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Russia: Idle Workers Plague Industry

By Tony Weselowsky

Prague, 11 February 1998 (RFE/RL) -- In Gogol's "Dead Souls," the protagonist Chichikov takes a unique, albeit bizarre, approach to raise his social standing. He roams the countryside, buying from provincial landlords lists of their dead serfs to be used in later business deals as if they were alive.

Oddly enough, today's Russian labor force in certain ways resembles Gogol's 19th century satire of Russian serfdom and bureaucracy. Like the absurd list Chichikov collects, Russian industry is plagued with similar rolls of idle workers, or as one specialist on Russian unemployment calls them, "dead souls." Whether lists of peasants or workers, what exists on paper belies reality.

"You'll go to a Russian firm, a big factory, the people on their books are either called administrative leave or unpaid wages," Guy Standing explained recently in an interview with RFE/RL. "They're expected to turn up, but they're not being paid, are actually unemployed, but they're just kept on the book."

Standing, author of 1997's "Russian Unemployment and Enterprise Restructuring: Reviving Dead Souls," says the swelling ranks of idle Russian workers mask what is, contrary to official statistics, massive unemployment.

"What we found in fact is that if you look at the enterprises, you find that something like a third of the workers are either suffering from wage arrears, for months and months, or are unpaid leave, administrative leave. So you can essentially say that a third of those people, called employed, are not really employed," said Standing, whose research is based on seven rounds of surveys initiated in 1991.

Russian workers have become pawns, like Chichikov's dead souls, in a vicious circle that Russian industry, known for its labor paternalism during the Soviet era, has little interest in resolving, according to Standing.

"The irony is that it doesn't cost the enterprises anything if they just keep their workers on the books, unpaid. But if they lay them off, then they have to pay them severance pay so it costs them," explains Standing.

He said workers are left with few options.

"If they quit the enterprise, they would lose entitlement to the severance pay, and in all likelihood, in reality, to unemployment benefits, at least for awhile," says Standing. "So they just keep their work history book on, and some of them try to earn money in the black economy. Some are just desperate in the street begging, and in some cases, they're suffering social illnesses and dying."

Those without the chutzpah to work as so called "chenyoki" -- small time traders commonly seen lugging their wares to outdoor markets -- find little solace from the state's underfunded unemployment scheme.

"In practice those people that do get unemployment benefits are only a tiny percentage of the unemployed and those that receive benefits, the average amount comes out to be equal to the minimum wage," says Standing, noting that the minimum wage is calculated at about 20 percent of the official subsistence income.

"In other words, if you receive the minimum wage, you're in chronic poverty," says Standing. But getting even a few roubles as unemployment would cast you as lucky in today's Russia. Like the rest of the country's economy, Russia's unemployment fund is trapped in a non-payment problem of its own, as Standing explains.

"The enterprises say they don't have any money for the unemployment fund, but we've got these shoes, or unsold anything they produce, 'we can't sell them, you take these instead of the money we would pay into the employment fund and you give those out to the unemployed."

Chichikov envisioned growing rich through his scheme. Being paid in footware, the dreams of Russian workers may not be so lofty.

(This article is one in a three-part series called Russia's Workers: Why They Go Without Wages. )