130 Int'l Lab. Rev. 237 (1991)
Wages and Work Motivation in the Soviet Labour Market - Why a BIP, not a TIP, Is Required

handle is hein.journals/intlr130 and id is 253 raw text is: International Labour Review, Vol. 130, 1991, No. 2

Wages and work motivation
in the Soviet labour market
Why a BIP, not a TIP, is required
n any revolution things usually become worse before they improve. In the
Soviet Union perestroika has been pronounced dead so often that in 1991
optimists are hard to find. However, the bleakness of immediate prospects
should not blind policy-makers to options for innovative reform that could
have far-reaching beneficial consequences when the economic situation
begins to improve.
True, recent experience gives little cause for joy. National income
declined sharply in 1990, falling by between 8 and 12 per cent between the
first quarters of 1990 and 1991. A Gosplan report compiled in late 1990
forecast a further decline of nearly 12 per cent in 1991. Inflation was officially
about 10 per cent in 1990; unofficially, it was much, much more than that,
and was boosted enormously in early 1991. Meanwhile, employment fell
sharply, perhaps by a million. This is an awesome slump, even though the
figures may exaggerate the overall decline because the data from Goskomstat,
the Central Statistical Office, relate predominantly to the state sector.1
As for structural transformation, many doubt the extent or pace of
change so far. Certainly, the industrial structure of employment must change,
though the biggest difference between the USSR and industrialized market
economies is the former's much larger agricultural sector (table 1), where low
productivity is endemic. There and elsewhere the state sector remains
dominant, but it is shrinking as cooperatives, semi-privatized leaseholding
arrangements and small-scale private businesses grow in number. By mid-
1990 about 16 per cent of total employment was outside the state sector
International Labour Office.
'Arkady Volsky, President of the Science and Industrial Union (a new employers'
association of heads of major state enterprises), said in April 1991 that output of the semi-
privatized sector (i.e. leased enterprises, cooperatives, etc.) had risen by 4.5 per cent in 1990.
Financial Times (London), 17 Apr. 1991.

Copyright  International Labour Organization 1991

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