage suggest the overall shortage has been rather small . Soviet authors estimate th e
excess demand for labor as the gap between the sum of the plans of enterprise s
for labor and Gosplan's plan for labor (wage earners and salaried workers) .
Thus, for 1971, enterprises' plans for labor totaled 94 .1 million and Gosplan

planned 92 .7 million . The gap of 1 .4 million was 1 .5 percent of the actua l

1971 total of 92 .8 million wage earners and salaried workers . The gap wa s
2 .5 million persons or 2 .4 percent in 1975, 1 .9 million or 1 .8 percent i n
1976, and "over" 2 million in 1977 and 1978 (over 1 .9 percent and 1 .8 percen t
respectively) . 5

Murray Feshbach reports 2 million vacancies in industry i n

1981, which would be 5 .4 percent of the industrial labor force . 6

It is no t

known whether this is based on similar calculations and it is not clea r

whether this indicates an increase in the relative as well as absolute siz e
of the shortage or a greater shortage in industry than in some other branches .
If the "gap" figures provide a reasonably close estimate of the overall shortag e
of labor for state enterprises and state farms, the real problem, at leas t
through the 1970's, appears to be misallocation, with surpluses in some enter prises, branches and regions and shortages in others . Estimates of the interna l
reserves of labor -- i .e ., workers employed in excess of the number required t o
perform the work of the enterprise -- range from 5 percent to 20 percent o f
industrial employment and up to 35 percent of the labor force in construction .
Even a comparatively small utilization of these reserves might be adequate t o
cover the "gap" in the early 1980's . 8

But the sharp decline in the rate o f

growth in the labor force which has now begun will no doubt increase the over all deficit .
In agriculture (apparently state and collective farms), the overall man power shortage is claimed to be higher ; a 1982 source says that, given th e
present material and technical base, the shortage is approximately 10 percen t
and during the periods of intense work it doubles and in some places eve n
triples . 9

Besides sharp seasonal fluctuations, there are wide regional dif-

ferences with surplus labor in many farms of Central Asia and shortages i n
some of the European parts of the RSFSR and Siberia .

A major set of causes of the labor shortage is demographic . The postwa r

baby boom generation is already in the labor force and the number enterin g
working age has dropped sharply . At the same time, the number reaching pensio n
age and (probably) retiring has risen sharply . According to Gosplan, whil e
11 million young people took their first jobs during the tenth Five Year Pla n
(1976-80), only 4 million will enter the labor force during the eleventh Fiv e
Year Plan (1981-86) ; and 11 million people retired during the tenth plan perio d
but 14 million will retire during the eleventh . 10

Given the already very hig h

rate of participation in the labor force by women as well as men, almost al l

increments to the labor force must come from persons reaching working age an d
from those staying on after retirement age (55 for women, 60 for men) .
A decline in the birthrate has been an important factor . This is usuall y
attributed to the high participation of women in the labor force and t o
cramped housing space . It is far more pronounced in the European part o f
the USSR but even in Central Asia the birth rate has been falling .
There are also severe regional imbalances in the labor supply in relatio n
to the areas where labor is most needed . The working age population will b e
decreasing in the RSFSR and the Ukraine during the period 1980-95 and almos t
all the increase in working age population will be in the Central Asian republics, Kazakhstan and the Transcaucasus .

11

This population, however, is no t

readily available for filling the needed jobs . There is a high reluctance amon g
the native populations to leave the village even for work in towns in their ow n
republics .

And the need is for workers to make up for the decline in workin g

age population in much of the developed European parts of the RSFSR as wel l
as in the Far North, Siberia, and the Far East where industry is to expan d
and new raw materials are to be extracted .

- 8-

Deficiencies in planning for labor, including planning of education i n

relation to the needs of the economy, contribute to the problems of misallocation of labor . Labor balances have apparently been calculated on a rathe r
aggregated basis, at least until recently . According to one Western analyst ,
"Nowhere, however, do the analysts actually look at a city and try to estimat e
how many unfilled jobs currently exist ." (Chinn, 1977, p . 74) . More recently ,
A . F . Ul'ianov, the head of the USSR Central Statistical Administration ,
reports that the first labor balances for all cities were drawn up on th e
basis of the 1979 census, and that annual balances at the city level will b e
drawn up only for those cities which are oblast (krai, autonomous republic )
centers .

(Vestnik statistiki,

1980, no . 9, p . 57 .) As Antosenkov, the hea d

of the Administration for Labor Resources of the USSR Goskomtrud, points out ,
in the traditional ways of determining the location of investment projects ,
little attention is paid to the question of the availability of labor .

(Trud ,

12 November 1981, p . 2 . )
Part of the problem is the very large proportion of the labor force whic h
is still engaged in manual labor . This stems from the policy of concentratin g
investment in the main production processes while relying on manual labor fo r
auxiliary processes, such as materials handling, packing, loading, etc ., an d
the large number engaged in machinery repairs . 12

This grows as the machin e

stock grows and ages . This policy was appropriate earlier when there was a n
ample supply of unskilled labor but is certainly not at a time when labor i s
not only relatively much scarcer but is also much better educated . The youn g
entrants to the labor force have only disdain for these jobs, which are bein g
vacated by their less-educated parents and-grandparents . This is an importan t
cause of labor turnover, also .

- 9-

A further piece of the problem is the extensive practice of using non agricultural workers in farm and produce warehouse work (and also to work o n
roads, build' kindergartens, participate in parades, etc .) to make up fo r
shortages of labor and machinery in agriculture . Perevedentsev, the demographer, estimates that the equivalent of 14 million workers on an annual basi s
are sent into agriculture (CDSP XXXV-8, p . 5) ; this amounts to almost 14 per cent of the non-agricultural labor force! While formerly these outside worker s
were drawn into agriculture only during the peak season of harvesting and procurement of agricultural products, in many places it now takes place throughou t
the year . 13

Frequently, permanent relations are established between an indus -

trial enterprise and a farm for the enterprise to provide mechanics and othe r
14
skilled workers to the farm on a year-round basis .
By no means least of the causes of misallocation and waste of labor i s
the well known tendency for enterprise management to hoard labor, a basic faul t
of the economic system . This means some enterprises have more labor than the y
need while others have too little and makes it especially difficult to staf f
new enterprises . Taut planning and the consequent unreliability of the timel y
receipt of supplies of inputs combined with emphasis on rewarding managemen t
for fulfilling output targets makes it safer to have extra labor . This i s
aggravated by the need to supply workers to help bring in the harvest . Furthermore, managerial salary levels depend in part on some measure of the siz e
of the enterprise, which often includes the number of workers .

The sof tbudge

constraint means management is unlikely to suffer financially for th expnditur

on extra labor ; i .e ., superior authorities will do what is necessary (e .g . pro vide a subsidy) to keep the enterprise in operation . 15

An enterprise having a n

abundance of labor probably feels little pressure to use it more effectively .

10

Beyond this, the regim e ' s commitment to full employment has bee niterpd
as a guarantee that one can keep one's specific job . This has meant restrictio n
on the right of management to fire workers other than for gross misdeamors an d
even then the trade union committee must agree . The expectation that enterpris e
management will find a new job for anyone fired apparently still prevails eve n
though this responsibility was formally placed on the relevant ministry i n
1957 16 and even since the establishment of the job placement bureaus .
There is also reportedly much counterproductive behavior on the part o f
the workers, including high turnover, frequent absenteeism, drinking at work ,
a general lack of sense of responsibility, and little sense that cheating o r
stealing from a state enterprise is unethical . 17

Some of this stems from lo w

morale related to poor working conditions, shortages of consumer goods, an d

a recent decline in the rate of growth of real incomes . Some of the absenteeism--absences often with permission of management--is related to difficulties in shopping and to the fact that many necessary service establishment s
are open only during regular working hours . Problems with services are
especially important for those in the prime working ages (30-49) who hav e
more family responsibilities than younger persons (who haven't yet had children and live with their parents) and those over 50 . 18

For rural residents, i n

addition, the use of many services requires a bus trip to town . One stud y
estimated that extending service hours and bringing more services to the
village would save the equivalent of 40,000 workers a year for the farms o f
the labor-deficit Non-Black-Earth Zone . 19

11

III . POLICIES TO ALLEVIATE THE LABOR SHORTAG E

An immense effort and a wide . variety of measures have been adopted i n

the effort to alleviate, if not solve, the labor problems . These range fro m
pro-natalist measures through changes in incentives for workers and managers ,
the establishment of a labor bureaucracy, to the improvement in instructio n
in the Russian language to make more mobile and better workers (and soldiers )
of young Uzbeks and other Central Asians . Broadly, the measures can b e
divided into those designed to increase the labor supply and those designed t o
make more effective use of labor . Under current conditions, the latter ar e
much more important than the former .

Efforts to Increase the Size of the Labor Forc e

Efforts to increase the size of the labor force include pro-natalis t
measures aimed at increasing the future labor force and attempts to increas e
the participation rate . The labor organs have a direct responsibility in th e
20
latter . I have seen little to indicate they play any role in the former .
To induce an increase in the birth rate to permit an increase in th e
size of the future labor force, a number of pro-natalist measures have bee n
taken . Some, such as increased child care facilities, are intended to mak e
it easier for a woman to combine motherhood and work . The introduction o f
child allowances in 1974 for each child to the age of eight in families wher e
the per capita income was under 50 rubles may have been intended as a pro-nata l
measure ; but it may have been more of a measure to set a floor under famil y
income . In any case, it is widely believed that such child allowances hav e
gone mainly to families with many children in Central Asia, where the birt h
rate does not need any stimulus . The 1983 Plan, however, provides for chil d
allowances for families with a per capita income below 75 rubles a month in th e
Far East, Siberia and the Far North . (CDSP, XXXIV, no . 47, p . 14 .)

12

The most significant measures have been first, the provision, be g innin g
in 1968, of the right for a working woman to take unpaid leave (after the en d
of the 112 day paid maternity leave period) until the child reaches the age o f
r
one ; and secondly, the adoption of paid leave for child care . Paid leave fo
the period until the child reaches one year with the right to take an additiona l
six months of unpaid leave was introduced during 1981-1983 . The payment is 5 0
rubles a month in the Far East, Siberia and the Far North and 35 rubles in othe r
areas . At the same time, a lump-sum payment was introduced for the birth o f
the first (50 rubles), second, and third children (100 rubles) . 21

Formerly ,

lump sum payments were provided only for the fourth and subsequent births ; thi s
was of little use in the European part of the USSR where the single child famil y
is more or less standard . Women who have raised five or more children to ag e
eight are given special consideration under the pension laws and it has bee n
made easier for working mothers to take leave to care for sick children . 22

new inducement for young couples to have children and also to stay at thei r
place of work is the provision of interest free loans at the time of the birt h
of the first child for the purchase of a house or furniture, etc ., provide d
one of the parents has been at the same job at least two years . Further, some
of the debt is excused if they have a second child, and more is excused for

3
third child . 2
A successful pro-natalist policy will, of course, mean some decrease i n
the size of the current labor force . It is too early to tell how many Sovie t
women will take advantage of the new paid child care provision . 24

It is to b e

noted that the Soviet measures, particularly the provisions for leave (firs t
unpaid, now paid) from the job, have been designed to encourage women t o
maintain their connection to the labor force . A woman does not leave the

13

labor force to have a baby but takes leave for a definite period from a particular job, to which she has the right to return . Furthermore, her perio d
of leave for child care counts toward her length of employment record (bot h
total and in the given job), which is important in determini n g pension rights
and sometimes bonus size and salary increments .
It is not clear that these measures have had any effect on the birthrat e
though it is possible they have contributed to a slowing of the decline i n
fertility .
The other main direction in trying to increase the size of the labo r
force is a series of measures since the early 1960s aimed at increasing participation rates among women, pensioners and any others who may not be in th e
paid labor force . Some measures which might be classified as pro-natal, suc h
as provisions of child care facilities, also fall in this category in tha t
they are intended to make it easier for mothers to work . Participation rate s
are, as is well known, already so high that there are very few persons no t
already in the labor force ; those outside are mainly mothers of large familie s
in Central Asia and pensioners . According to census data, the number o f
persons at work (including adults in full time study) were 82 percent of th e
25
working age population in 1959, 92 percent in 1970 and 94 percent in 1979 .
In part because of this, major efforts are being made to increase th e
amount of part-time work among housewives, pensioners and students . Th e
labor organs are charged to seek out such persons, to give them information about opportunities for work, to encourage them to work and to plac e
them in suitable jobs . The Social Security System also plays a role i n
finding su table work for old-age pensioners and invalids . Enterprises are
i

14

urged to make provisions for part-time work and to provide special facilitie s
for older people and invalids capable of working . (There are quotas for enter prises as to the number of young people and, at least in some cases, invalid s
they are required to hire . )
The number of complaints about the lack of provision of part-time an d
take-home work suggests that this campaign has not gotten very far . By 1977 ,
it is reported that in the RSFSR there were about 260,000 employees in par t
time work but this was only 0 .4 percent of the total number employed in th e
republic . 26

Counting all "new organizational forms of employment," it wa s

estimated that in the RSFSR in 1977 over 5 million people, or an equivalen t

of over one million full time workers, were brought into the labor force . O f
the time worked, 55 percent was accounted for by persons taking a second job ,
26 percent by labor semesters worked by school students, 13 percent by part 27
time work and 6 percent by work at home .
The student semesters here apparently refer to summer work performed b y
children in the upper grades of the vocational technical schools and th e
general secondary schools . Usually, it is believed, this is related to thei r
vocational training . While large numbers are involved, the value of thei r
work probably lies more in the work experience than in what they actuall y
produce . 28

The summer student detachments (studencheskie otriady) made up o f

groups of students of the specialized secondary schools, universities, an d

institutes apparently provide a more important contribution . These work fo r
two months during the summer in groups of 50 to 60 students on a contrac t
with an enterprise or construction site . Their travel expenses are paid ,
they are paid wages, which are not subject to income tax, and receive thei r
student stipend also . 29

The number participating increased from 40,000 i n

1965 to 761 .4 thousand in 1978 . 30

Antosenko reports that there is great

15

enthusiasm for these summer work experiences, often in Siberia, which provid e
adventure, a chance to travel, and, for most, the first occasion to be awa y
31
from home with a group of peers .
Summer work, particularly among older students, does appear to make som e
contribution . As for part time work during the school year, I am told tha t
after school and weekend work is very rare among Soviet young people . 32

Mos t

work by students is in groups and there have been complaints about the lac k
33
of opportunities for individual school children to work .
Considerable efforts to induce pension-age persons to remain at work o r
to return to work have been made and with a certain amount of success . Th e
retirement age--55 for women and 60 for men, and five years earlier in som e
arduous occupations and locations--is low by international standards . It i s
unlikely that the retirement age will be raised for political reasons, considering that it was introduced shortly after the Revolution and is embodie d
in the constitution . The major inducement for pensioners to work has bee n
a provision, beginning in 1964, allowing a pensioner to receive wages and th e
pension . Initially, this right applied to a rather narrow group of occupation s
and regions but the number eligible has been expanding . Currently, provision s
are that for specified occupations, sectors and regions a person may receiv e
one-quarter, one-half

or 100 percent of his pension as well as earnings fro m

the job, with a ceiling for most of 300 rubles a month for the combined income .
Since 1980, persons reaching pension age have the option to continue workin g
34
without receiving pension in return fora larger pension on actual retirement .
As Table 1 shows, the percentage of pensioners at work has risen fro m
12 .5 percent in 1965, just after the first of these measures was introduced ,
to over 30 percent in 1981 .

35

16

TABLE 1
Working Pensioners as a Percent of Tota l
Old-Age Pensioners, USSR

Year

1960 - 198 1

Percent of Tota l

1960

11 . 7

1962

9.2

1965

12 . 5

1970

19 . 0

1975

24 . 2

1979

27 . 8

1981

30 . 6

Source : Stephen Sternheimer, "The Graying of the Sovie t

Union," Problems of Communism, Sept .-Oct ., 1982 ,
p . 83 .

17

Sociological studies have been carried out to determine the number o f

pensioners who would like to return to work, the number who would work ful l
time, those wanting part-time or home work, etc . It is apparently believe d
that there is still potential for bringing more retired people back and prob ably a greater potential for keeping persons in the labor force for a whil e
after they reach pension age .
There is some effort also to see that young people enter the labor forc e
without delay . It is reported that young people, particularly those aged 1 6
36
to 19, don't start work after finishing chool for an average of six months .
The participatio n .

rate of young persons has over time decreased as the leve l

of education has increased . In recent years, however, there has been a

decline in the proportion of graduates of secondary school who are admitte d
to higher education . While there has been some decline in the proportion o f
school graduates seeking admission to universities, the competition to ge t
into higher education continues and there are frequent complaints of the tim e
lost in taking exams and seeking admittance . Now, at least in some locations ,
the placement bureaus send representatives to the universities at exam time t o
try to get those who have failed the entrance exams to sign up for work . 37

1980 regulation requires that students of vocational-technical schools b e

assigned to jobs in advance of graduation for a two-year period . The previou s
assignment system was less formal . 38

This may be aimed at reducing the tim e

before a graduate takes a job . Knowing ahead what work he will be doing ma y
also induce the student to pay more attention to his studies .

18

Efforts to Improve . the Utilization of Labo r

Improvement in the effectiveness with which labor is used will almos t
certainly be the main solution to the labor problem . It seems to be agree d
that it will prove much easier to mobilize "surplus" labor currently employe d
to redeploy it elsewhere than to attract those still unemployed into usefu l
work . 39

There are many aspects to this approach and we shall briefly trea t

the major ones .

Planning .

Labor productivity, labor use and labor allocation are al l

being taken more seriously in planning . The policy has been adopted o f
restricting the building of new enterprises in favor of the expansion an d
modernization of existing enterprises, especially in developed areas wher e
most of the increase in output must come from increased productivity . Whil e
exhortations to reduce the use of manual labor and to mechanize productiv e
processes, particularly in auxiliary work, have been made for decades withou t
much success, reduction of manual labor is to become one of the key targete d
economic programs, apparently, in the plan for 1986-90 . 4 0
Improvement in planning the use of labor is frequently mentioned . Thi s
is hardly new . What is new is that the labor bureaucracy described in Sectio n
I above means that there are now bodies whose duty it is to see that the avail ability of labor is taken into account in investment and location decisions .
Labor balances of supply and requirements are to be drawn up for the five yea r
plan and annually for republics, krais, oblasts, raions and major cities an d
these are to be disaggregated by sex, sector, and skill . As mentioned above ,
the first labor balances at oblast and major city levels were based on the 197 9
census . The national and republican state labor committees and the local labo r
organs are to play a more important role in this planning . 41 All enterprises are

19

now required to submit their plans for labor requirements (beginning in 1980 )
and their entire annual plans (on the basis of a March 1981 decree) to loca l
Soviets for review, prior to forwarding them to their ministries . The loca l
Soviets are to review all matters concerning manpower and to confirm change s
that affect labor requirements . 42

In the RSFSR and some other republics, th e

labor organs participate in republican and local interdepartmental commission s

for the siting of enterprises and screen proposals of ministries and depart ments concerning the location of new and expanding enterprises . 43

Local labo r

organs also concern themselves with related questions, e .g ., whether there are
adequate training facilities of the kind needed .
Policies Toward Large Wasteful Practices .

The campaign to reduce th e

use of manual labor has been referred to above . Given that some 40 percen t
of industrial workers are still employed in manual labor, it is clear tha t
mechanization of much of the work, particularly in auxiliary processes, woul d
be a major source of additional labor if carried out . This depends in larg e
part on the production of the necessary machinery, as well as on inducement s
for enterprise management (and perhaps also planners) to make the necessar y
investments in auxiliary rather than main processes .
A sharp reduction in the use of non-agricultural labor on the farms an d
abolition of other kinds of demands on the enterprise labor force for wor k
unrelated to the business of the enterprise is advocated by a number of economists . 44

The extent of this practice was indicated above (Section II) .- Th e

point is made that use of industrial labor, research scientists, etc . in agricultural labor is inefficient for agriculture as well as for the industria l
enterprises, research institutes, etc . Those with this view advocate limitin g
the use of off-farm labor for farming to those in the agro-industrial complexe s
in rural areas (which would also permit adapting the scheduling of work in the

20

food processing industries and other rural industrial-type enterprises to th e

schedule of farm peak needs) and to paid volunteers . The latter might b e
housewives, pensioners, students on vacation, and other vacationers . 46

Wha t

the actual possibilities are for reducing this use of non-farm labor is no t
yet clear, nor is the policy regarding this . Reports from some localitie s
proudly claim to have greatly reduced or eliminated the need to rely on cit y
workers for farm work . 46

But other cities exhibit a pride in the amount o f

help they provide the farms of their region . 4 7

Efforts to Improve the Utilization of Labor at the Enterprise Level .

Given the soft budget constraint and the tendency of enterprise management t o
hoard labor and to use it wastefully, mentioned above, it is perhaps at th e
enterprise level that is to be found the most important potential source o f
improved labor utilization . Clearly, if the use and allocation of labor is t o
be responsive to changes in cost and demand, it is essential that managemen t
has effective incentives to economize on labor and an incentive to, and the rea l
possibility of, releasi g redundant workers .
The major set of policies relates to the improvement of the economi c
mechanism and, in particular, to changes in the incentive provisions to try t o
induce management to use labor more effectively and economically . As will b e
seen below, administrative measures are also used . The spirit of the economi c
reforms of 1965 was to increase management ' s interest in profits and this shoul d
have included increasing the incentives to economize on labor costs . The incentives embodied in the initial reformed rules for determination of the bonus fun d
were somewhat flawed from this point of view4 8 but over time, labor productivit y
became increasingly important . It was one of the main success indicators o n
which the bonus fund depended in the rules established for 1971-75 . The emphasis

21

on improvements in labor productivity increased so that it became one of th e

two major determinants of the bonus fund in the instructions for the perio d
1976-80 and in the instructions for 1981-85 it was compulsory, with few excep tions, for the ministries to use labor productivity as one of the two determinants . (The rules for the formation of the bonus fund are summarized i n
Appendix B .) The bonus-forming rules are complex and it is not clear that the y
are well understood by management generally . But the point here is that labo r
productivity received increased emphasis . 4 9
There are also some penalities (disincentives) for excessive use of labor .
The bonus for top management may be reduced for exceeding the planned wag e
bill . And there is a provision that the wage fund will be reduced (by one half of the amount by which the planned wage fund is exceeded) in the even t
the enterprise achieves an increase in output with above-limit labor an d
without fulfilling the labor productivity target .

50

The major current policy is the introduction, mandated by the July 197 9
legislation, of a procedure for calculating the wage fund on the basis of norm s
for wages per ruble of output . This in essence amounts to the universa l
adoption of a modified Shchekino experiment . This experiment was adopted i n
1967 at the Shchekino Nitrogen Association under the Ministry of the Chemica l
Industry near Tula . The objective of the experiment was to provide the enter prise or association with incentives to reduce personnel and to encourage jo b
enlargement and combination of jobs . The enterprise was guaranteed the sam e
wage fund for a three-year period and any savings in the wage fund achieve d
through the reduction in the number employed would be retained by the enter prise . Half of the savings could be used to increase the wages of thos e
remaining and taking on the extra work of those who left . In the Shchekino

22

case, the number employed was significantly reduced and output, productivity ,
and wages rose .
A number of enterprises adopted this experiment, or variations on it (100 0
enterprises by 1977), but there were several difficulties which slowed th e
growth of the movement . One difficulty is that the experiment penalized enter prises which were already efficient, or which managed to reduce their wor k
force significantly as they then became more dependent on technological innovation to meet output targets . Other difficulties relate to administrativ e
interference with what was supposed to have been management's freedom to operat e
the experiment . Frequent complaints were made that the savings in the wag e
fund were not left to the enterprise and/or that once the wage fund wa s
reduced, administrative continuance to use the ratchet principle meant tha t
the smaller wage fund formed the basis of the plan for wages in the next period .
Another complaint was that the legislation governing the experiment started of f
by saying any enterprise was free to adopt the system but then went on t o
require permission for each element of the experiment and involved an enormou s
amount of red tape . In a review of the experiment after ten years, significan t
achievements were reported but it was pointed out also that difficulties wer e
being experienced as a result of changing rules and all kinds of conflict s
between operating on economic incentives and detailed planning . Similar com 51
plaints were still being made in 1982 .
The system mandated in the July 1979 legislation provides for calculatin g
the wage fund on the basis of technically substantiated norms for wages pe r
ruble of output . The norms are to be calculated in such a way as to ensur e
that labor productivity increases faster than earnings ; apparently this mean s
the norms are to decline over time . 52

The norms are to be set in advance for

23

several years . Once the norm for rubles of wages per ruble of output i s
established, the wage fund is determined by the enterprise management whe n
the output target is set .
Savings in the wage fund may be used to pay supplements of up to 50 per cent of regular wages to workers who take on an additional function, tend mor e
machines, or otherwise raise productivity ; raise rates of pay for especiall y
skilled workers ; give bonuses of up to 30 percent of salary for manageria l
employees, including foremen, responsible for improving productivity ; and pa y
a one-time bonus to workers who voluntarily agree to a tightening of thei r
work norm . Any excess left in the wage fund at the end of the year is transferred to the enterprise bonus fund .
In addition to providing a direct incentive to economize on labor b y
allowing the enterprise to keep any savings in the wage fund, it is argued tha t
having the norms set in advance for five years will eliminate the planning o f
next year's wage fund on the basis of the "achieved level ."

53

This clearly resembles the Shchekino system . However, the ministries are t o
be closely involved in determining the technically substantiated norms .and thi s
may mean that this system leaves less leeway for managerial initiative than th e
original Shchekino system . In practice it has turned out to be very difficul t
to work out appropriate technically substantiated norms . This explains th e
slower than expected progress in introducing the system universally . 54

The norms

had been established for 18 ministries by the end of 1981 and were planned to b e
5
established for the overwhelming majority of industries by the end of 1985 . 5
The system is predicated upon the possibility of achieving savings in th e
wage fund by releasing redundant workers . As indicated above, there have bee n
restrictions--first legal, then de facto--on the manager's right to fire a
worker without finding him an alternative job . In the original Shchekino case ,
most of those released in the early years of the experiment were transferred to

24

other plants in the Association . Beyond this, the provincial Tula Part y
Committee pushed the experiment, extended it to most other local enterprise s
and, most importantly, took charge of the redistribution of workers among th e
different ministries . 56

The development of the employment service should mak e

it possible to relieve management of the responsibility of finding jobs fo r

redundant workers ; as will be seen in Section IV, it is not clear to wha t
extent this possibility has been exploited .
A further incentive to economize on labor is the rise in 1982 in th e
social insurance tax rates, which makes labor more expensive . In industry ,
the old rates ranged from 4 .7 percent to 9 .0 percent of the wage fund whil e
the new rate for the main branches of industry is 14 percent . 5 7
Along with incentives intended to make managers economize on labor t o
their own benefit, a number of administrative measures have been applied .
Efforts of this kind to squeeze out excess labor seem to have intensified i n
recent years, following the USSR Goskomtrud instructions on state oversigh t
of the utilization of labor of 12 September 1978, 58 the 12 July 1979 decre e
on the improvement of planning , 59 and the December 1979 decree on strengthenin g
labor discipline.60 Beginning in 1980, ceilings or limits are set on th e
number of employees an enterprise can have . While previously each enterpris e
had a plan for labor, the new limits and conformity to them appear to b e
taken more seriously . Similar limits are set for each ministry, department an d
republic since 1982 .
Each enterprise also now has a ta r g et for the reduction of manual labo r
in its plan . Ministries may make this one of the indicators for determinin g
the size of the bonus fund .

61

25

There is also considerable pressure for enterprises to organize their labo r

force and work routines into the brigade system . (This will be described belo w
under measures directed at workers .) This system is intended to be in effec t
by 1985 . It is not clear whether it is compulsory but enterprises do have t o
report on the number of brigades, the number of workers in them, the types o f
62
brigades, and the forms of payment of the workers in a brigade .
A section on "social development" covering services--housing, other facilities, training programs, etc .--for workers is now required to be include d
63
in enterprise plans .
It should be mentioned here--and will be explored further below--that th e
labor organs have considerable oversight duties with respect to the use o f
labor within the firm .
Measures Directed at Workers .

Both carrots and sticks are employed i n

the effort to induce labor to take jobs where labor is needed, to stay wit h
the job, and to work well . During the Second World War, there were sever e
restrictions on mobility of labor and severe punishments for quitting o r
being absent from a job but since these regulations were repealed in th e
mid-1950 ' s, 64 there has been more use of the carrot than of the stick . I n
the past few years, however, we note legislation intended to strengthen discipline and the discipline campaign of Andropov .
The differential wage system has been used (both before and since the war )
as the primary mechanism in the attempt to achieve the desired allocation o f
labor between occupations, branches and regions of the country and as a mean s
of stimulating people to acquire additional skills and to work well and hard .
Except for the compulsory placement in their first job of graduates of daytim e
vocational-technical schools, specialized secondary schools and institution s
of higher education, individuals are free to seek out and choose jobs they

26

are capable of performing . The basic wage and salary rates, including supple ments for conditions of work and regional variations in living conditions, ar e
set centrally, as are general rules for determining the basis for payment o f
bonuses or other incentive pay .
Two reforms of the wage system have been carried out during the postwa r
years, one from 1956 to 1965 and the second from 1968 to 1979 .6 5 Such reforms
are intended to take into account changes in demand and supply conditions . I t
can be imagined that centralized setting of all wage rates for all occupation s
must sometimes be crude . Furthermore, the length of time it takes to procee d
through a reform66 suggests that the wage structure may be outdated before th e
reform is completed . These problems are at least partially offset by som e
allowance for variations in the wage structure at the enterprise level in suc h
matters as classifying workers by grade level, in setting piece rates an d
determining the details of norms for receiving bonuses . Beyond this, the cente r
at times responds to an acute shortage of a particular type of worker by raisin g
wage rates for that group . The wage reforms were accompanied by a policy o f
stiffening labor norms and pressure to bring labor norms loser to technologica l
potential .
One major concern is that of improving incentives for increasing productivity by making compensation reflect more precisely differences in performanc e
and results among different workers . While this is nothing new, it appears t o
have been receiving more attention in recent years and very likely this stem s
from the considerable narrowing of earnings differentials which has resulte d
from the wage reforms . These included a substantial increase in the minimu m
wage and very limited increases in upper level salaries . 67

The establishe d

rules for bonus and other forms of incentive payment are intended to reflec t
differences in productivity but apparently egalitarian attitudes among workers

27

often mean managers find it less troubTesome to make equal awards than t o
single out the best and poorest workers in a shop and to reward them differentially . In addition to constant exhortations that payment should rewar d
individual performance and against egalitarianism, some measures have bee n
introduced permitting managers more leeway in differentiating rewards to fi t
performance . For instance, persons who master a second occupation or wh o
expand their sphere of work (tend more machines, serve more tables) may b e
paid at a higher rate . Enterprise management may now raise the salary rate s
of engineers and other specialists whose qualifications are above the norm .
The new rules concerning setting the wage bill according to norms for wage s
per ruble of output include a provision that any savings in the wage bill ca n
be used for making rewards on the basis of performance .
Another concern of recent years has been the adequacy of regional wag e
coefficients . The policy has been to make these more uniform for differen t
kinds of workers in the same region as a means of reducing turnover within th e
region . It has been found also that the very high wages in the Far North an d
similar areas are sometimes counterproductive in the sense that they attrac t
workers to sign up for one three-year turn in the Far North to make a pil e
and then return to the Center to buy an apartment or car . 68

Thus, supplement s

for length of service in the area are being stressed over increases in th e
regional coefficients .
A reorganization of labor at the lowest level into economically account able "brigades" is currently being pushed and is intended to become the mai n
form of organization of labor by the end of the current plan . 69

The essentia l

notion is that a group of workers will undertake responsibility for the completion of a certain task by a certain time for a certain payment . They apparentl y
have considerable freedom to organize the work in the way they think best . And

28

the brigade decides how the income is divided among themselves, taking int o
account, of course, the wage grade of each worker as well as the hours put i n
and the contribution to results of each . Savings of labor or materials effecte d
by the brigade become income they can divide . The intent is to create a greate r
sense of responsibility among the workers since their rewards will be closel y
related to their own performance . Presumably also peer pressure may restrai n
loafing . Claims of greatly increased productivity are frequently made of newl y
a

formed brigades . One problem, however, is that for successful operation

brigade must be provided the necessary materials on time if they are to b e

able to complete their contract on time . It is not clear that this could b e
done on a regular basis if all workers in the enterprise were in brigades .
Economic and sociological research on work and labor since the earl y
1960's has led to a more sophisticated attitude toward the proble m
of motivating workers . It has been found, for instance, that wages or eve n
living conditions are not always the prime reason for taking or leaving

job . Boredom has been recognized and there is an increased attention t o

attitudes about the possibilities for advancement, sense of satisfaction i n
work, and the compatability of the work group and supervisor . Some of th e
expressions of this understanding are evident in the requirement that enter prises have a section on social development in their plans .
The Soviet authorities are well aware that money wages and money wag e
differentials alone are not effective unless they can be used to purchas e
goods and services . They are clearly constrained in the extent to which mone y
wages can be allowed to rise by limits in the increase in the value of the out put of consumer goods and services . A grandiose "Food Program " has been

29

launched . 70

A "Comprehensive Program for Developing the Production of Consume r

Goods and .71

the Consumer-Service System" is to be part of the plan fo r1986-0
Some consumer goods prices have been increased and, while meat and bread price s
are still heavily subsidized, some hints have been given, by Andropov himself ,
that food prices might have to rise . 72

Greater attention is being paid to

improving living conditions in the areas where labor is most needed . Problem s
are often encountered here . One problem is that when the industrial ministry
in charge of opening a new enterprise in a remote location is also charged wit h
building housing, shops, schools, etc ., the social amenities are often subordinated to production needs . Some of these problems may be alleviated by th e
"tour of duty" system, first developed and widely used in the timber industry .
This involves constructing simple camps at the site of the work, where worker s
stay and work for a given tour of duty (e .g . ten days) and then return to a
city with better amenities and opportunities for education and employment fo r
their families for a ten-day period, then return to camp, etc .
There are a number of benefits of various kinds which may be applied t o
induce individuals to stay in a given job or, alternatively, to move to a
place they are needed more . Generally, the number of vacation days and th e
size of the old age pension are linked to the length of uninterrupted work .
Vacations are longer and the age of retirement is lower in arduous occupation s
and in areas with arduous living conditions . Recently, the number of vacatio n
days has been increased for continued years of employment in the same enter prise and the increment in the old-age pension for continuing to work afte r
pension age has been increased . 7 3
The shortage of housing has meant rights to housing can sometimes be use d
as strong incentives . Recently, it has been established that an enterprise,

30

with the consent of the union and labor collective, may provide nonrepayabl e
assistance for cooperative or individual housing to employees who have worke d
in the same enterprise for at least five years (two years for newlyweds) . 7 4
Persons moving to another locality through organized recruitment are suppose d
to be provided housing accommodation within 12 hours of arrival . 75

There i s

plenty of anecdotal evidence that such accommodation may often be extremel y

primitive . Expenses of moving and of settling in are paid for workers movin g
under organized recruitment and for families which are resettled through th e
organized system of resettlement . Loans for housing construction in rura l
areas are also used to influence regional migration . 76
Various other measures might be mentioned which should improve satisfaction with work . The drive to mechanize manual labor will, to the extent carried out, eliminate some of the nastiest jobs . Considerable attention i s
paid to young people first entering the labor force--or even before . It shoul d
be noted that turnover is highest among young people . Besides shorter hour s
and other privileges for young workers under 18, enterprises are urged t o
assign older workers as mentors for new, young workers, to help them adjus t
to their jobs . Increasing attention has been paid to vocational guidance i n
the schools and in the labor offices and employment bureaus . The instructio n
in Russian in the schools of Central Asia is to be improved . The placemen t
service, first established for graduates of the general schools and late r
extended to all (except those graduates who are assigned to their first jobs) ,
provides a mechanism for assisting individuals in finding suitable jobs . Thi s
will be covered in Section IV .

31

Workers are being promised greater participation in management, perhap s

in part as a response to the Polish Solidarity movement . 77

The July 197 9

Resolution "On Improving Planning and Strengthening the Economic Mechanism "
starts off by saying that the CPSU Central Committee and the USSR Council o f
Ministers "deem it necessary to implement a system of measures to further improv e
the planned management of the economy, to develop democratic principles in th e
management of production, and to enhance the creative initiative of labor collectives," and later directs party and government organs and enterprises t o
ensure the participation of the labor collectives in planning and in exercisin g
supervision over plan implementation . 78

This was followed by a new " Law o n

Labor Collectives and Enhancement of Their Role in the Management of Enter prises, Institutions and Organizations," passed on June 17, 1983 . This appear s
to strengthen the rights of the employees of an enterprise to make their view s
heard on matters concerning production, working conditions, use of the variou s
enterprise funds, etc . How much additional clout this gives the workers i s
not clear . It is stressed that this is still democratic centralism, and, i t
is to be noted, meetings of the collective are to be called jointly by manage ment and the trade union committee ; such meetings are to be held at least twic e
a year . It should also be noted that among the rights and duties of the collective are to "ensure the creation of an atmosphere of intolerance towar d
violators of discipline" and, when necessary, to point to violators of discipline and suggest the appropriate penalty . 7 9
Besides all kinds of positive incentives intended to improve morale an d
discipline at the work place, there has been a recent strengthening of disciplinary measures . With the abolition in 1956 of the penal liabilities for

32

workers for being absent, late or drunk on the job, the penalities that coul d
be imposed for violation of labor discipline were considerably weakened . Thus ,
administrative penalties which management could impose were a warning, a repri mand, a severe reprimand, or the transfer of the worker to a lower paid o r
less responsible job for a period of up to three months . For repeated absenteeism, the worker could be fired but only if the trade union committe e
approved . 80

All these actions would be entered in the worker's labor book, a

81
permanent record of his education and work experience .
The 1956 legislation provided that a worker could quit his job voluntaril y
on giving two weeks notice . Workers who did so without legally recognize d
valid reasons 82 lost their record of uninterrupted work . In 1960, the uninter83
rupted work record was maintained if a new job was taken within a month .
Recent legislation has extended the required notice time for a voluntary qui t
to one month (in December 1979), and to two months in August 1983 (one mont h
where there are valid reasons), and the uninterrupted work record is maintaine d
84
if the released worker is in another job within three weeks .
According to the Soviet constitution, it is the duty of able-bodied adult s
to perform socially useful labor and failure to do so is punishable . Anti parasite laws have been in effect since 1961 . 85

"Parasites" are able-bodie d

adults who refuse socially useful labor and/or who derive unearned income fro m
the exploitation of land plots, automobiles, houses, etc ., or from beggin g
and vagrancy . They include people who hold a job pro forma but whose mai n
income is derived in other ways . According to the 1961 RSFSR law, such per sons would be given a warning and, if they had not taken a job within th e
specified period, would be deported to specially designated locations for a
period of two to five years, where they were required to work and any illeg ally acquired income was confiscated . Persons who refused to work at their

33

place of exile were subject to corrective labor (mandatory work) at a te n

percent reduction in earnings and if they refused they could be deprived o f
freedom (i .e . jailed) . 86

Subsequent legislation has eliminated deportatio n

(in 1965 for all but residents of Moscow and Leningrad, in 1970 for the rest )
and substituted corrective labor in the place of residence . Recent legislation also makes a distinction between first offenders and repeat offenders ,
providing less serious punishments for first offenders . 87

Provisions hav e

also been made for alcoholics and drug addicts to be confined in special treat ment centers rather than in ordinary jails .
The provision for a warning with a period within which the individual mus t
find a job (currently 15 days) has apparently meant many do, in fact, go t o
work . This and the lesser penalties for first offenders may well be directe d
at young people . Many graduates of general secondary schools apparently spen d
some time dependent on their parents, waiting to be drafted or studying fo r
the university entrance exams .
"Rolling stones" (persons who change jobs too frequently) are subject t o
compulsory job placement, usually with a reduction in pay .
Aside from the punishments for "parasites" and "rolling stones," th e
"sticks" available for management to discipline workers are not very strong .
But recently, the possibility of taking away "carrots" has been made available .
Thus, the August 1983 legislation provides for additional vacation time fo r
length of service but workers absent without a valid reason will have a day' s
vacation taken away for each day's absence (except that the remaining vacatio n
cannot be less than 12 working days) and workers absent with permission of th e
management are supposed to put in compensatory time . Management is to take int o
account each worker's performance in determining vacation time and in allocating

34

housing and space in vacation homes . This legislation also provides tha t
persons causing damage or responsible for defective output will be hel d
responsible and will have to pay for the damage -- the total damage if cause d
by drunkenness, up to one-third of his average monthly earnings in other cases .
88
Drunkenness is also made a ground for firing .
A trend toward emphasis on discipline began before Brezhnev's death bu t
it was intensified when Andropov came to power in November, 1982 . 89

Hi s

speech to the Central Committee of the Part on November 22, 1982--his firs t
major speech in office, aside from the eulogy to Brezhnev--made a strong cal l
for improved discipline at every level . 90

This signaled the beginning of a

massive campaign to improve morale and discipline . The campaign is directe d

against managers and Party people who fail to create the proper conditions fo r
good-quality, productive labor, as well as against lax workers .
Andropov's speech was followed during the latter half of December b y
editorials and a spate of letters from workers complaining about idlers, absentees and drunks, urging that they be punished and suggesting appropriate punishments . 91

There were also reports of pledges by workers in various enterprise s

to wage war on slackers and to more resolutely apply material and moral sanction s
against botchers, absentees, drunkards, and those who wish to quit their jobs . 9 2
In January, the Central Committee of the Party stressed the necessity fo r
Party and trade union bodies to make greater demands on management to creat e
an atmosphere of intolerance of poor organization and poor discipline . 93

Thi s

was followed by a plenary session of the All-Union Central Council of Trad e

Unions . 9 4
It was during January that the police were sent to make surprise raid s
on shops, movie theaters, beer halls, railway stations and public baths during

35

working hours to round up those with no valid excuse for being away from wor k
and to report them to their employers, demanding that they punish the absentees . This was reported to have taken place in Moscow and in several othe r
major cities . 9 5
At the end of the month, Andropov made a personal visit to a Moscow machin e
tool factory for a talk with the workers . The main points he made--and, o f
course, these were widely publicized-were (1) that only by increasing productio n
and productivity can workers enjoy more goods and services and (2) that th e
question of strengthening discipline does not apply only to workers and engineering and technical personnel, it applies to everyone, starting with ministers . 9 6
It should be made clear that there have also been a series of crackdown s
on managers and ministers and other officials for embezzlement, bribery, gros s
inefficiency, soft-living, etc . 97

The point is frequently made that it i s

laxity on the part of supervisors and managers that permits loafers and drunk s
to get away without punishment, and that letting a few get by tends to mak e
others adopt such habits .
It would appear that what Andropov was trying to do was not just crack dow n
on the idle and drunk and on the managers who allow lax discipline, not just t o
provide some additional incentives--but to turn things around and create a
spirit of conscientious work . Thus, in August 1983 he said : "however, th e
essence of socialist discipline is full efficiency from everyone at his work place . Of course, it's harder to achieve such a situation than it is to catc h
late-comers at the factory gate . But that is the most important thing . "98

Th e

campaign might be characterized as a gamble that enough Soviet citizens wer e

fed up with corruption and favoritism, with drunkenness, idleness and shodd y
workmanship that they might be enlisted to work hard themselves and to put

36

pressure on their peers--and superiors--to shape up and meet their responsibilities . 99

For this to work, however, as Andropov recognized, a very sub-

stantial improvement in services and availability of goods would be necessary ,

for as things stand, even the conscientious often have to take time off t o
handle their affairs . While the latest law on discipline also calls for improv i
service hours and providing more services at the work place, it seems doubtfu l
that the necessary resources will be devoted to these problems in the nea r
future .

IV . THE JOB PLACEMENT SERVIC E

The placement bureaus act as intermediaries between members of the publi c
seeking work and enterprises needing workers . They attempt to match the qualifications and interests of the individual with the needs of enterprises fo r
specific types of labor . Although in some cities use of the services of th e
bureau is compulsory, there is no compulsion on the individual to take the jo b
to which he is referred nor on the employer to hire individuals referred .
Development and Role of the Placement Bureau s
Although there had been a network of labor exchanges during the 1920's ,
this was abolished in 1931 . The ground given was that unemployment had bee n
abolished and therefore no employment offices were needed . This attitude seem s
to have persisted until the late 1950's and early 1960's when the view develope c
among demographers and economists that technological advance and structura l
change in a full employment economy required some mechanism for facilitatin g
the allocation and reallocation of labor . Some also began to fear that th e
economic reform of 1965, giving employers greater leeway in matters of employ ment, would result in displacement of workers who would have to be helped in

37

finding new jobs . The fear of unemployment was also related to the entranc e
into the labor force in the mid-1960's of the first of the post-war baby boo m
generation . The unemployment hardly materialized . Instead, as time went on ,
it became increasingly apparent that the problem was not a surplus but a
shortage of labor . (See Section II above .) Thus, the view began to predominate that the placement bureaus could play a crucial role in making th e
labor market function better by facilitating an improved allocation of workers ,
reducing turnover and decreasing the time lost between jobs . (See Hauslohner ,
1981 .) It might be added that an increasingly educated labor force and a n
increasingly specialized economy enhance the importance of careful matchin g
of individual skills and preferences with the particular requirements o f
specific jobs .
The existence of the placement service, it might be expected, woul d
create the possibility of relieving enterprise management of the responsibility
of retraining or finding jobs for workers they release . This has been pro posed more than once . The only evidence found concerning this is in the 197 8
legislation governing the Shchekino experiment, which requires the ministrie s
to assist managers in devising plans for retraining and in finding jobs fo r
laid-off workers and in 1980 instructions concerning the implementation o f
targets for the reduction in manual labor at each enterprise ; these instructions include the provision that each enterprise is to submit a list o f
released manual workers with their qualifications to the local placemen t
100
bureaus for reassignment .

It is not clear whether this completely relieve s

enterprise management of the duty to find jobs for workers dismissed on thes e
grounds but it seems a start in the right direction . Complaints that th e
employment service had not taken over this function were made as recently a s
101
1981 .

38
The development of the job placement service will be described briefly ,
followed by a consideration of its role in the various forms of labor alloca tion .

The work of the bureaus will then be described, their success commente d

on, and the issue of whether they serve to restrict freedom of movemen t
addressed .
As indicated above, the December 1966 legislation

recommending , th e

establishment of the labor organs included job placement (trudoustroistvo )

as one of their functions .

Placement was initially performed by the oblas t

labor organs or their plenipotentiaries (upolnomochennye) in other towns o r

through "placement points" established by the labor organs . In 1969, urban
job placement bureaus operating on the basis of self-financing began to b e
established in the RSFSR .

Initially, such bureaus were established on a n

experimental basis in nine cities--Arkhangel'sk, Vladimir, Tula, Ufa ,

Krasnodar, Stavropol', Kuibyshev, Tomsk and Cherkessk (KotliariTrubin ,
1978, p . 38) .

Legislation of May 1969 extended the service in the RSFSR t o

all cities with a population over 100,000, "where expedient ." The latte r
seems to mean where there was a need for placement services and where selffinancing was feasible .

The process of establishing placement bureaus wa s

also proceeding in several other republics . 102

By 1970, there were 134 placement bureaus in ten of the fifteen republics (all but the Ukraine, Belorussia, Armenia, Georgia and Azerbaidzhan) ;
by 1977, there were 372 bureaus and all republics but Azerbaidzhan ha d
bureaus (Kotliar i Trubin, 1978, p . 39) . Placement in Azerbaidzhan was don e
by plenipotentiaries of the labor organs . By mid 1980, there was a tota l
of 632 placement bureaus . These existed in all republics and were locate d
in all cities with a population over 500,000, in 93 percent of the cities

39

with a population of 100,000-500,000, in 31 percent of the cities with a

population of 50,000-100,000 but in only 5 .2 percent of the cities with a
population under 50,000 .

10 3

As the placement service developed, total job placements increased an d

placements through the bureaus were an increasing share of the total . I t
is to be noted that the placement bureaus are self-financing (i .e ., are o n
khozraschet) while the work of the labor organs, including any job placemen t
they perform is apparently financed through the local government budget .
This is probably the reason the figures are given for all placements throug h
the labor bureaucracy and separately for the placement bureaus . Table 2
gives figures on the trends in placements in the RSFSR . In the USSR as a
whole, placements during the period 1971-75 totaled 8 .6 million, an averag e
of 1 .7 million a year and during 1976-80 placements totaled 12 .9 million, a n
average of 2 .6 million a year . Placements through the bureaus were 79 percen t
10 4
of the total in 1976 and 86 percent of the total in 1980 .
The placement service should be understood in the context of the variou s
forms of organized labor allocation which existed before their creation .
Graduates of vocational-technical schools are placed in their first job b y
their schools, which often are run by an enterprise or ministry ; they are sup posed to stay in the assigned job for two to four years, depending on th e
nature of the training received . Graduates of day specialized secondary school s
and institutions of higher education are directed by Commissions for Persona l
Distribution at their institution to their first job, where they are suppose d
105
to stay three years .

There is also provision for the administrative trans-

fer (perevod) of skilled personnel between enterprises, usually within

ministry . Organized recruitment (orgnabor) has long been used for transferrin g
groups of workers usually to a new enterprise or building site, often in another

40

TABLE 2
Persons Placed in Jobs with Assistance of Labor Organs ,
Including Placements Through Job Placement Bureaus, RSFSR ,
1968 - 197 9
(in thousands )
Total Placements

Placement s
by Bureau s

1968

320 .6

n .a .

1969

397 .5

47 . 5

1970

594 .3

251 . 4

1971

780 .4

479 . 0

1972

n .a .

654 . 8

1973

931

672 . 9

1974

1038

761 . 3

1975

n .a .

(832 )

1971-75 (ay .)

n .a .

68 0

1976

n .a .

93 3

1977

n .a .

(944 )

1978

n .a .

(1023 )

1979

n .a .

120 0

1976-79 (ay .)

1325

102 5

Sources : Col . (1) 1968-71, 73, 74 and Co . (2) 1969-76 an d

1979 :
Hauslohner, 1981 (Table 4) from Soviet Sources ;
Col (1) and (2) 1976-79 : Parfenov, 1980, p . 80 ;
Col (2) 1975, 1977 and 1978, interpolated .

41

locality . Another form is arranging the resettlement (pereselenie) o f

families, usually from one kolkhoz or sovkhoz to another . Both orgnabor an d
pereselenie are voluntary on the part of the worker or family and expenses o f
moving are paid . When created, the labor bureaucracy was given responsibilit y
for orgnabor and family resettlement ; in some republics this is handled by th e
labor organs, in others by the placement bureaus . Another form of allocatio n
is the mass mobilization

(obshchestvennyi prizvy) of young peopl e

for major projects, usually conducted by the Komsomol . Also pre-dating th e

placement bureaus are commissions for the placement of minors with incomplet e
or complete general secondary education ; commissions for juvenile affairs ,
which apparently also engage in placement ; commissions for placement o f
demobilized military personnel, of invalids, of persons released from prison ;
and a commission for the obligatory placement of persons refusing sociall y
useful labor (parasites) .
Given these other forms of allocation, the clientele of the placemen t
bureaus seems to be primarily among those wishing to change jobs rather tha n
among new entrants to the labor force . This may include some of those completing vocational or professional education in the evening and correspondenc e
schools while working . With respect to new entrants, the bureaus are specifically directed to seek out persons who are not employed in the social secto r
(such as housewives and pensioners) and to help them find suitable work . Th e
bureaus are also involved in the placement of graduates of the general secondary schools and of young people who do not complete secondary education .
Unlike the graduates of the vocational-technical schools and secondary specialized schools, graduates of the general 8-year or 10-year schools will no t
have acquired a specific occupation .

106

As E . G . Antosenko, Head of the

42

Administration for Labor Resources of the USSR Goskomtrud observed, the place 10 7
ment bureaus deal with "unplanned" labor .
The situation concerning the placement of young people from the genera l
schools is somewhat complex . It should first be made clear that enterprise s
are required to hire a certain number of persons under 18 years ; there are
quotas ranging from 0 .5 to 10 .0 percent of the enterprise's total employment .
These young people also work a shorter day than adults but receive full pa y
and there are more severe restrictions on firing them than is the case fo r
adults . There are commissions for the placement of youth attached to loca l
soviets, whose charge is to assist youth in placement and who have responsibility .108
to see that proper conditions are met for the employment of youn gpeol
No person under 18 is supposed to be fired without consulting the local com mission for the placement of youth . There are also local commissions fo r
juvenile affairs, which appear to deal mainly with orphans and delinquents .
Their role in placement apparently relates mainly to children who drop out o f
school during the year but they also play a role in checking up on young peopl e
who quit their jobs and the reason for quitting, in checking whether minor s
have been illegally fired and in finding new jobs for those who quit or ar e
fired . 109

The placement bureaus are supposed to participate with the com-

missions for the placement of youths and with the Komsomol committees in placin g
young people who do not complete secondary education and graduates of th e
general secondary schools or in guiding them to vocational or specialis t
training . 11 0
It is recognized that the several channels for placement of these youn g
people is confusing .

111

It is planned to issue typical instructions on the

43

placement of these young people,

112

which may clarify matters . Antosenko tol d

me that these services will be unified in the labor organs

. 11 3

The largest number of jobs are still filled by direct hiring by th e

enterprise itself . During the 1960's and 1970's, it is reported, around 8 5
percent or more of all industrial wage earners were hired "at the gate ." Wha t
is not always realized, however, is that persons hired through the placemen t
114
bureaus are included in the statistics for direct hires .

The role of th e

placement bureau increased in the direct hires . Table 3 shows the relativ e
importance of the various forms of recruitment among industrial wage earner s
over the period 1955 through 1976 . As indicated there, recruitment throug h
the placement bureaus increased from 8 .7 percent in 1971 to 17 .2 percent i n
1976 of all hires of industrial wage earners . Table 4 repeats these latte r
data for the USSR and gives comparable data for several republics . Part A o f
Table 4 expresses hires through the placement bureaus as a percentage of al l
hires of industrial wage earners while Part B expresses hires through th e
placement bureaus as a percentage of all industrial wage earners hired directl y
by the enterprise . By 1977, the latter had reached 25 percent for the USS R
as a whole, with a range (among the republics for which data are given) fro m
21 percent in Latvia to about 70 percent in Kirgizia and Turkmenia . In some
cases, the large role of the placement bureau appears to be explained by th e
large proportion of cities with placement bureaus in that republic (See Col . 6
of Table 4) but the correlation is by no means consistent so there must b e
11 5
other factors explaining the differences .
Data on the distribution of young people (under 30) in the RSFSR amon g
forms of recruitment are shown in Table 5 . The data are based on a survey o f
125,000 young people employed in 73 towns in the RSFSR during 1971-72 . Apparently the sample covers wage earners and salaried workers in various branches .

44

TABLE 3

Hires by Form of Recruitment, USSR ,

Industrial Wage Earners, 1955-197 6
In Percen t
1955

1965

1969

1971

1973

1974

197 6

10 .0

2 .4

2 .2

3 .8

4 .3

4 .7

5.3

1.

Through Orgnabor a

2.

By transfer

6 .5

5 .0

3 .9

3 .2

3 .4

3 .2

3. 1

3.

Graduates o f
vocational schools b

4 .1

4 .8

6 .2

5 .2

5 .6

5 .7

6.3

8 .7

12 .5

14 .1

17 . 2

4.

Hired directly by
enterprise s
a.

through placemen t
bureaus

87 . 7
b.

independently

Total organized channel s

(1 + 2 + 3 + 4a)

79 .4

87 .8

79 .1

74 .2

72 .3

68 . 1

20 .6

12 .2

n .a . 20 .9

25 .3

27 .7

31 . 9

a . Mobilization drives (obshchestvennye prizyvy) excluded from 195 5

figure, included in figures for 1971-74 ; treatment in 1965 and 1976 unknown .
b including students in production practice .
n .a ., not availabl e

SOURCES : 1955 and 1965 : Hauslohner, 1981, Table 5 ; 1967-74 :

Maslova 1976, pp . 146, 201-205 ;
1976 : Hauslohner, 1981, Table 5 ; Kostin, 1979, p . 239

45

TABLE 4
Role of the Placement Bureaus in the Hiring o f
Industrial Wage Earners, USSR an d
Some Republics, 1971-1977

1971

1973

1974

1976

1977

Cities with
bureaus - %
197 7

8 .7

12 .5

14 .1

17 .1

n .a .

18 . 8

Armenia

26 .3

30 .8

40 .7

44 .4

n .a .

12 . 5

Estonia

13 .7

15 .8

17 .2

n .a .

n .a .

15 . 2

7 .7

11 .4

12 .2

n .a .

n .a .

13 . 0

Turkmenia

20 .6

24 .8

23 .5

29 .0

n .a .

53 . 3

Uzbek SSR

11 .7

16 .6

22 .8

29 .2

n .a .

29 . 3

9 .9

14 .4

16 .3

20 .2

25 .3

18 . 8

Belorussia

n .a .

n .a .

n .a .

n .a .

32 .4

21 . 9

Georgia

n .a .

n .a .

n .a .

n .a . '

34 .1

9.8

Kazakhstan

n .a .

n .a .

n .a .

n .a .

33 .5

59 . 7

Kirgiz SSR

n .a .

n .a .

n .a .

n .a .

71 .1

50 . 0

Latvia

n .a .

n .a .

n .a .

n .a .

21 .4

_16 . 1

Tadzhik SSR

n .a .

n .a .

n .a .

n .a .

34 .7

61 . 1

Turkmenia

n .a .

n .a .

n .a .

n .a .

69 .7

53 . 3

Uzbek SSR

n .a .

n .a .

n .a .

n .a .

40 .8

29 . 3

Placements through bureau s

in % of all persons hi red
USSR

RSFSR

Placements through bureau s

in % of all persons hire d
directly by the employe r
USSR

SOURCES :

Maslova, 1976, pp . 146, 171 ; Kostin, 1979, pp . 239-40 ; Kotliar

1978, pp . 39, 155-56 .

Trubin ,

Note : The B figures for the USSR for 1971-1976 are consistent with th e
A figures ; see lines 4a and 4b in Table 3 .

46

TABLE 5

Hires by Form of Recruitment, RSFSR ,

Young People (under 30), 1971-197 2

Percent o f
Young Workers
1.

Through Orgnabor

2.

Mass mobilization

3.

By transfer

4.

State distribution

5.

Through commissions fo r
placement of young

Through labor , organs an d

bureaus

6.

7 . Individual hires

26

53
10 0

SOURCE : E . V . Kasimovskii, ed ., TrudovyeResursy :

Formirovanieiizpol'zovanie, M . : Ekonomika ,
1975, p . 189

47

Thus, the relatively large share of distribution by the state--i .e . assignmen t

to jobs on graduation--(in comparison with Table 3) reflects both the younge r
age group and the broader occupational and sectoral coverage than Tables 3 an d
4, which refer to industrial wage earners of all ages . The source of Tabl e
5 indicates that, while 47 percent of all young workers were hired through organized forms, among those aged 25 to 29, less than 30 percent are placed throug h
11 6
organized forms of recruitment .
For the economy as a whole in 1980, it was estimated that about 15 percen t
of those hired were placed through the labor organs (including the placemen t
bureaus) and in cities where there were placement bureaus, about 30 percen t
(Nikitina, 1981, p . 71) .
Table 6 shows for the entire economy the number who applied to the place ment bureaus for assistance in finding a job, the number referred by th e
bureaus to job openings and the number actually placed in jobs through th e
bureaus from 1971 to 1980 . The total of 2 .9 million placed through th e
bureaus in 1980

117

is large in relation to the increment in the labor forc e

(excluding collective farmers) in that year of 1 .9 million118 but small i n

relation to estimates that some 20 million to 30 million persons change job s
each year .

11 9

Operation of the Placement Bureau s

The placement bureaus, supposedly located in convenient places, have ,
on average, 7 .3 employees, of whom 2 .9 are inspectors and 1 .0 is an economist (1974 data from Kotliar

Trubin, 1978, p . 139) . The inspector receive s

applicants, records information on the job seeker's qualifications and occupation, the reason he left his previous job where relevant, the kind of wor k
he would like, the preferred location, etc . The inspector searches his file

48

TABLE 6

Persons Processed by Job Placement Bureau s

of the USSR, 1971-197 9

1971

1974

1977

1979

198 0

(in thousands )
Applicants

1,286 .3

2,229 .0

2,901 .7

2,865

n .a .

Referrals

1,035 .8

1,931 .4

2,476 .0

2,444

n .a .

664 .9

1,425 .3

1,949 .2

2,004

2,90 0

Placements

(in percent )
Referrals as percen t
of Applicants

80 .5

86 .6

85 .3

87

n .a .

Placements as percen t
of Referrals

64 .2

73 .8

78 .7

82

n .a .

Placements as percen t
of Applicants

51 .7

63 .9

67 .2

71

n .a .

SOURCES : 1971-77 : Kotliar i Trubin, 1978, p . 49 ; 1979-80 : pp 64-66 .

1979 Line 1 is calculated from 1971 figure and Maslova's statemen t
that the number of persons not employed who applied to the bureau s
grew from 9 .1% in 1971 to 14 .3% of all applications in 1979, a
growth of 3 .5 times .
1980, Line 3 : Maslova, 1981, says 2 .9 mil . persons received assistance from the bureaus . The interpretation that this refers t o
placements is supported by a statement in Nikitova, 1981, p . 69, tha t
in 1980 the number not employed who were placed through the bureau s
was 367 :thousand or 12 .6 percent of all persons placed .

49

of orders for workers from enterprises for suitable openings and gives th e
applicant information about the job, the pay, the shift regime and vacatio n
provisions and information about living conditions (presence or absence o f
apartments or dormitory rooms and places in pre-school institutions, etc .) .
If the applicant is interested, he is given the name and address of the potential employer and a referral slip and may present himself to the personne l
department of the enterprise . The enterprise is supposed to inform the burea u
within five days whether the person referred was hired and, if not, the reason .
This is recorded on the individual's card .
As indicated above, the bureaus are on khozraschet--i .e ., they are selffinancing . The work of the bureaus is financed by payments by the enterprises .
There are two basic forms of payment . In the RSFSR, the Ukraine and Turkmenia ,
the enterprise pays for specific services received through the bureau ; i .e . ,
for each person hired with the help of the bureau and for each job advertise ment placed with the bureau . The rates for the services are set by republica n
price committees and differ among republics . 120

In the other republics, th e

enterprise pays a fixed sum at the beginning of the year to cover all service s
for the year . The fee is differentiated among enterprises on the basis of thei r
12 1
planned levels of employment ; the schedule of fees varies by republic .
There has been some controversy over the method of financing . Kotliar an d
Trubin (1978, p . 117) suggested the bureaus should be financed through th e
budget . A debate was opened by Maslova (1981), who proposed that the bureau s
should to a greater extent be financed from the budget, with funds paid by
the enterprises to the local soviets . The principle she proposes for establishing the fees to be paid are (a) that they must be large enough to cove r
the normal operations of the placement bureaus and to permit the further develop-

50

ment of the placement service in the locality, and (b) they should be differentiated among enterprises on the basis, essentially, of the amount of service s
they are likely to require . She mentions the number of employees and th e
number hired per year . She indicates, however, that the data are not avail able to work this out properly as records of hires and separations are no t
kept for all categories of personnel nor for all branches of the econom y
(Maslova, 1981, pp . 69-70) . Besides assuring enough income to perform th e
services of the bureaus, the main advantage of the proposed method Maslov a
sees is freeing the bureaus from direct financial dependence on the enter prises using their services . V . Shumov, the head of the Moscow Oblast labo r
organ, agrees with Maslova and argues it would simplify bookkeeping
trud, 1983, no . 4, p . 76) .

(Sots .

N . Panteleev, Chairman of the Ukrainia n

Goskomtrud argues against this on the grounds it would require compulsor y

records of all hires and separations, that it would require enterprises to pa y
for services they hadn't ordered, and that financing through the budget contradicts the essence of self-financing and the incentives of the employees o f
the bureaus (Sots . trud 1982, no . 4, pp . 17-18) . Santybaev and Zaikov of th e
Kirgiz Goskomtrud agree that transferring the placement bureaus to budge t
financing would free them from direct financial dependence on the enterprise s
and permit them to operate more objectively as intermediaries but say th e
proposal has the serious drawback that it would destroy the existing incentive s
to improve the work of the bureaus by raising effectiveness and increasing th e
volume of placements . They suggest there might be an experiment in one republi c
to ascertain the virtues and faults of budget financing (Sots .
no . 4, pp . 27-28) .

trud, 1982 ,

51

It should be mentioned that bonuses for employees of the placement bureau s

are linked primarily to fulfilling the quarterly goals for placement of applicants, and secondarily to fulfilling the quarterly goals for completing th e
staffing of new enterprises, for organized reallocation of labor (throug h
orgnabor or resettlement), bringing new persons into the labor force, an d
working out measures to reduce turnover and increase retention rates, and th e
bonuses are conditional upon fulfilling the plan for the bureau's income . 12 2
It might be mentioned also that the payment arrangements were establishe d
before the function of the bureaus was extended to cover a larger role in th e
planning of the use of labor . Payment per unit of service would presumabl y
not be enough to cover additional work not directly related to a particula r
enterprise's needs .
The problems seen as arising from the bureaus being paid directly by th e
enterprises are a possible conflict between the bureau's interest in its
income and its responsibility to conduct effective oversight of manpower utilization and a not unrelated possible conflict between favoring the large ,
established enterprises who have contributed to the bureau's income over ne w
enterprises, which are generally supposed to be given priority in help wit h
building their staff .
The work of the bureaus depends heavily on having enough information o n
job openings to be able to place applicants in satisfactory jobs and enoug h
applicants to fulfill enterprise-orders for workers to their satisfaction .
For information on job openings, the bureaus are for the most part dependen t
upon the enterprises voluntarily placing orders for workers and supplyin g
information on vacancies . In a few republics--Georgia, Latvia, Kirgizia an d
Tadzhikistan--the enterprises are required by law to provide information o n
vacancies.123 1n some cities, use of the placement bureaus is compulsory for

52

both enterprises and individuals,

124

which means the bureaus should have nearl y

complete information both on job openings and job seekers . Without compulsion ,
enterprises apparently often--particularly those who are successful in hiring- prefer to continue to hire on their own, or , at least, tend to keep quie t
about the more prestigious openings for use in internal promotion or i n
attracting especially qualified persons . 12 5Furthermore, as the oversigh t
functions of the labor organs increased, enterprises with above limit labo r
might be reluctant to apply to the bureaus for fear this would be revealed .
The question of attracting applicants to the bureaus seems to have bee n
viewed initially with some ambiguity . If the work of the bureaus and th e
job openings were advertised, some feared this would encourage persons alread y
holding jobs to apply to change jobs and thus increase turnover . ' 2 '

Th e

apparent solution has been, at least in the RSFSR and Belorussia, to attemp t
to monopolize job advertisements . The bureaus post notices of job opening s
in the media and on wall boards outside their offices and in central spots i n
the city, and all such ads refer the interested person to the placement bureau .
In the RSFSR and in Moscow specifically, enterprises are supposed to plac e
job advertisements in the media only with the permission of the bureau an d
then it must be placed under the heading " Sluzhba trudoustroistvo " withou t
identification of the enterprise and only the address of the placement burea u
is to be given . 127

Presumably, this provides the opportunity for the burea u

to screen clients and to deter those who are already suitably employed .
This rule is apparently not enforced, or not well enforced . In Moscow, a t
least, there are numerous ads for workers . Some are handwritten notices i n
the windows as in the restaurant of the National Hotel and the big food stor e
on Kalinin Prospect, and some are obviously more permanent signs, as in th e
metro cars and buses and at the personnel department of the Hotel Intourist .

128

53

The Ufa-Kaluga Syste m

Use of the job placement bureaus is for the most part voluntary on th e
part of both employers and individuals . In some cases, individuals fired fo r
absenteeism or other violations of discipline, and "rolling stones" can onl y
be placed through the bureaus . 129

In some cities use of the bureaus is com-

pulsory for both employers and individuals . In these cities no one (excep t
for certain categories of persons for whom there are other forms of organize d
placement) can be hired except through the mediation of the placement bureau .
1t should be understood at the outset that the right to take or refuse a jo b
to which he has been referred is left to the individual and the decision whethe r
or not to hire the person referred is left to the enterprise management .
This compulsory system started in 1971 as a two year experiment in tw o
130
cities of the RSFSR : Ufa and Kaluga .

Oddly enough, although the legislatio n

providing for the compulsory aspects was repealed in late 1972, the practic e
continues
.131in Ufa and Kaluga and has been extended to several othe rcites
In 1974, forty-three bureaus in the RSFSR and other republics of the total o f
278 bureaus were operating according to "Ufa-Kaluga" (Maslova, 1976, p . 196) .
Cities where the bureaus operate on Ufa-Kaluga principles include fiv e
cities in Kazakhstan, some or all cities in Kirgizia, at least two cities i n
Uzbekistan and two in Tadzhikistan, Tiraspol' (Moldavia), Khar'kov (Ukraine) ,
Kutaisi (Georgia), Vitebsk (Belorussia) and Narva (Estonia) (Hauslohner, 1981 ,
p . 27) .
A major advantage of the Ufa-Kaluga system, to the extent that it can b e
enforced, 132 is that the placement bureaus have complete information on bot h
vacancies and persons seeking work . This should facilitate making appropriat e
matches between persons and jobs, provide a better information base on whic h
to analyze and plan concerning the use of labor, and strengthen the labor

54

bureaus and organs in their efforts at oversight of the use of labor by enter prises . In particular, when it is possible to hire only through the bureau ,
the bureau can refuse to provide labor if the enterprise is considered full y
or over staffed .
An investigation of Ufa and Kaluga showed that during the first two year s
of the experiment with compulsory use of the bureaus, most indicators showe d
this a great success . Thus, turnover in industry was reduced between 1970 an d
1973 from 17 .2 percent to 14 .3 percent in Kaluga and from 18 .1 percent t o
16 percent in Ufa, which was a greater reduction than in the RSFSR as

whole . Also, the percentage of persons changing occupations when they change d
place of employment fell by 5 percentage points in Kaluga and by 12 percentage points in Ufa . Further, in Kaluga the number of enterprises with seriou s
labor shortages was reduced by 35 percent while the number of enterprises wit h
above plan labor was reduced from 40 to 17 between 1970 and 1972 . In Ufa i n
the same period, the number of enterprises with labor shortages was reduced b y
55 percent and the number with above plan labor was reduced by 52 percent .
Also, the information available to the bureaus in Ufa and Kaluga permitte d
them to analyze where the greatest shortages were and to adapt the plans fo r
13 3
training in the vocational schools .
There seems to be general agreement that the placement service in Ufa an d
Kaluga and other cities where use of the bureaus is compulsory has bee n
superior on the above types of criteria and that this is because of the mor e
complete information available . There seems

to be agreement among economist s

and placement bureau personnel (probably not among managers) that enterpris e
management should be required to supply data on all hirings and firing s 134 bu t
there is not agreement on the other compulsory aspects of the Ufa-Kalug a
type bureau . Doubts have been raised about the legality of the system . Some

55

point to the fact that compulsion violates the constitutional rights of individuals to choose their occupation and place of work and that it is a n
unnecssary interference in the right of management to choose its employees .
Others point to the impracticality of universal use, given the small staffs
of the bureaus . Another line is that use of the bureau should be voluntary
if the bureau is to be on good terms with, and receive full and accurat e
information from, the enterprises . A further argument is that many worker s
find their own jobs independently and then have to go to the bureau for th e
referral slip necessary to make the hire legal, and that this wastes tim e
while the bureaus are supposed to save time . Kotliar and Trubin,

t
e .poin
.g . ,

out that a one day investigation of bureaus on the Ufa-Kaluga system in 197 4
showed that 25-30 percent of all applicants and 58 percent of applicants to th e
Kaluga bureau that day had already arranged jobs (p . 48) . It may be, however ,
that the system in Kaluga saves rather than wastes time for job opening notice s
posted in the Kaluga bureau include the name and address of the enterprise s
with openings . This means, the head of the Kaluga bureau reports, an applicant can either turn to the inspector for advice and referral or he can firs t
visit one or more of the factories with openings . 1 35
We return below to the question of the impact of the placement bureaus ,
including those of the Ufa-Kaluga type, on individual freedom .

Success of the Placement Servic e

Two major success criteria for the placement bureaus are the increase i n
the use of the bureaus and their success in referring and, especially, placin g
applicants . As we saw above, for the USSR as a whole, the number of applicant s
to the bureau increased from 1 .3 million in 1971 to 2 .9 million in 1979 ; th e
percentage referred rose from 81 to 87 percent of the applicants and the number

56

placed rose from 52 percent to 71 percent of the applicants (Table 6 above) .

Similar data for the RSFSR for the period 1969 to 1973 are shown in Table 7 ,
and Table 8 shows the ratio of placements to applicants in ten other republics
in 1973 and 1977 . As Table 8 shows, the success of the bureaus in placemen t
in 1977 ranged from a low of 61 percent of the applicants in Belorussia t o
136
highs of 88 or 90 percent in Uzbekistan and the Kirgiz Republic .

Thes e

placement ratios are impressive in comparison to the experience of the U . S .

13 7
Employment Service .
Placements are less than referrals either because the applicant did no t
show up or did not like the job or because the enterprise did not find th e
referred individual satisfactory or, in some cases, no doubt, because th e
enterprise personnel department did not bother to inform the bureau that i t
had hired the worker . A survey of the work of 32 bureaus in the RSFSR i n
1974 showed that in 45 percent of the cases of non-placement, it was the resul t

of

the individual's behavior (didn't go to the enterprise to which he wa s

referred, got sick, left town) ; in 8 percent of the cases, the enterprise foun d
the referred individual unsatisfactory (anticipating disruption of discipline ,
persons without proper work papers, rolling stones) ; in 17 percent of th e
cases the reason was unknown ; and in 30 percent of the cases the failure t o
place was attributed to deficiencies in the work of the bureau . These deficiencies on the part of the bureau included failing to take into account th e
applicant's desired wage (9 percent) or the applicants' desired working conditions (8 percent) and in 2 percent of the cases the skill of the applican t
did not match that required by the enterprise . Part of the problem can b e
attributed to lack of information (Kotliar

Trubin, 1978, pp . 102-103) .

Additional success criteria include a decrease in turnover . Overall ,

the decline in turnover has apparently been very gradual, but the 1979 law

57

TABLE 7

Persons Processed by Job Placement Bureau s

of the RSFSR, 1969-197 3

1969

1970

1971

1972

197 3

(in thousands )
Applicants

128

587

977

1,126

1,188

Referrals

95

461

793

961

1,02 3

Placements

47

251

479

655

67 3

(in % )
Referrals in % o f
Applicants

74

79

81

85

86

Placements in % o f
Referrals

49

54

60

68

66

Placements in % o f
Applicants

37

43

49

58

57

SOURCE : Kasimovskii, 1975, p . 116 .

58

TABLE 8

Placement Through the Bureaus, by Republic ,

1973 and 197 7

Persons Placed in % of Applicant s

1973

197 7

USSR 63.9a,b

67 .2 b

Belorussia

52 .1

61 . 4

Georgia

86 .8

83 . 8

Estonia

55 .6

60 . 8

Kazakhstan

79 .4

78 . 3

Kirgiz SSR

64 .0

89 . 8

Latvia

80 .5

73 . 7

Tadzhik SSR

75 .6

72 . 2

Turkmenia

80 .6

82 . 0

Ukraine

61 .7

77 . 6

Uzbek SSR

68 .7

88 . 2

a 197 4
b The USSR figures apparently refer to all kinds of workers while th e
other figures apparently refer to wage earners and, probably ,
industrial wage earners only .

SOURCE : Kotliar i Trubin, 1978, pp . 49, 159 .

59

on improving discipline is said to have led to a significant, though temporary ,

decrease in turnover in 1980 of, e .g ., 12 percent in industry . 138

Not unrelate d

to the question of turnover are matters such as the length of time betwee n
jobs, the extent to which persons changing the place of work also change occupation and the retention rate of new hires . It is very frequently claime d
that the placement bureaus have made significant contributions in these thre e
areas . The comparison is usually made between the behavior of those place d
through the bureaus with that of those who found their own jobs . I have see n
no mention of the possible problem that self-selection might cause for suc h
comparisons .
Thus, apparently for the economy as a whole, the retention rat e 139 for per sons placed through the bureaus was said to be 10 percent higher and the rat e
of turnover 12 percent lower than for persons finding their own jobs ; only 1 6
percent of those placed through the bureaus required retraining while 25 per cent of those who found their own jobs did . Between 1971 and 1979, the numbe r
of persons who changed jobs without a break from work rose from 7 .7 percent
to 9 .9 percent and, thanks to the work of the placement bureaus, the averag e
number of days between jobs was reduced to 8-12 days . 140

Another source say s

it takes an individual 24 days to change jobs on his own but only 10 wit h
14 1
the help of the placement bureaus .
Another significant criterion for success of the bureaus is the extent t o
which the number of enterprises with either too many or too few workers ar e
reduced . Various degrees of success in this respect are reported on a loca l
basis . I have not seen any figures for the economy or even a republic as a
whole . 142

Related to this is the extent to which a bureau fills the needs fo r

workers of new and other priority enterprises .

60

Finally, results of efforts to bring into the labor force housewives ,

persons working only on the private plots, and pensioners are to be considered .
The trend nation-wide in the increase in employment of pensioners is shown i n
Table 1 above .
The measures of success, though partial and sometimes rather crude, suggest that the placement system must have contributed to a smoother functionin g
of the labor market . Soviet economists, while often critical, seem to believ e
that the kinds of indicators cited above mean that placement through th e
bureaus leads to a better and more stable solution than direct independen t
hiring from the point of view of both the individual and the enterprise .
The existence of the placement service should make it easier to face th e
delicate problem of firing redundant workers and to place them . As indicate d
above, the placement bureaus have apparently not yet fully taken over fro m
enterprise management the responsibility for finding jobs for released workers .
To the extent that they do, one of the disincentives for firing redundan t
workers will be eliminated . Further, an employment service perceived by th e
public as effective should permit a departure from the interpretation of ful l
employment as a guarantee that no individual will lose his job to a mor e
flexible guarantee that an appropriate job will always be available even thoug h
this may require a change in job .
Placement itself appears to function best on a local level . When th e
bureaus handle also orgnabor and resettlement, and play a large role in mas s
recruitment and in the placement of graduates of the general schools, th e
whole allocation process probably is more coordinated than when these functions are handled by different bodies . Further development of the inter regional information system is necessary to make the placement syste m
national .

61

It is not clear how much the information collected by the placemen t

bureaus on vacancies and available workers contributes toward planning th e
better local use of labor . This no doubt differs among bureaus, perhaps mos t
between those on the Ufa-Kaluga system and others where employers are require d
to provide information and the other bureaus . Apparently there are problem s
with the reliability of the data, stemming from the low level of education o f
many of the employees of the bureaus

143

and lack of uniformity in methods o f

processing the data . The information system is automated only in some cities .
Work is under way to try out various automated systems to determine which woul d
by most suitable (Nikitina, 1981, pp . 73-74) and it is likely to be some tim e
before the entire system can be automated on a nation-wide basis .

Impact of the Placement Service on Individual Freedo m

Has the establishment of the placement service tended to restrict the free dom of movement of the individual? The existence of the network of bureau s
would make it possible to substantially increase the degree to which labor i s
administratively allocated but I see little evidence that this is intended .
There are three issues to be looked at here : the treatment of violators o f
discipline and law ; the compulsion to use the bureaus in the Ufa-Kaluga system ;
and the priorities set for the placement bureaus .
For persons fired for violating labor discipline and "rolling stones, "
placement through the placement bureaus is, at least in some places, compulsory .
Enforcement of the law against parasites (persons not working in the socia l
sector), in contrast, is not, at least in the RSFSR, conducted by the regula r
placement bureaus (Normativnye akty . . .,

1972, pp . 495-97) . The existence o f

the placement bureaus 144 undoubtedly makes it easier to locate "parasites" an d

"rolling stones" and one might assume that a placement inspector is somewhat

62

more likely than an enterprise personnel manager to report an individual whos e

workbook shows irregularities . Thus the Ufa-Kaluga type compulsion increase s
the possible problems for law-breakers .
For the law-abiding citizen, even Ufa-Kaluga is not viewed as restrictin g
freedom of job choice . Peter Hauslohner made a market content analysis of al l
articles (39) found in central or republican Russian-language newspapers concerning the job placement bureaus during the years 1970-1979 . He concludes ,
"In no article on Ufa-Kaluga, did I ever see it stated that the conscientiou s
worker's freedom of job choice might be intentionally limited, or that worker clients have ever complained on that score ." (Hauslohner, 1981, p . 49 . )
This suggests that for the mass of Soviet citizens, the placement service doe s
not appear to restrict freedom of mobility and job choice . It may, on th e
contrary, facilitate freedom by helping the individual to make more informe d
choices about jobs .
This is not to say that there may not be informal pressure by the inspec tors to fill the jobs they see as most important . The literature stresse s
the functions of the bureaus as matching the interests of the individual wit h
the interests of society but, presumably, these do not always conincide . Th e
bureaus, at least recently, are given priorities for enterprises in thei r
area with the most urgent need for workers and it is to their advantage t o
try to meet these priorities . Also, they may try to satisfy first those enter prises which make the most frequent use of the services and, hence, contribute
most to the bureau ' s income . Does the inspector, who usually has control ove r
the information on jobs, conceal information on jobs which might suit th e
individual applicant but which are low on the bureau ' s priority list?145 It i s
also possible that the advice given is not always very informed, given the

63

relatively low level of education of the personnel of the bureaus and th e

small size of the bureau staffs .

V . OVERSIGHT OF THE USE OF LABOR IN THE ENTERPRIS E

We may distinguish two major areas where oversight

(kontrol') of enter -

price activities is exercised by the placement bureaus and/or labor organs .

The first is related directly to the placement process and involves checkin g
on the conditions of work and living conditions in enterprises to which person s
have been or will be referred to work . The second is wide-ranging and cover s
checks on fulfillment of labor-related plan indicators and investigation int o
any aspect of an enterprise's operations relating to the use of labor an d
labor productivity .
The oversight of labor and living conditions reminds one again of th e
extent to which Soviet enterprise management is forced to be concerned wit h
things like housing, pre-school institutions and the like in addition t o
matters directly relating to production and working conditions . The purpos e
is to obtain information or to verify information provided by the enterpris e
on the nature of the jobs and conditions, in order to better inform and protec t
job seekers . Special attention is paid to the conditions for young peopl e
The labor organs (in some republics, placement bureaus) together with Komsomo l
committees annually carry out raid-inspections

(reid-proverki) of the place -

ment of school graduates and their use in production . In the RSFSR over 2 0
thousand enterprises are inspected in this way a year . (Parfenov, 1980, p . 83 . )
In Belorussia, there are two such inspections a year, one in April and May t o
see whether the enterprises are ready to accept young graduates and one i n
August and September to check up on how the graduates have been placed an d
are being treated .

146

Among items checked are the appropriateness of the job

64

assignment, wages, working conditions, whether the special rules about hour s
and vacations - for the young 'are observed, what provisions there are for furthe r
vocational training at the enterprise, whether mentors have been assigned t o
help the graduates adapt to the work, and living conditions .
It is in the second area, that of the oversight of the use of labor in th e
enterprises, that the labor organs play a major role in the effort to improv e
the effectiveness with which labor is used and to squeeze out hidden reserve s
of labor . 147

From the legislation and the reports of the activities of man y

labor organs, it appears that they help enterprise management find ways o f
improving labor productivity for which management may have a good incentive ,
concern themselves with the adequacy of the labor force of the enterprise, an d
serve as watchdogs over compliance of the enterprises with administrativ e
rules and regulations .
For several years the labor organs have apparently had the right t o
investigate any aspect of an enterprise's operations in search of hidde n
reserves, low productivity and its causes . They may act to encourage th e
adoption of the brigade system, check on progress being made in reducin g
manual labor, supervise adoption of the Shchekino method, see whether socialist competitions are organized, etc . For instance, the Perm Oblast labo r
organ in an investigation of the trusts of the West Siberian Constructio n
Administration found that the small tools were inconveniently placed ,
photographed the work process and found intra-shift down time of up to 3 0
percent of the time, discovered much work time was lost not only throug h
absenteeism but also through absences with permission of the administration .
As a result of this and other investigations throughout the oblast, 30,00 0
suggestions for improved productivity were made . Many of them were realized

65

and this led to a 19 percent reduction in the loss of work time, equivalen t
to freeing about 13,000 workers . (Perov, head of the Perm Oblast labo r
organ, 1978, pp . 100-104 . )
The labor organs along with the placement bureaus are involved in th e
allocation of labor and the implementation of the policy that most existin g
enterprises are to raise output solely through improved productivity, with n o
increase and possibly a decrease in the number of workers . Recent regulation s
for the operation of the placement bureaus stress that priority is to b e
given to new and to especially important existing enterprises in supplyin g
148
workers .

Apparently each labor organ and/or placement bureau is given a

list of priority projects whose recruitment it is supposed to oversee .

As indicated above, the labor organs participate in planning to ensur e
that the adequacy of labor supply is taken into account . The administrativel y
set limits on employment for each enterprise and ministry are supposed to b e
established in consultation with the labor organs . The effectiveness of th e
labor organs in this process apparently varies . There are complaints tha t
sometimes the labor organs are not consulted at all and sometimes the limit s
are changed by the ministries after the consultation . There are also complaints that the lists of enterprises indicating for each the actual number o f
workers and the employment limit (necessary to enforce the limits), which wer e
to have been provided by the local statistical agencies beginning in 1981 ,
have not been provided to the labor organs (Roshchin, 1981, pp . 36-30) . Th e
advantage of the Kaluga system in ensuring the placement bureaus have suc h
information has been pointed out .

14 9

The labor organs are supposed to check whether enterprises exceed thei r
employment ceiling or, alternatively, are in need of additional workers . The

66

placement bureaus also, on receiving a request for workers, are supposed t o

check whether the actual number of workers is within the limit before refer ring any workers . For example, the RSFSR Goskomtrud investigated the enter prises of the RSFSR State Committee for Agricultural Machinery and found man y
exceeded the limits while there were significant internal reserves in some o f
the enterprises which, if mobilized, would permit achieving the required growt h
in output with no more or with fewer workers .

Goskomtrud made a resolutio n

requiring the committee to bring the actual number employed into conformity t o
the established limits and to work out measures enabling them to observe th e
limits in the future . At the local level, the Orenburg oblast labor orga n
sent directives to 95 enterprises in 1980 and 45 directives in the first hal f
of 1981 to enterprises to reduce the number of workers to the limit an d
150
brought sanctions against some .

In Leningrad, investigations are mad e

each quarter in over 130 enterprises in nine ministries . The labor organs may
be assisted in the investigations by specialists on the relevant branch of th e
economy, personnel of the Party's labor section, students, representatives o f
15 1
the public, and others .
It is clear that the labor organs are not only to expose enterprises wit h
above limit workers but also to try to ascertain the causes and to sugges t
ways to improve the situation . An example, which may be hypothetical, i s
given with regard to the Kaluga placement bureau . The director of an enter prise calls the bureau for immediate help with workers for his forge shop ; h e
has no workers there and will have to close down ; also, he is below his employ ment limit . The bureau head responds he cannot send any workers because h e
had already sent over a thousand people and over a thousand quit ; the proble m
was no ventilation in the forge shop, as the director has been told several

67

times . The bureau chief indicated the matter must be brought up for revie w
by the city Soviet executive committee, and in the meantime he would no t
15 2
send any workers .
When the issue is one of excessive workers at the enterprise, it woul d
seem logical that the burden of placing the redundant workers would be take n
on by the labor organs and, particularly, the placement bureaus . As indicate d
above, in the case of workers released in connection with the reduction o f
manual labor, management is supposed to give the placement bureau a list o f
those released . It is not at all clear, however, that the placement bureau s
have yet taken on the whole task of finding jobs for dismissed workers .
How do the labor organs get the enterprises to improve productivity an d
to dishoard labor? In the first place, they provide enterprise managemen t
with the results of their investigations and issue suggestions or instruction s
as to how the situation should be improved . They may also make publicit y
about enterprises which are making especially effective or especially wastefu l
use of labor . The labor organs, however, appear to be essentially consultative organs without enforcement powers of their own . The local labor organ s
report problems of lack of conformity with their instructions to local govern 153
ment and party organs and to peoples control units ;
presumably these bodie s
exert pressure for conformity .
There are three forms of sanctions but their use requires the cooperatio n
of other agencies . First, the labor organs may request the placement bureau s
not to supply labor to the offending enterprise . This is a strong weapo n
where it is difficult to hire workers outside the placement office, eithe r
because it is illegal as in Ufa and Kaluga or because labor is so scarce i n
the area . Second, there are provisions for reducing the bonus of top manage ment for exceeding the planned wage bill . The actual reduction is the

68

responsibility of the ministry so the labor organ must request the ministry ,
either directly or through the local government or party organ, to do so .
Third, there is a provision that the wage fund will be reduced in the even t
the enterprise achieves an increase in production with above-limit labor an d
without fulfilling the labor productivity target .

154

It is Gosbank which

implements this sanction .

How effective has all this been? A number of reports of labor organ s
indicate fairly impressive reductions in the number of enterprises with above limit workers and in the number of enterprises with labor shortages . Ther e
are also complaints that enterprises still hoard labor and calls for more
155
effective sanctions .

In some cases, further more, bringing the number o f

workers into compliance with the limit is achieved not be reducing the numbe r
of employees but by getting the ministry to raise the limit . (Roshchin, 1981 ,
p . 39 .) When I asked Antosenkov whether the limits were realistic, h e
responded with a grin :

"Realistichnykh iii elastichnykh?"156 He admitted tha t

there seem to be problems in enforcing the limits but, since these were rathe r
new, it was early to judge . He thinks the limits may be helpful in the shor t
run but puts more hope for the long run in improved incentives and an economi c
guidance system as outlined (in the other part of) the July 1979 decree o n
planning and improving the economic mechanism .
The effectiveness of the work of the placement bureaus and labor organ s
apparently varies - substantially from location to location . This stems in par t
from differences in the rules under which they operate . It is surely influence d
by the extent to which the local government and party organs support the wor k
of the labor organs and by the relative strength of enterprises to resist (an d
to enlist the support of their ministries in such resistance) unwelcome

69

recommendations of the labor organs . Also important are differences in th e

abilities and enthusiasm the local labor officials bring to their task .
Some questions have been raised concerning the legitimacy and clout o f
the labor bureaucracy . Some also complain that the laws are not clear an d
that rules and practices vary among republics, Beyond this, there is stil l
to be developed a working inter-city and inter-republican information networ k
to help in planning and in improving the inter-regional allocation of labor .
These problems are at least to some extent addressed in a December 198 3
directive of the USSR Goskomtrud .

This concerns the improvement of plannin g

and coordination among the republican labor organs and further control ove r
and coordination of their activities by the USSR Goskomtrud .

It calls fo r

further study and dissemination of successful practices . It will presumabl y

lead to greater uniformity in practice, though some of the variations base d
on differences in republican laws would not be affected by this measure . I t
is noteworthy, however, that this instruction is issued by Goskomtrud itsel f
rather than by some higher authority and, further, that it stresses increasin g
connections with general economic organs, trade unions, organs of people" s
control and ministries ; strengthening ties with research organizations ; an d
raising the role and authority of the labor organs . 157

That is, the authorit y

of the labor bureaucracy is to be enhanced by its actions and influence s

rather than by additional legal powers .
Measures directed toward enterprise management in the effort to improv e
productivity and reduce hoarding of labor include both administrative control s
and improved incentives for economizing on labor . The labor bureaucrac y
appears to be helping with both . From the point of view of the managers ,
such assistance is no doubt often felt as interference in their business . To

70

the extent that the placement bureaus take over from management the responsibility for finding jobs for redundant workers, this should be welcomed as th e
elimination of an unnecessary deterrent to the release of excess workers . Fo r
the long run, economists such as Antosenko place more hope in improvement of th e
economic mechanism and the incentives to economize on labor than on administrative controls . The main measure here--the use of technically substantiated ,
norms for wages per ruble of output set ahead for several years--is the mai n
hope . It is not clear whether the labor organs are playing a role in settin g
these norms . Also, it is too early to know how effective the new system wil l
be .

VI . CONCLUSION S

As this report has shown, the Soviet authorities have created a labo r
bureaucracy and a placement service and have carried out a wide variety o f
measures designed to increase the labor force and, especially, to improve th e
effectiveness with which it is used . Clearly, they see labor as a seriou s
constraint to possible future rates of growth while growth, at least for th e
rest of this century, increasingly depends on improving productivity .
The net effect of all these measures has no doubt been positive . Ther e
has been no massive reallocation of labor but there has been at least modes t
improvement in the situation . The crude birth rate has risen slightly in th e
past few years, though this may be explained more by the coming to motherhoo d
age of the postwar baby boom than by pronatalist measures . At the same time ,
the rate of increase in the female labor force has matched that of the mal e
labor force, with females at 51 percent of all wage earners and salarie d
workers from 1970 through 1983 . 158

The proportion of persons of pension age

71

who remain in the labor force has increased (Table 1 above) . Goodman an d
Schleifer (1983, p . 339) estimate that labor force participation rates wil l
increase during the 1980's by 5 percentage points for males and 2 .5 percen tage points for females .
Although all enterprise plans are now required to include targets fo r
mechanization and the reduction of manual labor, progress has been slow .
During 1975-1983 the proportion of workers in industry performing manua l
labor declined on average by only seven-tenths of a percentage point a year .

15 9

The reports of the labor bureaus and labor organs suggest that there ha s
been some reduction in turnover, a reduction in the time lost between jobs ,
a better matching of individuals to jobs, and a reduction in the numbe r
changing jobs who also change occupation and, hence, need retraining . The y
also indicate that some progress has been made in squeezing out excess labo r
from some enterprises and reallocating workers to new enterprises and other s
with a serious shortage of labor .
There is no direct evidence on the extent to which enterprise managemen t
is responding to the changes in incentive rules aimed at economizing on labor .
In at least many enterprises, the very shortage of labor itself must hav e
imposed efforts to improve efficiency . There is no evidence that consume r
service hours have yet been extended to such an extent as to eliminate th e
pervasive need for workers to leave the workplace with permission of manage ment to accomplish everyday chores .
General indicators of some success of the attack on the problems o f
labor shortage, regional imbalances and misallocation are to be sought in th e
trends in labor productivity and in migration patterns . There has been a
modest recent upturn in labor productivity . Social labor productivity for

73

the economy as a whole was rising at an annual average rate of 4 .5 percen t

in 1970-75, 3 .3 percent in 1975-80 and dropped to 3 .6 percent in 1981, the n
rose to 3 .3 percent in 1983 and 3 .5 percent in 1983 . In industry, th e
annual increase in labor productivity was 6 percent in 1970-75, 3 percent i n
1975-80, 3 percent in 1981, 3 percent in 1983 and 3 .5 percent in 1983 .

15 0

The migration patterns in recent years have begun to change from directions contrary to needs to directions in line with the needs of the economy .
Thus, since 1975 there has been a net inflow into Siberia, while until the n
there had been a net outflow . There is still, however, an enormous turnover .
During 1971-77, 11 .3 million persons arrived in Siberia and 9 .5 million person s
161
left, for a modest net gain of 1 .8 million .

Efforts now are being made t o

162
try to make the Siberian population more stable .

In Murmansk, in the Fa r

North, in 1983 for the first time local births outnumbered the arrivals fro m
163
other parts of the Soviet Union ,
an encouraging sign of increased populatio n
stability .
At the same time, there has begun a small net outflow from the Centra l
Asian Republics . 164

Part of this may be explained by the relatively recen t

practice of establishing "trusts," mobile labor detachments of workers fro m

Uzbekistan or Tadzhikistan to perform irrigation and other land reclamatio n
work, to create new farms and build housing and other social infrastructur e
in the Non-Black-Earth Zone and the Volga Basin under the authority of Centra l
Asian ministries.165 It is apparently easier to get the native Muslim population of Central Asia to move in groups than as individuals . Furthermore ,
the Central Asians have more experience in land reclamation than most Russians .
It is not clear whether the intent is that the members of these trusts are t o
settle on some of the farms they create, to move on to reclaim other areas ,
or to return to their native republics .

73

In part, too, the outmovement from Central Asia is made up of Russian s

and other Europeans who had earlier--voluntarily or involuntarily--moved to
Central Asia . The 1970 census showed that non-Muslim groups made up 59 per cent of the population in Kazakhstan, 40 percent in Kirgiziia and not quit e
166
30 percent in Tadzhikistan, Turkmenistan and Uzbekistan .

Thus, there seems

room for further reemigration of these groups while still leaving enoug h
Russians to hold the controlling positions . This will depend, however, to a
considerable degree, on whether enough native Muslims can be induced to leav e
the farms (which are overmanned) and fill the city jobs which the non-Muslim s
would leave .

While progress is being made, it is quite modest in relation to the ide a

of a massive reallocation of labor and a once-for-all squeezing out of hoarde d
labor . Some have pointed out that the placement service means the mechanis m
is in place which would facilitate a larger scale administrative reallocatio n
of labor . It seems to me this would entail more drastic measures than th e
administration is willing--and perhaps able--to undertake . First, the place ment service is not large enough to conduct serious massive reallocatio n
unless there is a freeze on all unauthorized job changes . Presumably thi s
would require sanctions against those violating it of the kind that accompanie d
Stalin's job freeze of the World War II period . Short of a war, it seems
unlikely that the present leadership--which considers it a serious strengthening of discipline to reduce an absentee's vacation period for his absenteeis m
but not below 13 working days--would contemplate antagonizing the workers b y
such measures .
Secondly, a massive reallocation would entail what would probably be

forced movement of large numbers of young Muslims to the cities of Centra l

Asia and outside to Siberia and other labor-short areas . While some Western

74

writers have suggested a massive reallocation of Central Asians to Siberi a

would be a solution, I see no evidence that this is being contemplated b y
Soviet demographers, economists or political leaders . What we seem to se e
is a considerably more sophisticated and gradual solution . Thus, Perevedentsev ,
for instance, advocates the following scenario . Some of those who have recentl y
left the farms for the cities of the Non-Black-Earth Zone should be induce d
to move back to the farms (which will have been improved) while their job s
in the cities of the Zone could be filled with Russians and other non-Muslim s
from Central Asian cities . The urban jobs in Central Asia should be fille d
by young Muslim natives . These would have to be lured to leave thei r
families and farms, in part by bringing appropriate vocational educatio n
to their villages . 167

(Muslim parents do not want to send their eight h

grade graduates, especially their daughters, to city schools and dormitories .) Possibly in the longer run, once more native Central Asians hav e
acclimatized themselves to urban life, some may become available for wor k
in cities outside of Central Asia for apparently the move from one city t o
another is much less difficult than the initial move from the countryside t o
the city . And the rate of growth of population will

continue to be highe r

in Central Asia than in the Slavic Areas of the country .

75

APPENDIX A : CHRONOLOGY OF THE DEVELOPMENT OF THE JOB PLACEMENT SERVIC E

This chronology covers the period from the first official suggestio n
that labor organs be established by the Republics in 1966 to the 1980 Stan dard Statute on the Placement Bureaus and a 1983 Goskomtrud decision . Information is much more readily available on the RSFSR than on the other republics :
hence, more detail can be provided concerning the RSFSR .
33 December 1966 .

In a lengthy decree of the Central Committee of th e

CPSU and the USSR Council of Ministers on Measures for the further growth i n
the productivity of labor in industry and construction, it was indicate d
(article 34) that it would be expedient to establish republican State Committees for the Utilization of Labor Resources and local labor organs . I n
autonomous republics, there were to be Administrations of the Council o f
Ministers of the autonomous republic for the utilization of labor resources ;
in krais and oblasts there were to be departments for the utilization o f
labor of the executive committees of the krai and oblast Soviets of deputies ,
with plenipotentiaries in the largest cities and raions .
The republican State Committees and their local organs were to (a) wor k
out with ministries, enterprises, etc ., measures for retraining and reallocation of labor ; (b) place citizens in jobs and provide information on th e
needs for workers ; (c) study the composition of the able bodied populatio n
not at work and work out with planning and economic organizations measure s
for the rational utilization of labor ; (d) conduct the organized recruitmen t
of workers and resettlement of families . .

76

Coordination of the work of the republican committees was placed i n

Gosplan, in which a new Section for Labor Resources was created (article 35) .
Normativnye akty

ispol'zovaniiu trudovykh resursov, 1973, pp . 33-34 ;

SP SSSR 1967 g . No . 1, st .
11 February 1967 .

1.

Statute of the RSFSR Council of Ministers establishe d

the RSFSR State Committee for the Utilization of Labor and local organs fo r
labor utilization (administrations in autonomous republics, departments for labo r
utilization of the executive committees of krai, oblast and Moscow an d
*
Leningrad city Soviets of workers) . The decision on whether and where t o
locate plenipotentiaries was left to the local labor organs .
1n addition to the functions listed in the December 1966 decree, thi s
decree indicates the labor organs are to participate in planning the sitin g
of new enterprises and in general planning for the best use of the population .
Since organized recruitment and resettlement were to be conducted by th e
new labor organs, the republican and local administrations for resettlemen t
and organized recruitment were abolished .
The republican state committee and the local organs for labor utilizatio n
are maintained by the RSFSR state budget .
SP RSFSR 1967 g . No . 3, st .
37 May 1967 .

Normativnye akty . . ., 1973, pp . 61-63 ;

15 .

Decree of the RSFSR Council of Ministers on the Stat e

Committee for Labor Utilization of the RSFSR Council of Ministers sets out th e
details of the functions and operations of the RSFSR State Committee on Labo r
Utilization . These include placement in jobs and providing information to th e

* The Moscow oblast and Moscow city and Leningrad oblast and city labor organ s
were made "administrations " by the RSFSR goskomtrud, Normativnye akty . . . ,
1973, n . 1, p . 63 .

77

public about vacancies . SP RSFSR 1967 g ., No 10, st .

1972, pp . 63-69 .

58 ; Normativnye akty . . . ,

Normativnye akty indicates (p . 63) that similar decrees wer e

issued in other republics .

June 1967 .

By the end of the month, State Committees on the utili-

zation of labor resources had been established in all fifteen republics .

Hauslohner, 1981, p . 8 .
3 October 1967 .

Decree of RSFSR Goskomtrud on the administration o f

placement and information on vacancies within Goskomtrud . This administration consists of the Section for placement of the population, the Section fo r
the placement of young people, and a section for information services .
Functions include (a) organizing the placement of skilled workers, whit e
collar workers, specialists and other persons needing placement ; (b) stud y
statistics of labor resources and their utilization and work with intereste d
institutions on measures to bring in persons not employed ; (c) verify
(proverka) the needs of enterprises for labor and their preparedness t o
accept workers referred to them ; (d) organize direction to work in line wit h
their training of specialists finishing secondary specialized and highe r
education without interruption of work ; (e) participate in planning the allocation of graduates of, and leavers from, general secondary schools and tak e
measures to see plans are fulfilled ; (f) organize oversight (kontrol') on th e
timely preparation of enterprises to receive young workers and to take measures to retain them ; (g) organize-information service on available job s
throughout the republic ; (h, i, j, k, 1) refer to duties to supervise an d
instruct local labor organs .

Normativnye akty . . .,

1973, pp . 75-77 .

78

14 November 1967 .

RSFSR Goskomtrud decrees instructions on organizin g

placement and information . Placement, as a rule, takes place through place ment points (punkty po trudoustroistvo) established by the administrations an d
departments for labor utilization .

Normativnyeakty . . ., 1973, pp . 467-470 ;

Soviet Statutes and Decisions, Winter 1978-79, pp . 116-133 .

7 March 1969 .

The Beloruasian Goskomtrud established "assembly points "

(sbornyipunkt) in raion centers to perform services in connection with th e

signing of labor contracts, provision of travel documents, payment of trave l
per diem allowances, etc . These services appear at this time to relate mainl y
to organized recruitment .
31 May 1969 .

Normativnye akty . . ., 1973, pp . 98-100 .

RSFSR Goskomtrud establishes urban labor placement bureau s

which are to be self-financing . Bureaus are to be established by, and sub ordinate to, labor organs in cities of over 100 thousand population, wher e
expedient . The latter seems to mean where there is a need for placemen t
services on the part of the population and where self-financing is feasibl e
(profitable) . Rates charged enterprises for advertisements placed by th e
bureaus and for persons referred and accepted were established 16 May 1969 b y
RSFSR Ministry of Finance .

Normativnye akty . . .,

1973, pp . 499-508 ; Sovie t

Statutes and Decisions, Winter 1978-79, pp . 133-136 .

1969 .

Placement bureaus were also established in the Kirgiz an d

Estonian Republics . Maslova, 1976, p . 170 .

19 January 1970 .
RSFSR .

A Central Placement Bureau was established in th e

Normativnye akty . . ., 1973, pp . 117, 508 .

By 1970, there were 134 placement bureaus in ten of the fifteen republics :
the RSFSR, Uzbekistan, Kazakhstan, Lithuania, Kirisia, Tadzhikistan, Turkmenia,

79

Estonia, Moldavia, and Latvia . Kotliar

Trubin, 1978, p . 39 ; Hauslohner ,

1981 ; Maslova, 1976, p . 170 .

15 October 1970 .

The RSFSR Council of Ministers set up the "Ufa-Kaluga "

system as an experiment, under which all placements (with certain exceptions )

could be made only through the placement bureaus in the cities of Ufa (i n
the Baskir autonomous republic) and Kaluga (in Kaluga oblast) . The main exceptions were scientific workers, civil servants, and persons for whom there wer e
other established forms of organized placement (orgnabor, direction o f
graduates, etc .) The RSFSR Goskomtrud was to study the results and t o
report to the RSFSR Council of Ministers in the first quarter of 1972 .
Normativnyeakty

3 November 1970 .

1973, pp . 511-514 .

Prikaz of RSFSR Goskomtrud on improving work o f

information on vacancies and placement includes provision that enterprises ca n

advertise openings in newspapers, over radio or television or display i n
public places only with the permission of the labor organs, and only under th e
address of the labor organ . In cities where placement bureaus exist, announce ments of need for workers in newspapers, radio, television, are made only i n
the name of the placement bureau without the name of the enterprise an d
notices on walls of placement bureaus are not to include the address of th e
enterprise .

Normativnye

17 October 1973 .

akty . . .,

1973, pp . 516-517 .

The RSFSR Council of Ministers rescinded that part o f

the decree of 15 October 1970 providing for compulsory mediation in Ufa an d

Kaluga . SP RSFSR, 1973, No . 33, Art . 153, as summarized in Sots . trud, 197 3
No . 1, p . 158 . Apparently, however, this was not implemented . Hauslohner ,
1981, p . 36 .

80

1974 .

Urban placement bureaus functioned in all republics excep t

Armenia and Azerbaidshan . In the latter, placement was done by representative s

of the committees for the utilization of labor .
There were 378 placement bureaus, of which 113 were in the RSFSR . I n
most republics, there were placement bureaus in all cities with a population o f
over 500,000 and in most cities with a population between 100,000 and 500,000 ,and
several republics there were bureaus in cities of 50,000-100,000 population .
Forty-three of the bureaus operated on the Ufa-Kaluga principle . Maslova ,
1976, pp . 170, 196 .
17 August 1976 .

The system of labor organs was unified under the union -

republican State Committee for Labor and Social Questions of the USSR Counci l
of Ministers (formerly the State Committee of the USSR Council of Minister s
for Labor and Wages, established in 1955) . The Republican State Committee s
for the Utilization of Labor were, at the same time, renamed State Committee s
for Labor . The labor organs were given additional functions in the area o f
regulating the conditons and organization of labor and supervision over th e
use of labor at the enterprise level .

Trudovoepravda

Kostin, ed ., TrudovyeresursySSSR, 1979, p . 339 ;

SSSR, 1976, No . 34, st . 487 ; SP SSSR,

pp . 97-98 ;

Vedemosti Verkhovnogo Sovet a

1977, No . 36, st .

170 ; CDSP XVIII No . 33 ,

p . 31 and No . 36, p . 30 .

1977 .

The 1977 Soviet Constitution mentions the placement service as on e

of the mechanisms by which the citizen"s right to work and to choice of occupation is guaranteed (article 40) .
39 April 1979 .

The USSR Goskomtrud issues the first Standard Statute o n

the organization and operation of the Placement Bureaus . Gostomtrud SSSR ,

Biulleten', 1979, No . 8, pp . 6-9 .

81

13December 1979 .

Decree of CPSU Central

Committee,

USSR Council o f

Ministers, Presidium of USSR Supreme Soviet, All-Union Council

of Trade Union s

"On the Further Strengthening of Labor Discipline and the Reduction of Labo r
Turnover" calls for (among other things) the local Soviet executive committee s
to further develop the network of job placement bureaus and to improve thei r
work ; to apply more broadly the experience of cities in which the provision o f
information to the public concerning manpower requriements is carried out wit h
the help of local labor organs, Pravda and Izvestiia, 13 January 1980 in CDSP ,
XXXII, No . 3 ., pp .

14-15 .

This decree also ordered the USSR Goskomtrud t o

draft a new Standard Statute on the placement bureaus with the participatio n
of the republican Councils of Ministers and to obtain the approval of th e
Central Trade Union Council, the Ministry of Justice and the Ministry o f
Finance . (Slider, 1981, citing SobraniepostanovleniiSSSR, 1980, No .

3,

p . 47 .
1December 1980, the USSR Goskomtrud, in accord with the decree of 1 3

December 1979, issues a new Standard Statute on the Job Placement Bureaus .
Goskomtrud SSSR, Biulleten', 1981, No . 3, pp . 3-6 .
By July 11, 1980, there were placement bureaus in all replublics . There
was a total of 633 bureaus . There were bureaus in all cities with a populatio n
over 500,000, in 93 percent of the cities with a population of 100,000-500,000 ,
in 31 percent of the cities with a population of 50,000-100,000, and 5 .3 per cent of the cities with under 50,000 . Most of the cities without bureaus wer e
in the RSFSR as the RSFSR legislation provides for bureaus only in cities o f
100,000 or more . Maslova, 1981, p . 67 ; Normativnye akty . . ., 1973 . p . 499 .

83

December 1983 .

The USSR Goskomtrud issued a decision calling for th e

improvement of planning and coordination among the republican labor organ s

and further control over and coordination of their activities by the USS R
Goskomtrud .

Sots . trud .,

1983, no . 13, pp . 118-30 .

83

APPENDIX B : INCENTIVE PROVISIONS IN THE RULES FOR THE FORMATIO N

OF THE BONUS FUND *

The bonus fund is used for payment of bonuses and othe r

types of incentive payments to employees of enterprises . It i s
formed from the enterprises's profits . The amount of the p rofit s
that can be put into the bonus fund is governed by rules whic h
are related to the success criteria established for manageria l
bonuses and which are intended as incentives for management t o
perform as the center would wish .

The rules have changed sub-

stantially over time in response to different problems (sometime s

created by one or another of the rules themselves) and are quit e
complex . They are outlined here .
1936-1965 .

During this period, the bonus fund was calle d

the director"s fund (until 1955) and later the enterprise fund .
There was one fund which was used for three purposes : bonuses ;
housing and other cultural-social measures ; expansion of production .
The rule for calculating the amount of profit that could b e
retained at the enterprise for the enterprise fund was of the form :

B = a P + b(P'-P)

if P'> P

(1 )

where B = bonus fund, achieve d

P = planned profi t
P' = actual profi t
a, b are the coefficients .
In the mid-1950's, a was between

.01 and .06 and b was betwee n

0 .30 and .50 depending on the industry, with lower rates in ligh t
than in heavy industry . The enterprise fund was not to excee d
5 per cent of the
.1 wage bill for productio nworkes
*
Notes for Appendix B are placed at the end of this Appendix .

84

Clearly, this formula made it more attractive to overfulfil l

an easy plan than to fulfill a hard plan . Every subsequent set o f
rules includes penalties for overfulfillment as well as for under fulfillment of targets .
1965-1970 .

The 1965 economic reforms included a major chang e

in the rules for determining the bonus fund . The amount of profit s
that could be retained in the bonus fund was now based on performance with respect to (1) the increase in planned sales (or, in some
cases, in total profits) and (3) the rate of profit (profits as
percentage of fixed and working capital) . Coefficients relatin g
to these targets were applied to the planned wage bill for th e
current year .
The rule for establishing the planned bonus fund may b e
expressed a s
B = W (k s S + k r R)

(3 )

Where
B = the planned bonus fun d
W = the planned wage fun d
S = planned sales (or total profits )
R = rate of profi t

k s and k r

are the coefficients set by the ministries for group s

of enterprises .

In one example cited in an official source, an amount equal t o

0 .3 per cent of the wage fund was transferred from profits t o
the bonus fund for each 1 per cent increase in planned profit s
and 0 .6 per cent of the wage bill for each 1 per cent of planne d
profit rate ; i .e .,

k s was 0 .3 and k r was 0 .6 .

85

If the plan was overfulfilled the bonus fund was increase d

but by means of coefficients 30 to 40 per cent below those for pla n
fulfillment . If the plan was underfulfilled, the bonus fund wa s
reduced by at least 3 per cent for each 1 per cent by which the
indicator

in question was underfulfilled . Thus, the actua l

bonus fund was :

B' = B+ W [ak s (S'-S) + ak r (R'-R)]

(3 )

Wher e
Primed symbols refer to achieved value s

= 0 .6 - 0 .7

where the values in parentheses are >

= 1 .0

where the values in parentheses are =

= 3 or more

where the values in parentheses are <

The bonus fund could not exceed actual profits . And finally ,
the right to transfer profits to the bonus fund depended upon th e
enterprise meeting the planned output of a list of key product s
established by the ministry ; the ministry was to determine i n
each case how much the bonus fund was to be reduced for failin g
to fulfill this part of the plan . ?
It should be mentioned that since 1965, there are thre e
funds (in contrast to the single enterprise fund before 1965) :
the bonus fund (fond material'nogo pooshchreniia), in which ou r
interest lies ; the fund for housing and social-cultural measures ;
and the fund for development of production or the enterprise invest ment fund . The housing and social-cultural fund is generally forme d
in much the same way as the bonus fund . We are not concerned wit h
the investment fund . Also since 1965, the bonus fund is the major

source of bonuses for managerial and technical personnel, who n o

longer receive any bonus payments from the wage bill ; wage earner s
may receive incentive payments from both . 3
The 1965 system was intended to induce enterprises to accep t
demanding but realistic plans . There was a certain "automaticity "
sytem4 to the plan and Adam considers it a genuine fund-creatin g
as opposed to a fund (or plan) corrective system .
A number of practical (technical, institutional, political )
problems were faced in implementing this system in the course o f
transferring enterprises to the new system . 5

One specific featur e

of the rules themselves turned out to be counterproductive . Linkin g

the bonus fund to the current wage fund dampened incentives t o
increase profits or the profit rate by reducing labor costs since

reduced wage bill would mean a smaller base to which to apply th e

coefficients for sales (or profits) and profitability .
1971-75 . 1

This period witnessed substantial changes in th e

treatment of bonus funds, changes which, with various modifications ,

persisted at least through 1983 . During 1971-75, the three principa l
targets determining bonus funds were (1) growth in the value of sale s
(growth in value of output in planning calculations) ;

(3) rate o f

profit ; and (3) growth in labor productivity . In calculating th e

initial size of the bonus fund in the five-year plan directives ,
the first was given a weight of 40 per cent and the second a weigh t
of 60 per cent . Labor productivity was taken into account only i n
deviations from these directives over time . In some cases, an additional target could be established for increasing the share of first

87

quality products . In addition, enterprises were entitled to kee p

part of any above-plan profits and enterprises in heavy industr y
could supplement their bonus funds from profits from the highe r
prices allowed for improved products and from increases in th e
output of consumer goods . The enterprise bonus fund could, however ,
be reduced by the ministry if the enterprise failed to fulfill th e
planned output of a list of key products .
In this period, the fund-forming coefficients were no longe r
applied to the planned current wage bill but to the wage bill o f
the last year preceding the current five year plan, i .e . 1970 .
This would seem to eliminate the disincentive to increase profit s
or productivity through reduction in labor costs of the 1965 rule .
Beginning with this period, the absolute size of the planne d
bonus fund for each ministry is determined centrally for each yea r
of the five year plan and, in turn, the ministries set the size o f
bonus funds for administrative divisions and associations withi n
their jurisdiction and the associations set the bonuses for eac h
enterprise under them .

The size of the bonus fund is set mor e

in relation to the planned wage fund than to the targets for growt h
of sales and profit rate to provide a certain degree of equity amon g
enterprises and industries as well as to account for varying proportions of managerial-technical personnel . Apparently, then, the fund determining coefficients were calculated after determination of th e
size of the bonus fund on the basis of the planned size of the bonu s
fund and the plans for growth in output or sales, profit rate an d
labor productivity8

Presumably there was considerable variation

88

among the coefficients applicable to various groups and individua l

enterprises .
In principle, the coefficient for increases in the value o f
sales was smaller for enterprises which were planned to increas e
output on the basis of significant new capacity financed by centra l
capital investment than for enterprises which were to increase out put largely on the basis of better utilization of existing capacity .
The coefficients included in two official examples were, in per cen t
of the 1970 wage bill : (1) for each one per cent increase in sales ,
0 .341 in enterprises whose expansion is helped by central investmen t
and 0 .513 in others ; (2) for each percentage point of profit rate ,
0 .310 ;

(3) for each percentage point by which the rate of growth o f

labor productivity exceeded (fell short of) the five-year pla n

target for the given year, 0 .5 . 9
Centrally set rules provide that the maximum bonus fund coul d
be no higher a percentage of profits than in 1970 and the minimu m
was 40 per cent of the planned fund, provided the profit necessar y
to cover this was earned .
Beginning in this period, ministries and associations are
allowed to hold up to ten per cent of the total bonus fund allotte d
them as a central reserve to use for such purposes as rewards fo r
increasing the share of highest quality products and to shore up a n
enterprise's bonus fund when it is inadequate for acceptable reasons ,
such as down time for introducing new technology or producin g
unprofitable but needed consumer goods .

89

Since 1971, the calculation of the bonus fund is performed i n

three stages . Stage one occurs during the construction of the fiv e
year plan and consists in establishing for each ministry, associatio n
and enterprise the absolute size of the bonus fund for each year o f
the five year plan and the fund-determining targets and coefficient s
for each target which would lead to the planned bonus fund if th e
targets were exactly fulfilled .
Stage two occurs during the process of drawing up the actua l
annual plan for, let us say, 1974 . If the enterprise proposes (an d
the proposal is accepted) precisely the same targets in its annua l
plan for 1974 that were confirmed in its five-year plan for 1974 ,
no changes are made . If, however, the enterprise takes on large r
(smaller) targets in its actual plan for 1974, it is entitled t o
a larger (smaller) bonus fund . The change is based on the exten t
of changes in the targets, multiplied by the relevant coefficients .
The general formula for the planned bonus fund in any annua l
plan during 1971-75 may be written as

: 10 /

B = B + W o [k v (V-V) + k p (P - P) + k l (L-L)]

(4 )

where :
B is the size of the bonus fund in the current annual plan ,
say ]97 4
B is the size of the bonus fund for 1974 approved in the fiv e
year pla n
Wo is the total wage bill in the last year preceding th e
current five year plan (1970)

90

V, P, and L are the current year's (1974) actual targets fo r

increase in the value of output, the profit rate, and fo r
the increase in labor productivity .
V, P, and L are the corresponding five year targets (establishe d
in 1971) for the current year (1974) .
k v , k p , and k l

are the corresponding coefficients

.

The third stage is the computation of the size of the fina l

incentive fund actually transferred from the enterprise's profits .
This depends on the degree of fulfillment of the (revised) planne d
targets . In this step, a sales target is used instead of outpu t
and the net profit rate (net of capital charges) is used instea d
of the gross profit rate . Finally, the coefficients applied t o
targets that have been overfulfilled (underfulfilled) must be a t
least 30 per cent smaller (larger) than the coefficients used i n
stage two and that would be applicable for exact fulfillment .
The formula for this final stage is :
B' = B + W o

[a s k s (S'-S) + a p k p (P a "- P n ) + a l k i

(L"-L)]

(5 )

where the primed symbols are achieved values and the unprimed one s
are plan values (from stage two) an d
S is sales revenu e
P n is net profi t

0 .7 or less

>

1 .0 when the expression in parentheses is

1 .3 or more

< 0

91

1976-1980 .

Ministries were permitted to set the most appro-

priate for their enterprises of the targets listed below . (1) growt h
in labor productivity ; (3) raising the share of highest qualit y
products ; (3) profit rate ; (4) growth in output (in initial calculation) or sales (in final calculation) or in profits ; (5) reducin g
the cost of production ; (6) mastering of new productive capacit y
in accord with the normal period for mastery . As a rule, no mor e
than three targets should be set for a given enterprise, but i n
some cases four might be justified . The instructions state that ,
in line with the emphasis of the current plan on effectiveness o f
production and quality, the first two targets should, as a rule ,
be included among the 3 or 4 targets for any given enterprise .

11 /

In addition, enterprises are expected to meet contract s

concluded with suppliers with respect to product assortment an d
time of delivery . Failure to do so entails a reduction in the bonu s
fund and, since 1977, in the bonuses for top managers .
Th e system in use in this period entails the same three stage s
The
as during 197075 . However, instead of applying the coefficients t o
the wage bill of the year preceding the five year plan period, the y
are applied to the planned incentive fund of the year preceding th e
current five year plan period, i .e ., 1975 . Thus, in formulas (4 )
and (5) above, one would substitute B o for W o .
The coefficients for determining changes in the bonus fun d
from that originally planned, as established in the legislation o f
December 3, 1976 seem fairly uniform, although some deviations coul d
be made from the following by the ministries . For most industries,

93

if the annual plan adopted for, say, 1978 exceeded the five-year pla n
for 1978, for each one percent of increase, the bonus fund was raise d
by two per cent of the 1975 bonus fund in the case of both labo r
productivity and of the increase in the share of highest qualit y
products . In consumer goods indutries (light, food, meat and milk ,
fish), the coefficient was one per cent for labor productivity an d
3 .5 per cent for product quality, 1

The rewards for proposing an ambitious plan in stage two an d

fulfilling it were increased in January 1977 in line with the campaig n
to elicit ambitious "counter plans" by doubling the coefficients use d
for calculating the bonus fund when the counter plan targets excee d
the original
.14
five year pla ntarges
1981-1985 .

The major targets for determining the bonus fund ar e

again (1) growth in labor productivity and (3) growth in the share o f
products of highest quality . Alternative targets may be set by th e
ministries where appropriate . These include : economies of materials ;
increase in return on assets ; improvement in the shift index or i n
the profit rate ; reductions in the unit cost of output ; and in th e
extraction industries, growth of output in physical terms . Th e
number of fund determining indicators should not exceed two, or i n
some branches three . Apparently the targets must (always?, usually? )
include that for labor productivity . Ministries, although they may
differentiate the size of the coefficients for one or another target ,
must set a minimum for labor productivity of 50 per cent of the bonu s
fund as established in the five year plan control figures .15

93

As in the previous period, there is a reduction in the bonus fun d

(of at least one per cent for each per cent shortfall) if contracts ar e
not met but, and this is new, if contracts are fully met on a runnin g
basis and in each quarter, the bonus fund is increased by 10 per cent .
The role of profits appears to have been enhanced . Although
profit is not a major' fund determining target, the coefficients fo r
the targets are now as a rule applied as a percentage of profits .
This makes profits an additional fund-forming indicator . 16

As a n

exception, the base year (1980) wage bill provides the basis fo r
establishing the bonus fund in the food, meat and milk, fishing an d
certain other extractive industries .17

Ministries are now require d

to pay to the budget the planned deduction from profits, regardless o f

whether the planned profits were actually earned and the enterpris e
bonus fund is increased or decreased in line with overfulfillment o r
underfulfillment
.18
of the plan fo rpofits
An extra stage has been added to the procedure . Now at the stag e
of determining the five year plan, there are incentives for an enter prise to increase the five year plan above the original control figure s
as well as, later, in the process of drawing up the annual

plan .

Th e fund-correcting coefficients are said to be the same for al l

The
branches and enterprises.20

For each percentage point by which th e

adopted five year plan for a given year for labor productivity exceed s
the original five-year-plan control figure for that year, the coefficient is increased, as a rule by four times, but for each point b y
which the adopted plan falls short of the control figures, the coefficient is reduced by three times . To stimulate later counter plans to

94

exceed the tasks of the adopted five year plan, the coefficient fo r
labor productivity is increased by three times . For other target s
(except for quality of products) the corresponding adjustments t o
the coefficients are, respectively, two times, 1 .5 times an d
1 .5 times .
Fo r each per cent by which the share of highest quality product s
For
in the annual plan for a given year exceeds that in the five year pla n
for that year, the incentive fund for that year is increased b y
3 per cent of the planned bonus fund . (I have not found informatio n
on the coefficients used in the initial five year planning stage . )
1n the case of consumer goods, an additional amount of up to one pe r
cent to 1981 and two percent in 1981 and following years could b e
added to the bonus fund for each percentage increase in the shar e
of highest quality products, up to a total not to exceed 35 per cen t
of the bonus fund . As before, up to 70 per cent of the profits fro m
the higher prices set for improved quality products (primarily applicable to producer goods) could be put into the bonus fund . Penaltie s
with respect to quality have been established . Thus, if consumer good s
are returned because of low quality, for each percentage point o f
returns, the bonus fund is reduced by 3 percent of the planned bonu s
fund . For above-plan production of goods of second quality, the deduction is 3 per cent (or the same percentage as for exceeding the pla n
for highest quality products if this differs and if this is one of th e
enterprise's targets) of the planned bonus fund for each percentage o f
additional production of second quality goods . There is a specia l
incentive for increasing the output of consumer goods, includin g
products for children . For increases in output of these goods above

95

the five year plan, an amount equal to up to 5 per cent (exact amoun t
to be determined by the ministry in consultation with the grade unio n
committee) of the cost in retail or wholesale prices of this productio n
may be transferred from profits to the bonus fund, the amount not t o
exceed ten per cent of the planned bonus fund .22
.

Now that the determination of the size of the wage bill is base d

on wage expenditures per normative ruble of output, any savings i n

the wage bill can be transferred to the bonus fund . At the same time ,
in cases of overexpenditure on wages, the overexpenditure must b e
23
reimbursed, and in part with funds from the bonus fund .
The amount of central reserve funds held by ministries and associations has been increased from 10 per cent to 15 per cent of th e
total incentive funds . '
1n line with the July 1979 decree on improving planning whic h
called for measures "to develop democratic principles in the manage ment of production, and to enhance the creative initiative of labo r
collectives, 25

the current rules call for ministerial decision s

regarding the bonus fund formation and uses to be made in consultatio n

with the trade union committees .

96

NOTE S
(for Appendix B )
1.

Berliner, Factory and Manager in the USSR, 1957, pp . 67-70 .

2.

Goskomtrud SSSR, Biulleten', 1966, no . 4, pp . 11-16 ; Alec Nove ,

The Soviet Economy,

N .Y . : Praeger, 3nd rev . ed ., 1969, pp . 34-36 .

The basic legislation is presented in Ekonomicheskaia gazeta,

1966 ,

no . 50, supplement .
3.

That part of the wage bill destined for incentive payments to wag e
earners is included in the bonus fund in the broad sense but i s
not calculated on the basis of profit deductions as is the bonu s
fund in the narrow sense . Goskomtrud SSSR, Biulleten', 1966 ,
no . 4, p . 22 ; 1977, no . 4, p . 30 .

4.

Jan Adam, "The Present Soviet Incentive System,"

Soviet Studies ,

July, 1980a,pp . 349-365 .

5.

Adam, ibid . and

Countries .

Wage Control and Inflation in the Soviet Blo c

N .Y . : Praeger, 1980b,pp . 137-30 ; Gertrude Schroeder ,

"Recent Developments in Soviet Incentives," in JEC, Soviet Economi c

Prospects for the Seventies .

Washington, D .C . : U .S .G .P .O ., 1973 ,

pp . 30-31 .
6.

A similar contradiction was built into the rules for formation o f

the investment fund for here the coefficients were applied to the ent e
prise ' s capital, reducing the incentive to economize on capital .

7.

This section is based on Schroeder, 1973 ; Adam, 1980a ;

Joseph Berliner, The Innovation Decision in Soviet Industry ,
Cambridge, Mass . : MIT Press, 1976, pp . 434-430 ; "O Normativak h
otchislenii ot prybyli v fondy ekonomicheskogo stimulirovanii a
ministerstv (vedomstv), ob'edinenii, trestov, kombinatov ,
upravlenii i predpriiatii na 197]-75," (dated 39 April 1971)

97

Goskomtrud, Biulleten',1971, no . 7, pp . 30-33 ; Postanovleni e

Sovet Ministrov SSSR no . 413, of 21 June 1971 (SP SSSR, 1971 ,
no . 13, st . 91) as summarized in Sotsialisticheskii trud ,
1971, no . 9, pp . 151-53 .
8 . Examples of the calculations are given in Goskomtrud, Biulleten' ,
1971, no . 7, pp . 31-31 .
9.

Ibid .

10 . For simplicity, I exclude additions to the bonus fund fo r

(1) increasing the share of first quality products, whic h
seem to be paid from the ministry's reserve bonus fund an d
(2) profits of industries from improved products and extr a
sales of consumer goods and above-plan profits . I believ e
that these are not included in the calculation of the basi c
bonus fund but are added to it . See Adam, Soviet Studie s
July, 1980a,p . 354 .
ll . Goskomtrud SSSR, Biulleten'

1977, no . 4, pp . 15-16 .

13 . Jan Adam, Soviet Studies, July 1980a,p . 355 .

13 . Goskomtrud, Biulleten', 1977, no . 4, pp . 16-17 . The coefficients for alternative fund-determining indicators are als o
given in this source .
14 . Goskomtrud, Biulleten', 1977, no . 4, pp . ll .
15 . Degree on Improving Planning

Pravda and Izvestiia ,

39 July 1979 in CDSP XXI-30, pp . 5-6 ; V . Rzheshevskii ,

"Povyshenie roli pooshchritel'nykh fondov v piatiletne m
plane," Sotsialisticheskii trud, 1980, no . 5, pp . 3-16 ;
T . V . Riabushkin i A . Z . Dadashev, Trudovyeresursyi
effektivnost' proizvodstva, 1981, p . 108 .

98

16.

S . Osadchenko, "Opyt primeneniia ekonomicheskikh rychagov i

stimulov," Voprosy ekonomiki, 1980, no . 5, pp . 49-50 ;
Rzheshevskii, 1980, p . 15 .

17.

Riabushkin i Dadashev, 1981, p . 108 .

18.

Osadchenko, 1980, p . 43-44 ; Rzheshevskii, 1981, p . 15 .

Osadchenko indicates that the larger the overfulfillment o f
the plan for profits the smaller the share remaining wit h
the ministry . Rzhevshevskii says the enterprise bonus fun d
is increased or decreased in proportion to the overfulfillmen t
or underfulfillment of the profit plan .

19.

Rzhevshevskii, 1980, p . 5 .

20.

The initial fund-forming coefficients differ between enterprise s

since they are calculated after the absolute size of the planne d
bonus fund has been determined .

21.

Riabushkin i Dadashev, 1981, p . 109 .

22.

Rzhevskii, 1980, pp . 9-13 .

23.

Rzhevskii, 1980, pp . 8-9 .

24.

Rzhevskii, 1980, pp . 15-16 .

25.

CDSP, XXXI, no . 30, p . 1 .

26.

Rzhevskii, 1981 .

99

ENDNOTE S

1 Maslova, 1981, p . 68 ; Kotliar i Trubin, 1978, pp . 79-80 . The questio n

of whether a single or double link system is preferable is under discussion .
2 The chronology of the development of the system is presented in Appendix A .
3 Peter Hauslohner has presented an extremely interesting study of th e
origins and development of the placement bureaus in "Development of the Cit y
Job Placement Service : An Innovation in the Allocation of Manpower," September ,
1981 .
4 Kostin, 1979, p . 339 ; Biulleten' normativnykh aktov ministerstv ivedoms t
SSSR,

1979, no . 1, pp . 3-7 .
5 Kostin, 1979, p . 154 ; T . Baranenkova, 1980, p . 56 ; Narkhoz-75, p . 531 ;

Narkhoz-80, p . 357 .
6 Feshbach, 1983, p . 38 .
7 Vacancies in percent of the number of wage earners and salaried worker s
in the RSFSR by branch are reported to have been as follows :
1971

197 3

Industry

1 .9

1.5

Construction

4 .1

3.7

Agriculture

1 .9

3 . 7

Trade and Catering

1 .3

1. 3

Housing and communa l

services

1 .7

1 .5

Other branches

0 .5

0 .6

The author cautions that the data are not altogether exact as some branches ,
especially those with a labor deficit, overstate vacancies in an effort t o
fill real needs while others (especially trade and catering) with good opportunities for advertising their vacancies to the public tend to state thei r
needs more accurately . Maslova, 1976, pp . 186-87 .

10 0

8 Tibor Vais, 1983, p . 9 0

9 "The Food Problem," Sotsialisticheskaia industriia, 9 April 1983 ; tr .
in CDSP XXXIV-18, p . 11 . This measure may not be calculated in the same wa y
as the " gap " discussed above .
10 . Radko in Literaturnaia gazeta, August 11, 1983, p . 13, tr . in CDSP ,
N
XXXIV-37, p . 15 . The labor force--wage earners and salaried workers and workin g
collective farm members--increased from 117 .3 million in 1975 to 125 .6 millio n
in 1980 and the rate of increase has been declining .

Vertnik statistiki ,

1984, No . 8, p . 75 . For detailed data on the size and age composition of th e

population see Murray Feshbach, August 1982 ; U . S . Bureau of the Census ,
Foreign Demographic Division, Population Projections by Age and Sex for th e
Republics and Major Economic Regions of the USSR, 1970-3000,

Internationa l

Population Reports, Series P-91, No . 36 (1979) .

11

See Gertrude Schroeder, 1983a, p . 19 ; Feshbach, August 1983 .

12 See Schroeder, 1983a, pp . 7-8 .

13
14

Kostin, 1979, p . 367 .

This is the case, for instance, in Smolensk . See Nesterovskii, 1981 .

When I inquired of the Inspector of the Smolensk labor organ whether this di d
not disrupt fulfillment of the industrial enterprise ' s plans, he replied no ,
that the use of enterprise personnel to help the farms was included in th e
plans of the industrial enterprises . He explained the need for help by th e
serious loss of population in the area during the war . (May 1983 .) Smolens k
is in the Non-Black-Earth region, where there has been a decline in th e
population and there is a serious labor shortage in relation to the emphasi s
on developing agriculture in this region .

101
15

The soft budget constraint follows from an extreme reluctance to allo w

any enterprise to fail . This stems from (a) a commitment to full employment ,
which has been interpreted as a guarantee that an individual will not lose hi s
job and (b) the difficulty of pinning responsibility on a manager for disappointin g
results when this may result from shortcomings in plans imposed on him from abov e
or arrived at through negotiations between the manager and his superiors in th e
ministry . See Janos Kornai, 1980a and 1980b .
16

Between 1928 and 1957, the manager finding a worker redundant was for-

mally responsible for finding him alternative employment . After 1957, thi s
responsibility was formally placed on the relevant ministry or republica n
council of ministers but in practice remained with the enterprise . The latte r
was recognized in the 1967 Commentary to the Labor Code . T . A . Barenkova ,
Vyzvobozhdenie rabochei sily iuluchenie ee ispolzovanie pri sotsializme,

M. ,

1974, p . 113 as cited in McAuley and Helgeson, 1978, pp . 48-49 .

17

See, e .g .', Marc Greenfiel d ' s report of his experience working as

translator in Moscow . Greenfield, 1982 .

18 . Chizhova, 1983, p . 68 .
L
19 Andreev, 1979, pp . 74-75 .
20 At a late 1983 all-union conference on demographic policy, it was recommended that an Institute of Demography be established in the Academy of Science s
and that family planning services should be established .

Sots . trud, 1983 ,

p . 137 .
21

Pravda and Izvestiia, September 6, 1981, tr . in CDSP XXXIII, no . 36, p . 14 ;

text of legislation in CDSP, XXXIII, no . 13, pp . 9010, 33 ; Goskomtrud, Biulleten '

1983, no . 10 ; Sots . trud, 1983, no . 3, pp . 101-108 .

1 03
22

Goskomtrud, Biulleten ' , 1982, no . 2, pp . 3-5 ; while there has been some

debate as to whether demographic policy should be differentiated regionally ,

these measures do not suggest such a policy has been adopted .
23

24

lzvestiia, 36 March 1983, tr . in CDSP, XXXIV, no . 13, pp . 30-31 .

When child care allowances were introduced in Hungary, 80 percent o f

those eligible withdrew from the workforce . Pressure from industry led t o
measures to encourage women to return to work and they were given the righ t
to work for wages and to receive the allowance . John F . Besemeres, 1980 ,
p . 337 (note 3), citing Radio Free Europe, Hungarian Situation Report, 1976 ,
no . 3, pp . 9-10 . In the late 1970s, the number of Hungarian women on mater nity leave amounted to 11 to 12 percent of all employed women . Vais, 1983 ,
p . 43 .
25
26

Sots . trud,

1981, no . 3, p . 8 .

Novitskii, 1979, p . 31 . Of the part-timers, 33 percent were old-ag

pensioners, 16 percent disability pensioners, 15 percent were daytime schoo l

students, and the remaining 36 percent were primarily housewives .

Ibid .

In the U . S . in 1983, voluntary part-time workers were 13 .5 percent of al l

employed .
27
28

New York Times,

14 August 1983 .

Novitskii, 1979, p . 44 .
In the summer of 1978, 11 .5 million school pupils in grades 8-10 worke d

in production training brigades, work and recreation camps, labor detachments ,

construction repair brigades and school tree farms . The value of their wor k
effort is estimated at almost 457 million rubles . A . Novitskii, 1980, pp . 35 36 . It can be calculated from Novitskii's statement that the value of the wor k
performed averaged less than 40 rubles per pupil . During the 1977-78 school

103
f
year, 15 .6 million pupils were enrolled in the 8th through 10(11)th grades o
the general secondary schools and 3 .4 million were enrolled in the vocational technical schools

(Narkhoz-79, pp . 398, 486-87 . )

29 Trudovoe pravo : entsiklopedicheskii slovar', M . Sovetskaia entsiklopediia ,

1979, pp . 433-33 .
30
31
32

Novitskii, 1980, p . 36 .
lnterview in Moscow, May 1982 .
lnterview with E . I . Kapustin, I . S . Maslova, E . L . Manevich and others

at the Institute of Economics of the Soviet Academy of Sciences, May 1983 .

33

Literaturnaia gazeta, April 6, 1983, p . 15 ; tr . in CDSP XXXV, no . 37 ,

pp . 14-15 .
34

35

Schroeder, 1983a .

That pensioners are sensitive to changes . in their income is illustrate d

by the fact that when the old age pension was doubled in 1956, the percentag e
of pensioners at work dropped from 59 percent in 1956 to under 13 percent i n
1960 . Before 1956, pensions were so meagre that few could afford to retire .
See J . G .

36
37
38

Chapman, 1970, p . 104, and Bernice Q . Maddison, 1968, pp . 195-96 .

L . Chizhova, 1983, p . 65 .
lnterview with Antosenkov, May 1983 .
Goodman and Schleifer, 1983, p . 337 .

39 E . S .Rusanov, 1971, p . 35, cited in McAuley and Helgesen, 1978 .

40

Schroeder in JEC, 1983, pp . 79-80 . As is pointed out below, targets fo r

reduction of manual labor are already incuded in enterprise plans .

104

41 Several labor organs have reported working out labor balances fo r

their oblast or republic . See, e .g ., the reports in Sots . trud, 1971, no . 13 ,
pp . 114-130 ; 1978, no . 3, pp . 100-104 ; 1980, no . 9, pp . 90-93 ; 1981, no . 5
pp .

34-39 .
42

Ekonomicheskaia gazeta,

1981, no . 4, p . 10 ; Izvestiia, 39 March 1981 ;

Schroeder, 1982, p . 69 .
43"O rabote gosudarstvennogo komiteta RSFSR po trudu po rassmotrenii u
predlozhenii ministerstv i vedomstv o razmeshchenii novykh i rashireni i
deistvuiushchikh predpriiatii," Goskomtrud SSSR,

Biulleten'

1983, no . 5, pp . 35- 2

Antosenkov reports that in 1981 the goskomtruds of the RSFSR, Belorussian SSR an d
Ukraine SSR reviewed about 500 proposals of ministries and administrations fo r
new construction, extension or reconstruction of existing enterprises an d
disapproved almost one-third of them .
44

Trud, 11 December 1981 .

Kostin, 1979, pp . 367-68 ; E . I . Manevich, 1981, pp . 55-65, tr . in CDS P

XXXIV, no . 8, p . 5 ; Perevedentsev, 1983, p . 5 .

46 Kostin, 1979, pp . 267-68 .
46

In Karanganda Oblast of the Kazakh Republic only 360 people were sen t

from the cities to farm work in 1981, compared with 10,000 in 1979 . A . Korkin ,
First Secretary of Karaganda Oblast, 1983, pp . 18-19 . In Kurgan, the numbe r
of outsiders sent to the farms was reduced to zero while in Moscow, Leningrad ,
Novosibirsk and Vladivostok, research institutes are obliged to send thei r
scientists to farms and warehouses .

Sovetskaia Rossia, 10 March 1983, tr .

CDS P

XXXV, no . 18, p . 15 .
47

E .g ., the following statement about this effort in Smolensk : "The party

organizations will also in the future do all in their power to ensure that eac h
wage earner, salaried worker, engineer, school and college student will participate with heart and mind in the great affairs of agriculture, will not be a

10 5

spectator but a direct participant in the gratifying transformation takin g

place by the will of the party and the people in the Non-Black-Earth region ,
in the native land of the Smolenskers ." Nestorovskii, 1981, p . 47 .
48

Unfortunately, the rules for formation of the bonus fund made this par-

tially dependent on the size of the planned wage fund--a disincentive to increa se
profits by reducing labor costs . See Appendix B .
49 However, in 1981, additional success indicators were introduced fo r
saving of materials and fuels . I assume this was added to the previous indicator !
not that it replaced them, but it does mean a relative de-emphasis on labo r
saving .
Appendix B outlines the rules for the formation of the bonus fund fro m
1936 through 1981-85 .
50

Riabushkin i

Dadashev, 1981, p . 110 ; interview with Antosenkov, Ma y

1983 ; Schroeder, 1983b, p . 70 .

51 Conyngham, 1983, pp . 160-161 ; Pravda, 19 and 28 March 1977 in CDSP XXIX ,
no . 13 ; Aganbegian, "How to Outwit the Idler,"

Literaturnaia qazeta, 4 May

1977 in CDSP XXIX, no . 19, pp . 6-8, 44 ; "A Scorecard on the Shchekino Method, "
Pravda,

14 June 1983 in CDSP XXXIV, no . 34, pp . 10-13 ; Schroeder 1979, pp .

339-30 .
53Moskalenko, in Ekonomicheskaia gazeta, 1980, no . 13, (March) tr .

USS R

Report : Human Resources no . 6, JPSR 75744, 31 May 1980 gives an example i n

which the norm declines each year over a five year period .
53
54

Moskalenko, in Ekonomicheskaia gazeta, 1980, no . 13 .

lnterview with Antosenkov, May 1983 .

1 06

55

Ekonomicheskaia gazeta,

1981, no . 9, (Feb .), tr .

CDSP XXXIII, no . 11 ,

p . 15 .
56

Conyngham, 1983, pp . 160-61 .

57
58

Riabushkin i

Dadshev, 1981, pp . 113-114 .

"Vremennoe polozhenie o gosudarstvennom kontrol"

za ispol'zovannie m

rabochei sily," Biulleten' normativnykh aktov ministerstva vedomst SSSR,

1979 ,

no . 1, pp . 3-7 .
59 Pravda and 1zvestiia, 39 July 1979, tr .

CDSP XXXI, no . 30, pp . 1-4, 14 .

The complete text of the decree (Decreee no . 695) is given in Sobrani e

postanovlenniy pravitel'stva SSSR,
60

1979, no . 18, pp . 390-431 .

Pravda and Izvestiia, 11 January 1980, tr . CDSP, XXXII, no . 3, pp . 14-15 .

61 Schroeder, 1983b, p . 70 .
63

M . A . Korolyov in Ekonomicheskaia gazeta,

1983, no . 3 (January), tr .

CDSP XXXIV, no . 9, p . 10 .
63

For details, see Conyngham, 1983, pp . 163-174 .

64

Bergson, 1946, pp . 334-40 ; Nash, 1966, pp . 851-871 .

65

Chapman, 1970 ; Chapman, 1983, pp . 410-13 .

66 The reforms were apparently stretched out longer than originally intende d
in order to prevent too rapid a rise in average money earnings .
67

Chapman, 197 9

68 The right to return to one's home town, even if it is a closed city, i s

granted to those who sign on for work in the Far North, Siberia and the Fa r
East . The fear of losing this right had evidently previously been a seriou s
impediment to migration .

107

69 As one brigade leader points out, a book was written about this fift y
years ago : Brigadny khozraschet v stroitelstve .

Pravda, 36 January 1983, tr .

CDSP, XXXV, no . 4, p . 6 .
70
tr .

"Law of the Plan . . .for 1981-85," Pravda and Izvestiia, 30 November 1981 ,

CDSP XXXIII, no . 49, pp . 15-16 .

71

"In the Politbureau of the CPSU Central Committee,"

1983, tr .
72

Pravda, 34 Septembe r

CDSP, XXXV, no . 38, p . 30 .

"Andropov Talks with Workers at a Factory," Pravda and Izvestiia, 8

February 1983, tr . CDSP XXXV, no . 5, p . 3 . See also Goodman and Schleifer ,

1983, p . 340 .
73 "Law on Strengthening Labor Discipline," December 13, 1979, tr .

CDS P

XXXII, no . 2, pp . 14-15 ; Resolution "On Stepping Up Work to Strengthen Socialis t

Labor Discipline," Pravda and Izvestiia, 7 August 1983, tr .

CDSP, XXXV, no . 33 ,

pp . 4-7 .
74''Law on Strengthening Labor Discipline ;' December 13, 1979, tr . CDS P
XXXIII, no . 2, pp . 14-15 .
75 Normativnyeakty . . ., 1973, p . 669 .
76

While the general provisions for rural home building loans provide fo r

credit of up to 3000 rubles, repayable in ten years beginning the fifth yea r
after completion of construction, certain categories of home builders receiv e
credit on more favorable terms . This refers primarily to people who move t o
a state or collective farm . The most favorable terms mentioned are for th e
Non-Black-Earth Zone, Siberia and the Far East, where credit up to 10,000 t o
13,000 rubles may be borrowed and on average 80 percent of the "loan" will be

1 08

76 (continued )
paid off by the farm (from its incentive fund) or the state . V . Sautenkov i n
Izvestiia,

15 June 1983, tr . CDSP XXXV, no . 34, pp . 33-34 . This is a substan-

tial increase from the maximum loan of 6,000 rubles in the Far East in th e
1971 legislation on the resettlement of farm families .

Normativnyeakty . . . ,

1973, pp . 816-830 .
77
78

See Ruble, 1983, pp . 349-66 .

CDSP, XXXI,- no . 30, p . 1 .

79 Pravda and Izvestiia,

19 June 1983, tr . CDSP XXXV, no . 38, pp . 8-11, 30 .

80Nash, 1966, pp. 851-54

.
81New labor books with tightened procedures intended to curb labor turnove r
were issued in 1973 and in 1977 labor books were made compulsory for collectiv e
farmers . Schroeder, 1983, p . 13 .
82

Valid reasons for quitting are illness, retirement, military service ,

moving with a spouse who has a job elsewhere, going to school or university .
83

Principal Current Soviet Labor Legislation : A Compilation of Documents ,

Bureau of Labor Statistics, U . S . Department of Labor, BLS Report No . 310 ,

January 1963, pp . 63-64, 130 .
84 Resolution of 13 December 1979, "On the Further Strengthening of Labo r
Discipline and the Reduction of Personnel Turnover,"
13 January 1980, tr .

Pravda and Izvestiia ,

CDSP, XXXII, no . 3, pp . 14-15 ; Resolution "On Steppin g

Up Work to Strengthen Socialist Labor Discipline," Pravda and Izvestiia, 7

August 1983, tr .
Laws,"

CDSP XXXV, no . 33, pp . 4-7 ; "Explaining the Changes in Labo r

Izvestiia, 19 August 1983, tr .

CDSP, XXXV, no . 33, pp . 7-8 .

10 9
85

For an interesting discussion of the relationship of Soviet anti-parasit e

legislation to earlier Russian law, see Hugh P . Callahan, Jr ., 1983 .

86

Decree of the Presidium of the Supreme Soviet of the RSFSR, 4 May 1961 ,

tr . in Principal Current Soviet Labor Legislation, January, 1963, pp . 135-37 .

87

Edict of the Presidium of the RSFSR Supreme Soviet, 30 September 1965 ,

Vedemosti Verkhovnogo Soveta RSFSR, no . 38, item 933, pp . 737-739 ; Edict o f

the Presidium of the RSFSR Supreme Soviet, 35 February 1970,

Ibid ., no . 14 ,

item 355, pp . 176-77 . Both the above are translated in Callahan, "Soviet Anti Parasite Legislation

. . ." USSR law of 33 February 1970 :

postanovlenii pravitel'stva
trud,

SSSR,

1970, no . 4, item 36 ;

Sobrani e
Sotsialisticheski i

1970, no . 5, p . 144 ; "On Changes in and Additions to the Russia n

Republic Criminal Code," Ibid .,

pp . 935-37 ; tr .

no . 41 (1351), 14 October 1983, item 1513 ,

CDSP, XXXV, no . 2, pp . 5-6 .

88
CDSP XXXV, no . 33, pp . 4-7 ; no . 33, pp . 7-8 .
89The July 1979 legislation on improving planning and the economic mech=
anism called for increased discipline

(CDSP, XXXI, no . 30, pp . 1-6,14) an d

in December 1979 the decree on strengthening discipline was enacted (CDSP ,

XXXII, no . 3, pp . 14-15) . In April 1983, the USSR Prosecutor General calle d
for improved enforcement of laws against loafers, drunks, etc ., and calle d
ministers and managers to task for hiring such people and overlooking thei r
misbehavior and the damage they do to production .

Pravda, 37 April 1983 ,

tr . CDSP XXXIV, no . 17, pp . 1-3 . As indicated above, the RSFSR law agains t
parasites was strengthened in October 1983

(CDSP XXXV, no . 3, p . 5) .

90 Pravda and Izvestiia, 33 November 1983, tr . CDSP XXXIV, no . 47 ,

pp . 3-7 .

1 10
91 V

. Grishin in Pravda, 17 December 1983 ; V . Lapyrin in Komsomolskai a

pravda, 34 December 1983 ; editorial in Izvestiia,

above tr .

17 December 1983 ; al l

CDSP XXXIV, no . 51, pp . 9-11, 20 . See also CDSP, XXXV, no . 3 ,

pp . 5, 30 ; XXXV, no . 3, p . 9-10 .
92 Pravda, 38 December, 1983 ; Vecherniaia Moskva, 35 December 1983 ;
Izvestiia, 39 December 1983 ; all excerpts tr .

CDSP, XXXIV, no . 53, pp . 6-7 .

93 Pravda, 8 January 1983, tr .

CDSP XXXV, no . 1, p . 19 .

94 Pravda, 30 January 1983, tr .

CDSP XXXV, no . 3, p . 8 .

95

The New York Times,

31 January 1983 ; The Wall Street Journal ,

31 January 1983 .
96 Pravda and Izvestiia,
The New York Times,

1 February 1983, tr .

CDSP, XXXV, no . 5, pp . 1-5 ;

1 February 1983 .

97 ' 0 give but one example, an investigation in response to letters of com plaint found that the officials in Baku had seriously violated the regulation s
concerning the allocation of apartments . Only 10 percent of the availabl e
apartments were allocated to the disabled veterans, large families and other s
on the waiting list and 80 percent went to executives and officials not o n
the list . A number of the officials involved were fired and some of th e
misallocated apartments are being recovered through the court .

Pravda, 1 8

January 1983, tr . CDSP, XXXV, no . 3, p . 34 .

98 Pravda and Izvestiia,

16 August 1983, tr .

CDSP, XXXV, no . 33, p . 3 .

99 It is to be noted that the reported discussion of the draft of the La w

on Labor Collectives among workers focused on increasing the collective" s
concern with discipline .

11 1

100 Schroeder, 1979, p . 330 ; Ekonomicheskaia gazeta,

1980, no . 16 (April) ,

as cited in Schroeder, 1982b, p . 70 .

101

Kostin, 1979, p . 267 ; Manevich, 1981, p . 62 .

102
More information concerning the development of the placement service i s
given in Appendix A . It should be mentioned that data are more complete fo r
the RSFSR than for the other republics .
103

Most of the cities without bureaus were in th e. RSFSR and the RSFSR leg -

islation restricts bureaus to cities of 100,000 or more . Maslova, 1981 ,

p . 67 ; Normativnyeakty . . .,
104

1972, p . 499 .

Nikitina, 1981, p . 68 . The difference between placements through th e

bureaus and total placements with the assistance of the labor organs apparentl y
refers to placements directly by the labor organs or their plenipotentiarie s
in towns where placement bureaus had not--or had not yet--been established .
It is quite certain that data on placements do not include persons sent o n
organized recruitment (orgnabor),

mass mobiliztion, or famil y

resettlement, even though these forms of job allocation are performed by th e

placement bureaus or labor organs . These forms require contracts between th e
worker and prospective employer, arrangements between the bureau or labo r
organ and the employer concerning obligations for travel expenses, an d
assembling the group to start their trip to the new place of work and the pape r
work this entails . In the case of regular placement, the bureau's inspecto r
simply provides the applicant with the name and address of the enterpris e
with the job vacancy and a referral slip ; he is not responsible for seein g
that the applicant gets there .

1 13

105 Apparently in 1968 part-time students were made subject to administra f

tive placement ; they were also allowed to leave their job before the end o
the three year period if they could not attain a responsible post in the enter prise they had been working in while studying .
106 This appears to be true even though in recent years some occupationa l
training and work experience has been incorporated into the general schoo l
curriculum . The recently announced school reform envisages an increase i n
vocational training to the extent that by the end of one or two five yea r
plans, the universal secondary education of young people will be supplemente d
by their universal vocational education . "Draft Guidelines for the Schoo l
Reform," Pravda and Izvestiia, Jan . 4, 1984, tr . CDSP, XXXVI-1 February 1 ,
1984, p . 4 .
107
10

lnterview in Moscow, May 1983 .

8These were established in the 1950's and the system was made more uniform

in 1966 . Matthews, 1983, pp . 59-60 ; Normativnyeakty . . ., 1973, pp . 533-34 .

109

L . A . Nikolaeva, 1979, pp . 105-11 .

110

I n 1979, of the 3,879 thousand graduates of day general secondary schools ,

1,136 thousand (39 .4%) were placed in jobs, 656 thousand (33 .8%) went to vocational schools, 1,053 thousand apparently went on to other forms of education ,
and 35 .3 thousand were neither at work nor in school as of November 1, 1979 .
Komsmol committees were responsible for about half the job placements and one fifth of those entering vocational schools . Goskomtrud SSSR, Biulleten', 1980 ,
no . 6, pp . 18-31 .
111

Nikolaeva, 1979, p . 111 ; Kasimovski, ed ; 1975, pp . 196-97 .

112
113

Nikitina, 1981, p . 75 .
Interview, May 1983 .

113

114 The number of direct hires which were hired with the help of the place ment bureaus is not often given . A 1982 source indicates that placemen t
through the bureaus is not distinguished in the statistics (as are, e .g . ,
hires through orgnabor or assignments from vocational schools) but is counte d
as direct hires by enterprises ; it is proposed that placements through th e
bureaus should be distinguished . S . Santybaev

A . Zuikov in Sots . trud ,

1982, no . 4, p . 30 .
115 The relatively large role of the placement bureaus in some of the Centra l
Asian and Causasian republics may be related to the relatively less develope d
industrial sector in those republics ; the thought here is that in an are a
with a small industrial labor force, a person seeking a job in industry wil l
have fewer contacts and less opportunity to learn about jobs in an informa l
way than in an area with many factories and a large industrial labor force .
This is purely speculative but is worth noting that word of mouth is an important source of job information . For instance, a 1971-73 survey in the RSFS R
of the reasons young persons chose their jobs in industry showed that i n
30 percent of the cases it was friends" example and in 15 percent, parents "
advice . Only 3 percent chose their jobs on the basis of the recommendatio n
of the placement commission and 3 percent on the recommendation of their school .
116 Kasimovskii, 1975, p . 190 .
117 As indicated above, in 1980 placements through the bureaus were 85 . 8
percent of all placements by the labor organs and bureaus . Thus, total place ments in 1980 were about 3 .4 million .
118

Narkhoz-1922-82, p . 399 .

1 14
119

Kostin, 1979, pp .

38-39 ; Maikov, 1973, p . 21 . In the RSFSR in 1979 ,

1 .3 million persons were placed through the bureaus (Table 3), which com pares with the increment in the labor force (excluding collective farmers )
of 0 .9 million .
120

(NarkhozRSFSR-1980, p . 318 . )

E .g ., for each person hired with the help of the bureau the rate in th e

Ukraine was 3 rubles and in the RSFSR was 3 rubles generally, and 3-4 ruble s
in the North . Maslova, 1976, p . 177 .

In the RSFSR, rates for job ads range d

from 50 kopeks (for a one week ad covering up to 5 occupations) to 6 ruble s

(for a one month's ad covering 11 to 15 occupations), Normativnyeakty

. . . ,

1973, pp . 506-507 .
121

E .g ., enterprises with over 5,000 employees pay

and 500 rubles in Latvia . (Maslova,

1981, pp . 68-69 .)

1500 rubles in Kazakhsta n

There may be som e

republics where the system of financing is different ; this system is reported

to be in effect in Lithuania, Latvia, Estonia, Moldavia, Georgia and th e
Central Asian republics (excluding Turkmenia) . Maslova, 1976, p .
122

"Vremennoe tipovoe polozhenie o premirovanii rabotnikov

trudoustroistvu . . .", 34 January 1981, Goskomtrud, Biulleten',

177 .

biuro

po

1983, no . 3 ,

pp . 9-13 .
123
124

Kotliar

Trubin,

1978, p . 97 .

This, often referred to as the " Ufa-Kaluga system, " is discussed below .

135A

recent survey in a number of RSFSR cities showed that, on average ,

enterprises inform the bureaus of 40% of the openings for wage earners, 17% o f
those for engineers and technicians, and only

14% of those for office employees .

Izvestiia, 3 August 1984, tr . in CDSP XXXVI-31, p . 14 .

1 15
126

I n 1970, the Odessa bureau concentrated all information about vacancie s

in its own hands and advertising disappeared altogether . The idea was t o
restrict this information only to those needing work . As a result, labo r
mobility in 1972 was 3 .1 percent lower in industry and 4 .3 percent lower i n
construction than in 1970 . Radio Ukraine, 15 August 1973, tr . ABSEES ,
January 1974, p . 45 .
127

Normativnyeakty

Kotliar

. . .,

1973, pp . 516-17 ; M . Dubenko, 1976, p . 3 .

Trubin, 1978 report this is the practice in Belorussia, p . 133 .

The lack of explicit identification of the employer would not be much o f

a deterrent in the case, say, of an advertisement for loom tenders in a tow n
where there is only one textile mill, but would be a deterrent in large citie s
and for occupations that are common to several industries, such as fitters ,
typists, truck drivers .
1280bservations in Moscow, May 1983 ; Dubenko, E
. cit ., complains ,
"Nevertheless, here and there independent signs are still put up, and announce ments are hung up with the bold-faced "wanted . . .' on the gates of enterprises ,
in passageways, on walls and even lamppoles ." V . Yabarov, deputy head of th e
Perm Oblast labor department also complains about lack of control of advertising and also of the practice of enterprises of sending persons to intercep t
job applicants on the way to or from the labor bureaus .

Pravda, 35 March 1983 ;

tr . CDSP XXXIV, no . 13, pp . 13-13 .

129

Kotliar

Trubin, 1978 mention this as one form of mediation by th e

bureaus but give no indication of how widespread this is nor of whether i t

differs by republics, by cities, p . 44 . There is evidence that this is i n
effect in Leningrad . Chapman, 1970 ; Feshbach, 1974 .
130
131

Normativnyeakty
Sots . trud,

. . .,

1973, pp . 511-14 ; Kotliar

Trubin, 1978, p . 45 .

1973, no . 1, p . 158 ; Hauslohner, 1981, pp . 36-37 .

1 16

132

The head of the Department for Labor Resources and Placement of th e

Kirgiz Goskomtrud complains that in Frunze and Oshe, where the bureaus ar e
run on the Ufa-Kaluga principle, certain enterprises break their contract s
with the bureaus and hire on their own . This creates difficulties in th e
control and recording of labor movement and leads to increased turnover .
A . Usubaliev, 1982, p . 33 .
133

Kotliar i Trubin, 1978, pp . 46-47 ; Kasimovskii, ed ., 1975, pp . 134-136 ;

Maslova, 1976, pp . 194-96 .

134

See, e .g ., Maslova, 1981, p . 70 ; Kotliar i Trubin, 1978, p . 163 ; Kostin ,

1979, p . 113 ; and Kasimovskii, 1975, pp . 128-139 ;

Izvestiia,2 August 1984, tr .

in CDSP XXXVL-31, pp . 13-14 .

135

A . Zolotov, 1980, p . 79 . Elsewhere, I believe, it is general practic e

not to provide an address before a decision to refer has been made . Th e

Moscow bureaus I visited in May 1983 did not have enterprise names and addresse s
on the posted notices .
136 The rather wide variation between republics must remain a topic fo r
investigation at a later date .
137

Letter from Burt S . Barnow, Director, Office of Research and Evaluation ,

Employment and Training Administration, U . S . Department of Labor of January 31 ,

1983 .
138

T.

Baranenkova, 1983, p . 75 . This source suggests that of the more tha n

30 million persons who change jobs annually, two-thirds are considered t o

be turnover (p . 34) .
9 3 1
The retention rate refers to the percentage of all hires who stay o n
the job for 13 or more months . Kotliar i Trubin, 1978, p . 64 .

117
140

Baranenkova, 1983, p . 84 ; T . Nikitina, 1981, p . 73 .

141V Yabarov, deputy head of the Perm Province labor organ, in Pravda ,
35 March 1982, tr .

CDSP, XXXIV, no . 13, p . 12 .

142For local reports, see, eg ., A . Demenkov, head of the Kalinin Oblas t

labor organ in Sots . trud,

1983, no . 1, p . 90 ; A . Solov'ev, head of th e

labor organ of Leningrad Oblast and City, in Sots .

143

trud, 1980, no . 9, p . 93 .

I n 1980, of the 3 .9 thousand employed in the bureaus, 34 percent ha d

higher education and 33 percent had specialized secondary education .

Nikitina, 1981, p . 73 .
144 Goskomtrud SSSR, in its instructions to the labor organs and Komsomo l
committees on placement of general secondary school graduates in 1978 ,
directed them to "take measures to expose young people who are neither workin g
or studying ." Biulleten' Goskomtruda SSSR,

1978, no . 9, p . 4 .

145 When I posed this question to Antosenkov in May 1984 (at the tim e
Director of the Naychni issledovatel'nyi institut truda), he responded that n o
one is obliged to take any job suggested by the bureau .
146
147

Nikitina, 1981, p . 71 . See also Pesenko, 1981, pp . 137-38 .

Labor organs may also look into other institutions in seeking to eas e

the labor situation, such as the education system, whether the hours o f
operation of services are so limited as to require workers to be excused fro m
work to tend to their affairs . This study is limited to the oversight o f
enterprise management .
148

Biulleten' Goskomtruda SSSR, 1979, no . 8 and 1980, no . 3, pp . 3-6 .

118

149

150

lzvestiia, 3 August 1984, tr .

CDSP XXXVI-31, p . 13 .

Roshchin, head of the Administration for the oversight of the use o f

labor of the RSFSR Goskomtrud,

1981, pp . 36-37 . This and the article cite d

in the next footnote are the most informative on the oversight of limits

have found .
151 A . Solov'ev, head of the Leningrad City and Oblast Labor organ, 1980
,
p . 92 .
152

lzvestiia, 3 August 1984, tr .

CDSP XXXVI-31, p . 13 .

153The head of the labor organ of Leningrad city and oblast reports tha t
last year 550 issues were submitted for approval ; of these 13 to the raio n
(city) Soviets, 104 to sessions of the executive committees, 38 to the plenum s
and offices of the raion party committees, and 66 to committees of peoples '
control . Solov'ev, 1980, p . 93 .
154

Riabushkin i Dadashev, 1981, p . 110 ; interview with Antosenkov, May 1983 .

155

Roshchin, 1981, pp . 36-30 ; Solov'ev, 1980, p . ,93 ; Usabaliev, 1983, p . 33 ;

Markov, 1981, p . 33 .
156
157
158
159
160

"Realistic or elastic?" Interview, May 1983 .

Sots . trud ., 1983, no . 13, pp . 118-30 .
Narkhoz-82, p . 368 .
L.

Kostin, 1983, p . 30 .

Narkhoz-82, pp . 35-40 ; SSSR v tsifrakh v 1983 godu, p . 18 .

The productivity of social labor is produced national income per worke r

in branches of material production .

Narkhoz-82, p . 35 .

161

Antosenkov in Trud,

12 November 1981, p . 2 ; P . Shumenkov in Sots . trud ,

1980, no . 4, p . 74 .
162

lnterview with E . I . Kapustin at the Institute of Economics, Moscow ,

May 1983 .
163

Serge Schmemann in The New York Times, 19 February 1984 .

164 Antosenkov, in Trud, 13 November 1981, p . 3 .

165
166
167

See Wimbush and Ponomareff, 1979, esp . pp . 14-19 .

Rywkin, 1979, pp . 10-13 .
Perevedentsev, "Long Way to Go," Molodoi Kommunist, 1983, no . 9, tr .

CDSP, XXXIV, no . 45, pp . 13-13 . See also Perevedentsev, 370 Millionov, M ., 1983 .

13 0

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