In a number of countries (the United States, Britain, France and the Federal Republic of Germany to mention a few), it has recently been claimed in newspaper and magazine articles that unemployment has appeared in the Soviet Union. The authors frequently refer to the works of Soviet economists (my own included) in which serious problems are raised concerning our rational utilization of manpower.

Naturally, there are many intricate as well as unresolved problems in the Soviet economy. We write about them a good deal and attempt to solve them while carrying out the economic reform. Nevertheless, we have no problem of unemployment. We solved it long ago-almost forty years back-during the years of the first five-year plan. At that time there was large-scale construction of new enterprises in various branches of the national economy and the collectivization of agriculture was in the main completed. Ever since, the number of factory and office workers in all branches of the economy has been increasing from year to year.


(In millions)

1913 1932 1940 1950 1960 1966 1967 1970 (plan)

12.9 24.2 33.9 40.4 62.0 79.7 82.3 91-92

The fact that the Soviet national economy is planned gives ample opportunity to anticipate requirements and undertake the training of workers in those trades which will be needed in the future. The planned economy and the development of the country's productive forces ensure full employment for all able-bodied people either in production or in the services. As technical progress permits more goods and services to be provided by fewer people, working hours are reduced and free time is increased, thus creating still greater opportunities for developing the intellectual potential of wide sections of the working people.

Thus, although unemployment disappeared rapidly in the U.S.S.R., an intricate problem, or set of problems, remains: how to supply the developing national economy and all its branches, as well as the enormous undeveloped districts of the country, with workers. What are the sources for replenishing the working class and the intelligentsia? How should the rational utilization of manpower be ensured?

During all these years the principal sources for replenishing manpower were: first, young people reaching the age of employment; second, the collective-farm peasantry and the country's rural population in general; third, women engaged in housekeeping. In recent years an extensive study has been conducted of problems involved in using the country's labor resources rationally. These acquire paramount importance at the present stage of economic development because of the increasing shortage of workers and because implementation of the economic reform requires thrifty management of the economy.

Also, for a number of reasons, among which the consequences of the past war are still of importance, the birth rate has been falling in recent years and the increase in the population has slowed down, as the following table for the past seven years shows.


(Per 1,000 of the population)

1960 1961 1962 1963 1964 1965 1966

17.8 16.6 14.9 14.0 12.7 11.1 10.9

It stands to reason that we are concerned. At some time this drop in the birth rate will inevitably result in a reduction in the total labor force and will especially affect the most active age groups. Fortunately, during the current five-year period (1966-1970) the increase in the population is satisfactory thus far. However, the universal compulsory secondary (ten- grade) education now being introduced in our country means that youth will actually begin to work at a later age.

Due to the general improvement in the standard of living of the peasants (collective farmers and state farm workers) the flow of rural inhabitants into the towns has somewhat declined lately. There is also less chance to draw women into productive employment: during the seven-year period, 1959- 65, the proportion of able-bodied women engaged in housekeeping dropped by 50 percent.

All these considerations today aggravate the problem of finding and rationally using manpower in the Soviet national economy. They explain the recently adopted decision of the Central Committee of the CPSU and the Council of Ministers (see Pravda, February 16, 1968) on measures to provide personnel for capital construction. In particular it is noted that "construction projects in a number of the country's districts experience an acute shortage of workers and engineering-technical personnel."

The problem of attracting manpower to areas in Siberia and the Far East which are exceptionally rich in natural resources has not as yet been solved. These areas constitute more than 50 percent of the entire territory of the Soviet Union but hold only 10-10.5 percent of its population. This means that our manpower resources are very unevenly distributed. Thus while the average population density for the whole country (according to the latest census) is 9.4 persons per square kilometer, the figure for the Yakut S.S.R. and the Magadan Region is 0.2 and for the Far Eastern area 1.4. At the same time, the population density of the Moldavian S.S.R. is 85.6 persons per square kilometer, in the Donetsk Region, 160.8, and in the Andizhan Region (Uzbek S.S.R.), 181.7.

The resolutions of the 23rd Congress of the Communist Party envisage large- scale economic construction in the East of the country, which obviously will require large numbers of workers with diverse skills. During the twenty years which separate the last two censuses (1939-1959), the size of the population in Western Siberia increased by 28 percent, that of Eastern Siberia by 34 percent and that of the Far East by 70 percent. These increases were considerably greater than in other parts of the U.S.S.R. However, data for recent years show that the number of people leaving Siberia exceeds the number arriving, and, incidentally, the outflow is mainly directed toward the southern and western areas of the country.

A system of economic and organizational measures is being implemented to increase the movement of manpower to outlying districts of the country and to stem sharply the inflow from those areas. These measures include wage differentials; the building of comfortable housing with all conveniences, of children's establishments, schools, clubs, theatres and hospitals; and an improvement in the pattern of production so that branches of industry manufacturing consumer goods and foodstuffs also develop in these outlying areas, thus providing women with employment.

In this respect the decision of September 26,1967, taken by the Central Committee and the Council of Ministers, "On Measures for Further Improving the Well-being of the Soviet People," is of great importance. In addition to the existing privileges for workers engaged in the heavy, chemical and mining industries and in construction, this decision also introduces coefficients (bonuses) to wages for all workers in the Far East, Siberia and the European North engaged in the light and food industries, in education, public health, communal services, science, culture and other branches of the national economy. Greater privileges have also been given to those working in the Far North and in similar areas; for example, wage bonuses are granted after a shorter period of service.


The service industries have begun to develop rapidly in recent years. In the past we were unable to devote great attention to this sphere, but now that the standard of living of the population has risen there is a need to increase considerably the number of workers in trade and communal services as well as in other enterprises where services are required. Thus, the present five-year plan envisages an increase of approximately 150 percent in the volume of services by 1970, including an increase of more than 200 percent in rural localities; there will be a 500 percent increase in such services as dry cleaning, a 700 percent increase in housing repairs and a 200 percent increase in the repair of household appliances, furniture, etc. It stands to reason that a large labor force will be required for such a big program. Favorable conditions will have to be created to attract it. In particular, a shorter workday is being established for women who must also do housekeeping.

The development of services touches many aspects of Soviet life-the problem of how to use manpower rationally, the opportunities for drawing available labor resources into social production, particularly in medium-sized and small towns, the easing of living conditions by reducing the time spent on housekeeping, and so on.

In order to use labor resources more rationally in average-sized and small towns and to take account of the need to use both male and female labor, new enterprises in the current five-year period are mainly being built away from the principal urban centers. Soviet economists are advancing many proposals on ways to draw into social production those who at present are engaged only in housekeeping, to develop services and to set up small specialized enterprises as branches of large factories.

The rural population is a natural source for replenishing manpower in all branches of the national economy. Only recently a majority of Soviet citizens was engaged in farming and lived in rural localities. Today the composition of society has radically changed and there has been a sharp increase in the number of factory and office workers, with a reduction in the number of people engaged in agriculture.


(as percentages of the total population)

1913 1920 1926 1939 1961 1965 1968

Urban 18 15 18 33 50 53 55

Rural 82 85 82 67 50 47 45

As this table shows, the process of urbanization is taking place at a rapid rate. For many years, some two-thirds of the requirements of the national economy for additional workers was met by the agricultural sector. With the development of technical progress, including the mechanization of farming, and a rise in labor productivity, the number of people engaged in agriculture drops and the number engaged in industry, construction, transport and services increases.

However, those who have come to the cities looking for work have not been confined to this category. Many peasants, especially among the young, want to move to the cities in order to enjoy the higher living standard there. This is why many agricultural districts today are seriously short of manpower, especially machine operators.

A complex of measures is now being implemented to reduce social-economic differences between town and countryside. Of great importance was the introduction in 1966 of a guaranteed wage (both in cash and in kind) on all collective farms and of state pensions for collective farmers. The material interest of collective farmers, as individuals and as a group, in the successful operation of the enterprise has been considerably enhanced. Comfortable homes, clubs, cinemas, libraries, hospitals and schools are gradually being built.

In order to use the labor of peasants as efficiently as possible, to reduce the seasonal nature of their work and provide full employment the year round, and to improve their standard of living generally, every effort is being made to develop auxiliary enterprises such as the processing of food and other agricultural products, the manufacture of potato starch and alcohol, as well as the manufacture of building materials, packing materials and consumer goods. Branches of some industrial enterprises are being set up on collective and state farms on a seasonal basis. In addition to providing year-round employment, these measures should result in some 8 million rubles worth of additional goods.

The shortage of factory and office workers in various branches of the national economy and in various districts also makes it necessary for the Soviet Government to draw back into productive use some of those who have retired on pensions. In the U.S.S.R. pensions are granted at a comparatively early age: women at the age of 55 and men at the age of 60 (in some branches it is correspondingly 45 and 50). There are many able- bodied people in these age groups. In order to provide material incentives to accept productive employment, the Council of Ministers decided in early 1964 that pensioners should receive 50 percent of their pensions in addition to their wages. Pensioners working in the Urals, Siberia and the Far East receive 75 percent of their pensions, and those working in underground jobs, in harmful labor conditions or in hot shops receive their full pensions irrespective of their earnings. The adoption of this law brought a sharp increase in the number of pensioners working in industry and in construction.


The introduction of new technology and the growth in labor productivity should as a rule be accompanied by a definite release of manpower. In our socialist conditions, when many economic areas and enterprises-especially new ones-face an acute need for manpower, this process can and should be one of the sources for providing it. Besides this, the release of manpower should reduce idle time and loss in working time; it should improve all qualitative indices, especially labor productivity. Unfortunately the release of workers resulting from the introduction of new technology, mechanization and automation is being carried out very slowly. As a rule, a factory or office worker who might be released is kept in a manpower "reserve" as a hedge against changes in plan assignments and the possibility of a labor shortage in the future. A "reserve" is necessary when an enterprise fails to operate smoothly.

A discussion is now in progress in Soviet economic journals on how best to induce executives of enterprises to release unneeded manpower, on how best to organize the retraining of workers whose trades are becoming redundant as a result of the technological revolution, and on how best to assure the material security of workers during their retraining and provision of new jobs.

Another factor inhibiting the release of surplus workers has been that until recently enterprise executives had to find employment for these workers. They were not always in a position to attend to this. Now the situation has changed; last year State Committees for the Utilization of Labor Resources were set up under the Councils of Ministers of all the fifteen Union Republics to deal with the entire complex of problems concerning the redistribution and most efficient utilization of labor.

The Committees have already been formed and subordinate agencies have been set up in all regions, cities and districts to study the composition of the able-bodied population and the requirements for workers and specialists in various branches of the national economy. These agencies participate in drawing up the balance-sheet on manpower and in planning how it should be trained and distributed.

On the basis of their studies the Committees try to anticipate what fields and particular enterprises will soon release manpower so that they can plan ahead how and where workers can best be used. To cite a typical example, with the completion of the Bratsk hydropower station, more than 14,000 construction workers became available for other employment. Part of them wished to work on the new Ust Ilim hydropower station which is being built north of Bratsk; others were provided with jobs in industrial enterprises there. Only an insignificant number left for other districts, mainly in the south and west.

Through their employment offices in every city and district, the Committees disseminate information on the requirements of particular enterprises for workers, engineering and technical personnel and clerks. In the Russian Federal Republic alone more than 1,300 such offices have helped provide jobs to 873,000 persons, including young people who have reached the employment age, housewives seeking outside work and those who wish to change their jobs. The Committees devote special attention to placing youth in industry. Enterprises prepare in advance to accept young people and provide training courses; and those arriving from other towns or villages are provided with housing. The Committees also help families moving to collective farms and state farms in the Far East, Siberia and the Volga areas. For example, they see to it that good houses are built before families arrive. Settlers receive state credits, are exempted from taxes and are helped in setting up their households.

Another function of the Committees is to help draft plans for the siting of new industrial plants and the training and retraining of workers. Thus, they have both analytical and operational responsibilities: they collect data on manpower resources and they organize the redistribution of manpower and the placing of factory and office workers in new jobs.


At the important economic conference held last May, the main speaker, Nikolai Baibakov, Deputy Chairman of the Council of Ministers and Chairman of the State Planning Committee, called attention to the fact that in the coming five-year period labor resources will be strained: by 1970, 92 percent of the country's able-bodied people of working age will be productively employed. Hence, opportunities for increasing the labor force will be exhausted in many districts. This means that the demand for additional manpower will have to be met from the natural increase in the population. "Because of the shortage of manpower in large industrial centers," Chairman Baibakov concluded, "the construction and expansion of enterprises during the new five-year period should be conducted without increasing the number of those employed. At the same time it is necessary to increase further the proportion of new construction undertaken in small and average-sized towns where manpower resources are still to be found."

Another matter discussed at the conference was the need for material and legal means to obtain the release of superfluous workers. Particular stress was put on how to provide managers with incentives to use manpower thriftily. For example, in an experiment at the Shchokino Chemical Mill approximately 50 percent of the wages of workers released was left at the disposal of the mill; these funds were then used to pay workers who combined jobs and increased the volume of their work. During the nine-month period of this experiment (August 1967 to April 1968), the personnel in this enterprise was reduced by 324 while production increased (January to April 1968) by more than 19 percent compared with the corresponding period of the previous year. This experiment was approved at the conference and will be repeated in a number of other enterprises.

One proposal discussed at the conference was that enterprises should pay the state for the manpower they use. This idea was first advanced by Leonid Kantorovich, a Soviet Academician, who wrote:

How is it possible to solve such an important task as the rational distribution of manpower? How to interest enterprises in it? It stands to reason that economic measures are required for this purpose. I think that the problem could be solved this way: A procedure should be established whereby enterprises pay for using manpower in the same way as they pay for fixed funds and working funds. Payment should be introduced in those districts where there is a shortage of manpower. In localities with a surplus of manpower, on the other hand, enterprises should be given subsidies for expanding production. Naturally, enterprises will pay only for using those categories of manpower which are in short supply.

I do not agree with the proposal advanced by Kantorovich and his supporters. First, any kind of tax (and this also applies to various fines, penalties, etc.) which is taken from one pocket and placed in another (from the pocket of a state enterprise and into the pocket of the state budget) rarely produces the required economic effect. Second, practice shows that there are more effective ways to stimulate the personal interest of executives and workers in the economic use of resources in general and manpower in particular. The plan tried in the Shchokino Chemical Mill is more effective; the workers and managers there are genuinely interested in a more rational utilization of manpower. Therefore, I see no need to establish a special tax for manpower, and it is noteworthy that at the economic conference the proposal failed to receive support.

The Soviet Union still has many serious employment problems, but they have nothing in common with unemployment.

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