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Analysis From Washington -- Convergence on the Wage Front

  • Paul Goble



Washington, July 17 (RFE/RL) -- Russians are not the only ones who have seen income differentiation increase dramatically over the past decade. Americans have had an analogous experience over the same period.

And that common experience both helps to explain why Americans have reacted the way they have to developments in Russia and to highlight the differences between the two societies.

Historically, income differentiation in the Soviet Union was much smaller than in free market capitalist countries like the United States. Even after its moves toward a market economy, income differentiation in Russia is still smaller than in the U.S.

One measure suggests this: in Russia, the top 10 percent of the income pyramid makes approximately 14 times more than the bottom 10 percent. In the United States, the top 10 percent makes roughly 19 times as much as the bottom 10 percent.

But recent experiences in both countries suggest that it is less the existence of an income differential than a shift in its size that creates both frustration and anger.

During the recent Russian election, Boris Yeltsin and his communist opponent Gennady Zyuganov each sought to address the entirely accurate perception of many Russians that the Russian rich are getting richer far more rapidly than are the middle and bottom strata.

While Zyuganov blamed the market for this, Yeltsin suggested that the benefits of the market would eventually reach even the poorest groups. Polling data thus far suggest, however, that neither seems to have stirred up much enthusiasm among the very poorest of the workers.

In the United States, there is also a very real sense that the rich are now getting richer and the poor poorer. An article in the New York Times recently, for example, pointed out that at a tool and die factory in Ohio, the president of the company had seen his income go from 464,000 dollars in 1990 to 2.37 million dollars last year.

During the same period, however, workers have lost ground. One skilled assembler who was interviewed by the Times noted that he was making 11.83 dollars an hour in 1983, but now makes only 9.93 dollars an hour.

In this admittedly extreme case, the income differential went from roughly 19 to 1 to almost 120 to 1 in only five years.

In neither country has this increase in income differentiation led to violence or even to significant labor and political organization. At least part of the reason for that seems to be a sense of desperation on the part of workers that they cannot afford to protest lest their jobs be eliminated or shifted away from where they live.

But what is interesting is the explanations that workers in the two countries give for what is happening. In Russia, both the media and polling data suggest, many workers see this differentiation as the result of a conspiracy, criminal or otherwise, of the bosses and thus as something almost immoral and certainly wrong.

In the United States, on the other hand, most workers -- even the most angry -- see this as the product of broader economic forces which they do not see very many ways to counter. Unionization, the traditional response, no longer seems to help. And even political activism promises little in the eyes of many such American workers.

How long these patterns will last in either country before those at the bottom of the pyramid will decide that they have had enough and someone will emerge to lead them remains to be seen. But the existence of this pattern in the U.S. goes a long way toward explaining why Americans have responded the way they have to what is happening in Russia and in other post-communist states.
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