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Unpaid Wages Raise the Risks of Social Instability in Russia

International Confederation of Free Trade Unions (ICFTU), ICFTU OnLine..., 24 March 1997

A FIRST: ON MARCH 27 THE RUSSIAN TRADE UNIONS, ALL COLOURS AND HUES UNITED, WILL BE LAUNCHING A CAMPAIGN FOR THE PAYMENT OF WAGE ARREARS, THROUGH STRIKES AND PROTESTS. THEY ARE SUPPORTED BY THE ICFTU.

Brussels, March 24 (ICFTU OnLine): The employees of the Akhtuba factory in Volgograd have not been paid for 12 months. For a year, since the plant has had no cash, they have been paid "in kind" from the company's stocks. Formerly specialized in precision instruments for the Soviet navy, the Akhtuba factory is no longer the jewel of the defense industry: since the end of the Cold War it has converted to the sex industry and for a year its employees have had to satisfy themselves for all remuneration with a panoply of very, very specialized gadgets. This absurd situation is not making anyone laugh in Volgograd. "The workers feel insulted," states a union delegate, Tamara Lozhintseva, to a correspondent of the daily Moscow Times who, having come to interview her, depicts the Akhtuba workers' feeling of revolt, the same revolt that is smouldering everywhere in the country. In the neighboring Armina factory, the women workers have been paid for three years in brassieres and shoes that they resell in the streets. The workers of Moskvich, the auto plant near Moscow, are paid in spare parts, those of the Ivanova textile plants in bedsheets, and those of the Gus-Khrustlaniy porcelain factory, near Vladimir, in crystal and ceramic vases...

Yet even so, these workers can count themselves lucky. Millions of Russians have received nothing for months. Like the 2,000 employees of a major military research center in Saint Petersburg who went on strike last month because they had not been paid for 11 months. Or the tens of thousands of teachers to whom the government owes over a billion dollars.

Indeed, the total unpaid wage bill in Russia runs to the billions of dollars. $10,000,000,000 in all, say the trade unions, to which must be added the money the government owes soldiers, students, the unemployed and pensioners. It is estimated that one out of four Russian workers, or close on 20 million people, has been waiting to see the color of his money some for months. And three out of four were left with no wage at some time last year. Between September and January 1997, despite the government's promises after a protest movement on 5 November, the situation only worsened. At least 98,400 companies are defaulting on payments. The scale of the phenomenon is such that for the first time in the history of post-Soviet Russia, the trade unions, of all shapes and sizes, have decided to jointly step into the breach and launch a major campaign through a general strike on 27 March to obtain payment of wage arrears. The visit to Moscow of the Secretary General of the International Confederation of Free Trade Unions (ICFTU), Mr Bill Jordan, and his decision to throw the weight of the international trade union movement behind the Russian workers, undoubtedly impressed the Russian unions which previously had shown little interest in working as a common front. On 18 February, with Bill Jordan present, the heads of the Independent Federation of Russian Trade Unions (FNPR), the Confederation of Labour (KTR) and the Pan-Russian Labour Confederation (VKT), agreed on a set of joint claims: payment by the government of wage arrears in the public sector, revision of the minimum wage, introduction of sanctions against companies that cease to regularly pay their workers, strengthening of mechanisms of tripartite negotiations, reforms of the tax system, and amendments to labour legislation to bring it into conformity with the standards of the International Labour Organization.

In Moscow, the secretary general of the ICFTU made a first round of visits by meeting with Deputy Prime Minister Viktor Ilyushin, Minister of Labour Gennadiy Melikian, the Duma speaker and the vice president of the Federation Council, and Dimitri Rurikov, a senior advisor to President Yeltsin. Even though the government has meanwhile been reshuffled by a Boris Yeltsin dissatisfied with the way in which social problems have been tackled, the ICFTU's message got through.

"The problem of wage arrears and the bankruptcy of firms will not attract the investors to Russia that it so needs. And the economic and social destabilization it creates could lead to a national crisis which the international community cannot ignore," the secretary general of the ICFTU said in substance.

However, thus far the government, the companies and the local authorities have been passing the buck from one to the other: the companies accuse the government of not paying its bills, the government accuses the companies of tax fraud and the local authorities of not doing their job. The complaints are piling up: in 1996, three million violations of the right to remuneration were recorded by labour inspectors. Undoubtedly, much more than a ministerial shuffle is needed to resolve a crisis that carries the seeds of a social explosion.

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