Created: 3/1/1961

OCR scan of the original document, errors are possible

an evaluation of the program for reducing the workweek in the ussr


central intelligence agency



CENTRAL INTELLIGENCE AGENCY Office of Research and Reports


Succory and

I. Provisions of the Wage and Hours

Development and Future Plans

of the Program

II. Relationship of the Reduction In Hours to Important

Economic and Social Problems

Facing the Soviet leadership

of the Shortened

On Levels of

On the Adjustment of Mages and Work Noma


k. On the Tight Urban Labor

HI. Rationale for the Reduction in




Leisure at a

During the

Motivos and

Prerequisites and Prospects

Append Ix


s ions

6 the USSR reduced the workweek for all workers end employees from k8 to k6 hours and announced plansurther gradual reduction to kl hours by the end After lagging badly, the program was sharply accelerated, and by the end0 all workers and employees had been transferred to the shorter workweek. The reduction of the workweek was accomplished largely without lowering average weekly earnings, without underfulfillment of production plans, and with substantial increases in output per nan and per nan-hour. In addition, higher "technically based" work norms have been established, the wage and bonus structure has been rationalized, and progressive piece rates have been deemphaslzod. The Seven Year* published inpecified that an additional hour was to be cut from, the workweek0 and that the 3hlfthourwas to begink and to be completed

Reduction or the workweekas contributed to the solution of several Important problems facing the Soviet leadership in recent years. Including the need to reestablish control over wages, to improve economic efficiency, and to adjustightening urban labor market. By means of the program, levels of living have been raised (through increasednd the resistance formerly experienced to upward adjustments in work norms has been quieted. Soviet managers have been forced to make beneficial but formerly neglected changes In methods of operation, thereby sharply raising efficiency in the nonagricultural sectorinimum amount of new investment. Finally, the shorter workweek, together with the higher hourly pay, has helped to relieve the pinch of the tightening urban Labor market byarticular Inducement for housewives and young people to seek employment.

Although the reduction in the workweek contributed to the solution of these important problems, the real motivation is not so apparent. The) decision to shorten the workweek probably wasby political considerations and was closely connected to the lntra-Comaunlflt Party strugle at thai time. The primary motivation may hove changed from political to economicheo tho program for the reduction of the workweek and the program for the establishment of new vugou and work norms were formally linked.

There is considerable evidence that the reduction In hours of workasic goal and comltaent of the Communist movement and the Soviet state. One of the first decrees of the Council of Peoples Commissars of the Rusaian federation7 establishedour workday,7 decree sought with only partial success toaur workday for production workers in industry. In addition, Hlklta Khrushchev has talked recentlyorkday under Connunlsaours.

On the other hand, the program to reduce the workweekothndppears to be motivated primarily by the Soviet desire to prevent the volume of consumption from Increasingate greater than planned under the pressures of the current and prospective tight urban labor market. Stringencies In the urban labor marketwhich create pressures for increases in real wagesesult from the declining increments to the population of labor-force agerom the regime's policy of restricting rural-urban migration, and possibly also from the very rapid increase inplanned- Soviet doctrines concerning tha primacy of heuvy industry, the relationship between the growth of real wages and productivity, and the role of public consumption under Communism imply that the desire to restrict the growth of consumptionasicfactor in the planahorter workweek. Finally, the clear intent of Soviet leaders not to compete with the US in consumer durables, notably in automobiles, also supports this conclusion.

Although the increased leisure obtained by theay have been "free" or "low-cost" In terms of foregone potential output, this result appears to havenique one, occasioned by the existence of substantial "Internal reserves" in many Soviet enterprises and by the short-run difficulties (costs) of converting these reserves into increased physical output. The coat of further reductions in hoursn terms ofoutput, probably will be much higher and could represent either the costs ofong-term Communist goal or, alternatively, the costs oflanned "mix" of physical output in which consumption goods areelatively low priority. The further reduction in hoursonsequent reduction In real weekly earnings, therefore, may depend heavily oq thp successful Introduction of new technology and on the ability of the Soviet planning-management Byetea to install new equipment and to use the new techniques efficiently

A. Historical Development and Future Plans

In6 the Twentieth Party Congress of the Soviet Communist Party amended the Sixth Five Yearo provide for the transfer of all workers and employees"hour workweekhour workweek by the end The workweek was to be shortenedoursnd thereafter the reduction was to proceed industry by industry, starting with those with the most arduous working conditions, such as coal mining. In general, the shift In the workweek was to be accomplished by cutting the workdayours on weekdays,our workday on Saturdays. Where "conditionsay weekours per day was to be* The Sixth Five Year Plan also providedajor reform of the wage and salary systemhrough substantial increases in minimum wage levels, revision of the antiquated system of work norms, and readjustment of occupational, regional, and industrial wage

Although both of these programs were administered under the general guidance of the State Committee of the Council of Ministers, USSR,uestions of Labor andhey proceeded separately at first, and even by8 neither program had progressed much beyond the experimental stage. In6 the workweek for all workers and employees was cut fromoours by reducing work-hoursn Saturdays, and inhour workweek was established for persons underears of age. 3/ , selected enterprises in ferrous and confer reus metallurgy and in the automobile, machine tool, and other industries experimentedhorter workweek, and other plants in the metallurgical, consumer goods, food, construction materials, coal, and construction industries made experimental changes in wogen and work norms. In some establishments, changes in norms, wages, and hours were made simultaneously. asic minimum wages were raisedubles per month for all workers and employees In rural areas (such as workerstate farms) andubles for those in towns and in workers'/

Workers and employeesechnicald by the Soviet govern-ment. It includes all wage and salary earners but excludes members of the arced forces, members of producers cooperatives, and collective farmers.

** For serially numbered source references, see the Oocudarstvennyy Komitet Sovelu MJnistrov SSSR po Voprosoraarplata.

t Ruble values in this report are given in terms ofurrent rubles and nay be converted to US dollars at the rate of exchangeubles to This rate does not necesaorily reflect the valuev av:;.

During this period of experimentation, considerable inertia and opposition were encountered to the upward adjustment in work norms, und some difficulty was experienced in maintaining production while reducing weekly work-hours. esult of these experiments, the regime apparently concluded that the two programs should be combined. Accordingly, ino the government decreed that both the wage adjustment and the reduction In hours were to be introduced simultaneously and were to be completed by the end8 in ferrous and nenferrous metallurgy und in the coal, chemical, and cement industries. 5/ Although target dates for other industries including machine building were subsequently established, these goals were noc met, and the program logged& and muchpparently for the following reasons:

The inability of some managers to satisfy the preconditions of the transferhat is, their inability to assure their superiors that thein hours could be accomplished without shortfalls in production and productivity and without unwarranted increases in the wage bill, and

The lack of close administrative control over the program an the period after the abolition of the economic ministries and the establishment of the councils of national cconccy (sovnarkhozy) In

The Seven Year Plan, published in Februaryreaffirmedfor completion of the transfer to the 'il-hour workweek by She plan also specified that another hour was to be cutworkweek2 and thai ttv>Yrhouray weekours per day would begin inwages are to be raised,ubles per month byminimum wages are to be increased further6ndper south for rural and for urban workers and employees, 6/ The plan also vork-eek towas to bei."


*" The program for establishinghorust workduy and workweek ir. the world" is more fully explained In the9 issue of Placovoye khozyaysIvo, 7/

Onew time schedule for the wage adjustment and the transfer to the shorter workweek was decreed (seehe decree also provided thut transfers were to be madeegional basis rather than on an industry basis. Tbe regional councils of national economy thus were assigned the primary responsibility for control over the preparation and the timing of the transfers In individual plants. This shiftegional approach probably was intended also to prevent the undeslred movement of labor from plants in industries where the reduction in hours had not yet been made to plants already on the shorter workweek.

Before the councils of national economy, ministries, orgranted permission to an enterprise tohorter workweek, the management and engineering staff of the enterprise had to develop acceptable plans for the changes in technique, organization, andnecessary to utilize existing "internal reserves" so as* toproduction and productivity plans during the conversion periodinimum expenditure of additional labor and/or capital. 9/

B. Success of the Program

After the initial experimental periodnd the lags experienced8 andhe implementation of the program was sharply accelerated late9 and The followingwere:

mber ofEmployees onPersons)

il December




There were approximatelyillion workers and employees in

Plan fulfillment reports indicate that the changeoverhorter workweek in industry has been accomplished largely without under-fulfilling production or productivity goals. 9 and the first

9 monthslans for both labor productivity and manpower were overfulfilled, leadingubstantial overfulfillment of outputs shown In Tableowever, labor productivity plans0 were uodcrful filled.

Table 2

Planned and Actual Increases in Output and Productivity in Soviet Industry

Percentage Increase Above Previous Year


(Output per Employee)

(Implicit Series)






Soviet index.

on "industrial-productloo personnel."

theonthsompared with the* output rose byercent, output per employee by 6manpowerercent.

In both years, output per employee remainedevel equal to or only slightly below that achievedven though work-hours per employee were reduced substantially. hen plants in heavy industry were being transferredhorter workweek,ercent of the ovorfulfillment of the output plan may be

" Because of the overfulfillment of output plans, the restructuring of base-wage rate differentials between Industries, and the incorporation of higher minimum wage levels in the new schedules of wages and work norms, average weekly wages In many enterprises also have Increased.

attributed to over fulfillment of the productivity plan. The remainder of the overfulflllaent9 was associated with overfuimiment of manpower goals. 0 the overfulfillment of manpower goalshortfall in the output plan because yearly productivity did notaa rapidly as planned.

esult of the shorter workweek, output per man-hour rose substantially faster in90 than output per enploycc and was reported to have Increased5 percent9

II. Relationship of the Reduction Inmportant Economlc and Social Problems

A. Problems facing tho Soviet Leadership

inhen the decision to reduce work-hours was made, the Soviet leadership was awareomplex of problems related to wages and hours of work. These included the need (l) to increase living standards,o overhaul the wage structure and revise work noma,o improve managerial efficiency, and (k) to adjustemporarily tightening labor market-*

Since the death of Stalin the Soviet leadership has been politically committed to raising the level of living for its people, and during the post-Stalin period the Soviet worker-consumer has benefited from moderate Increases in the availability of consumer goods. The Soviet people hove cooc to expect further laprovements ic levels of living.

holesale revision of the system or work norms and incentive schemes had become*-. As capital stocksand workers' skills improved over the years, established work norms become obsolete and reflected very poorly tho growing output potential of the individual worker. esult, bonus payments and/or payments on progressive piece rates for overfulfUlmcnt of these unduly low work norms formed an increasing proportion of workers' total Iu addition, little care lmfi beer, taken over the years to equalize wage rates and work norms for comparable activities hotwoen plants.eneral upgrading of Jobs and workers had occurred, with the result that tho labor grade and job classification system had become severely distorted.

esult of the chaotic wage system, the planning of output levels, wage funds, and consumption needs was becoming increasingly-

For an excellent presentation of the problems, see.

complicated. Most workers were regularly overfulfilling their norms by large margins and were being compensated with substantial bonuses or by the rapidly progressive piece rates in effect in many Moreover, as long as the system of wages and work norms was not changed, the regime was implicitly committeduture course of rapidly increasing wage levels as capital stocks and productivity rose. Reestablishment of control over wages, therefore,ajorfor the Soviet leadership.

Soviet leaders also have sought greater efficiency in the use of existing resources of capital, labor, and raw materials,in industry. Soviet planners recognized that existing work patterns were not the most efficient ones available to the managers, and the Soviet press regularly stressed the need to utilize "internal reserves" and to reduce costs. In spite of considerable exhortation in the past, however, managers tended to overlook or dismissorganizational changessuch as better flow methods ofand the elimination of idle timelargely because their bonuses were tied not to reduction in cost or to other efficiency criteria but to fulfillment and overfulflllment of the output plan and because these beneficial changes often temporarily interrupted production.

Many managers sought to insure themselves against underfulfill-ment of the output plan byeserve of labor and otherfor use toward the end of the plan period or for the fulfillment of other lucrative priority output goals. This reserve of labor has been reflected in chronic underfillroent of labor productivity goals in many areas of the economy, especially, as well as in under-fulfillment of reduction in cost or profit plans.

Another problem faced by the Soviet leadership wasemporarily tightening urban labor market. This situation resulted fromeliberate government policy of. restrictingfrom the rural areashe sharp decline in the annual growth of the population of labor force age aftera result of the low birth rates during World War II.

* That 1b, its effect on production cannot be separated from the effects of temperature, moisture, Soil conditions, work habits,skills, and other factors.

The traditional way for plant managers to maintain theirof labor was to encourage migration from the rural areas. Although the effect of these migrations on agricultural production is nothe cost of housing and retraining large numbers of migrants was becoming progressively greater by thes. In order to reduce this migration and to encourage agriculturalthe government raised income levels of collective farmers by

upward adjustmenta In state procurement pricesy In addition. Internal passport regulationa were tightened up in some citieo, Including Moscow,nd increased diversification of work in rural areas (such as the construction of

l food-processing centers and tho building of rural roads) is now being

The reduction of migrationthe rural areas hasthe pinch in the urban labor market caused by tbo decliningto tho population of labor force* These increments declinedillion6 toillionI. This tight urban labor market situation provided tho potential for sharp wage Increases as enterprise managers sought to maintain their reserves of labor. , plants of "national economichich pay relatively high wages, probably still had ample reserves of labor, whereas plants in the low-wage light and localwere less fortunate.

The potential for sharp wage Increases resulting from the tight labor market has been dampened considerablyumber of governmento provide more urban workers. Educational arrangements have been adjusted to permit tho employment of more young people, and increased efforts to employ more urban housewives are being made, in part by CDtabllshlng more creches and kindergartens to care for their children during work-hours. In addition, the demobilization ordemobilizationillion servicemenas reduced the upward pressure on wages. Whereas it lo not possible to Judgethe net effect of all these changes, Soviet press complaints of overrating (that is, the placing of persons in Job categories for which they arc unqualified) suggests that some "blddlng-up" of wages has occurred.

fl. Impact of the Shortened Hours 1. On Levels of Living

The reduction of the workweek free WJ to Ul hours without reducing average weekly wages provides Increased "pay" in the form of leisure rathor than in the form of goods. Thus the program fulfills the political coomitoent of the leadership toignificantly higher level of living for the people. In addition, tha program to shorten hours has firm Soviet historical precedent and favorableconnotationa. One of the first decrees of the Council of Peoples Commissars of the Russian Federation7 was theofour workday,7 decree sought with only partial success to establishour workday for production workers in Soviet

By linking changes in wages and work norms to theof the workweek, the Soviet leadership apparently has quieted the opposition to these changes experienced- Under the new system, norms are being raised by as much asercent in scoe cases, and perhapsercent of an individual's pay is nowby meeting his output target as against, say, ko percent under the old scales. Progressive piece rates arc much less extensively used, bonuses are more closely controlled, and basic wages have been tied to much higher "technically based" norms. Whether these changesspeed-up" orecognition of realistic rates of output made possible by the growth of capital and labor skills cannot be determined. Nevertheless, the adjustments in hours and wages have forced Soviet workers to trade the opportunity of higher wages in the future for Increased leisure in the present. Thus the new system has provided the Soviet government with the increased control over wages that it desired.

3- On Efficiency

The reduction in hours has forced the managers of Soviet enterprises and institutions to operate more efficiently. During the period of preparation for the shorter workweek, Soviet managers and engineers at each establishment were required to concentrate on those cost-saving changes In their methods of operation that permitted the shift in hours (l) without shortn the output plan,ithout requiring new capital,ithout overspending the wage fund (except where specifically authorized). In plants, such as those in heavy industry, favored by high wages andeserve of labor under the old methods of operation, the objectives generally have been achieved both by bettor use of workers and by Introducing formerlybeneficial chunges in organisation. Particular attention was paid to the synchronization of production flows, hotter allocation of primary and secondary workers, and the elimination of idleany time-and-motion studies. Attcmptu also were made to reduce tardiness of employees and "down-time" on machines. In other areasparticularly in light and local industry, In the labor-short regions of the Soviet North and East, and in plants using continuous processesthe sharp cut in the workweek could not be fullyfor by such organizational changes, and additional labor and/or capital had to be supplied to avoid production shortfalls. Some plants have overspent their wage funds either through wage increases above planned levels or by the recruitment of additional workers. Thushen many plants In heavy industry were being transferred to the shorter workweek, tho overfulfilloent of output plana could beprimarily to mibntontial improvements in productivity, whereas

hen the conversion began in the light industries, the over-fulfillment of output plans was accomplished solely through theof additional persons, as shown in

The increased cost consciousness forced by the reduction in hours has been institutionalized and reinforced by two decrees promulgated late9 and earlyg/ The first of these decrees links the regular managerial bonuses primarily to reduction in cost rather than to fulfillment and overfulfillmeat of the output plan. Bonuses for reduction in cost, however, are contingent upon meeting the plans for output, new technology, and other key indicators. The second decree links bonuses for development and the use of new technology to the savings in cost made possible by new techniques or by new equipment.

'1. On the Tightbor Market

In spite of superficial appearances, the shortening of the workweek is not inconsistent with the tight urban labor marketbeing experienced in the USSR. Rather, the tight urban labor market Increased the pressure on the regime to raise labor The program for the reduction of the workweek raises levels of living by increasing leisure without lowering weekly wages and thus is in line with rather than opposed to the forces operating in the labor market to drive up the compensation of workers. As long as "internal reserves" could be mobilized and efficiency increased, as described above, no shortfalls in production would result from the shorter hours, hourly productivity would be sharply increased, and the additional leisure would be virtually cost-free to the Soviet leadership in terms of current goods and services. In addition, the shorter workweek (and the higher hourly wages) are inarT-icalur inducement for more housewives and young people to seek full or part-time employment, thus helping to alleviate the tight labor market situation.

Ill- Rationale for the Reduction in Hours

1reduction Jr.the solu* Ion

of sotte problems facing the Soviet leadership, the real motivation for the program for the reduction of the workweek is not so apparent. Thereumber of possible answers to the related questions of why the Soviet leadership originally decided6 to reduce the length of the workday and workweek, why they chose to do So ineriod, and why theyurther reduction in the workweek durings. These possible explanations are closely connected with one or the other of the problems discussed above but are not

" P-bove.

always mutually exclusive. Some explanations are buttressed more strongly than others by the evidence presently available, and much of the evidence will support several explanations. Exposition of the common and conflicting elements in the various explanations and of the evidence supporting each proposition, however, providesInsight into the possible motivations and goals of the Soviet leadership.

Because the reduction in hours helped toumber ofproblems, it is conceivable that the Soviet leadership originally thought of the program for the reduction of the workweek as asimultaneous solution to all of these problems. Thishowever, is contradicted by theinking of the wage program and the program for the reduction in hours and also by the) announcement of plans for further reduction in the workweek Although the regime apparently did not view the program initiallyolution to the entire set of problems set forth above, but only to one or some of them, its conception of the program may have broadened as the reduction in hoursrogram intended toarticular problem to one that served well on many fronts.

A. Motivation for6 Announcement

Considerable evidence suggests that the original proclamationlanned reduction in hours wasoliticalaneuver that was closely related to the intra-Communist Party conflict and that perhapsartial alternative to Malenkov's "new course" proposals. This possibility is supported by the fact that the proposal for shortening the workweek did not appear in the original draft directives of the Communist Party on the Sixth Five Yearut was included in the version approved by the Twentieth Party Congress and publishedonth Moreover, any such political proposal for raising the scale of living primarily by granting more leisure rather than more consumer goods in the manner suggested by the "new course" could be supported by powerfulprinciples and firm historical precedent. Unlike the "newhe programhorter workweek did not require or threaten eventually toiversion of investment from production of producer goods and other high-priority objectives to production of consumer goods. The program, therefore, did not violate the doctrine of the primacy of heavy industry. The charge of violating thiswas specifically leveled at the "new course" approach Inl/ about the time of Malenkov's resignation as Premier. The specific historical precedent was provided by7 program of the Council of Peoples Commissars for the trunsfer of all production workers in industryour workday. The provlsions of the early

decree, which was only partly successful and was rescindedre strikingly similar to those of the present program for thoin hours. The action proposed in the draft directives of tho Sixth Five Year Plan, therefore, had the familiar appeal of anand socially approved program.

B. Leisure

Whether the original motivation for6 announcement was political or not, it may be asked why the program was granted such prominence and actually carried out ineriod instead of earlier or later. Because complaints about unused reserves of labor had been made for years, tho timing of the program cannot be explained satisfactorily as an information lag. Ono answer to the question of timing, and one that is backed by considerable evidence, is related to the condition of the labor market and to the need to change the system of wages and work norms. Even though Increased leisure mayong-run goal of the Soviet leadership, the regime would not necessarily have to implement this goal in any given short-run period. During the recent periodight urban labor market, however, the regie* could expect the pressures of wage biddingtiffening of workerto changes in norms and piece-rate systems. Shorter hours clearly could make the requisite changes in wages and work norms more palatable to the workers and partly blunt the pressures for higher money wages implicit in the tight urban labor market situation. As noted above, Soviet planners evidently were aware that internal roserves existedumber of plants even though labor was becoming increasingly in short supply. Previous exhortations and pressures had failed to induceto "mobilize" these reserves. The Soviet leadership, thereforo, may have realized that two effects of reducing hourstheof internal reserves" and the inducement to students andto enter the labor forcewould more than offset the effects of the reduction in hours on the Input of labor, thereby stretching the available labor force while raising productivity and increasing levels of living. This realization could have comehen thein hours was linked with the wage program.

This explanation of the rationale for carrying out thein hourshat labor was or wasa constraint on production and more efficient ways of using It had to behat the regime was feeling more intenselyigher scale of living than it had in the recent past;hat managers, if forced, could obtain savings in labor force Although evidencend (a) hus been cited, theevidenceocs not eliminate the possibility that some

other method could have been found that would have "mobilized" these reserves and utilized them to obtain even greater increases in output.

A second possible answer to the question of why the regimeeriod in which to increase leisure is provided by A. Volkov, Chairman of the State Committee of the Council ofUSSR, on Questions of Labor and Wages. Volkov maintains that leisure has alwaysoal highly regarded by the Sovietand thateriod was the proper historic timeajor step toward fulfillment of this goal. In discussing this thesis Volkov:

Vodei Socialism, the productive forces are nor developed by lousndrriog (be basic proditcuve force*ibr buaao being. On ihr contrary, (bis development if subordinated to (be fuller satisfaction of (be requirement* of societyhole, of ibe intriett of tbe all-roundand mental development olh andoiiyrci* jof the Communist PanyJ, developing the Mafiist-Lcniniit teaching* on Socialism aod Communim. placed ocuum for reducing tbe working day at tbe top of the program to improve die material well-being of the people in the period of ih* comprebeasivc coasnueuonommunist society io tbe Soviet Union.

Whether the motivation for0 hours program waspolitical, economic, or ideological or was some combinationhole sequence of questions regarding the costs of theand the goals of the leadership needs to be answered. Was the gain in leisureree good, obtainable by the reorganization of production (or, in the Soviet terminology, the mobilization ofreserves)? If not, what Is Implied about the goals of the Soviet leadership? Even if the increased leisureree good ineriod, can it beree goodonger period of0 If leisure is not free in tbe near future, what is implied about the goals of the Soviet For example, has the Soviet leadership knowingly orcommitted Itself to giving up an opportunity for increased physical outputincluding perhaps missiles and other military or scientific productsin order toigher. Communist-style, scale of living for Soviet workers and employees?

This possibility is discussed further inelow.

If the increased leisure was obtained for the Soviet citizenithout sacrificing output or potentialof physical goodsthrough the utilization of internal reservesthe reduction in hours was both rational and highly beneficial to the Soviet leadership. This conclusion also applies if the programelatively small loss in output or potential output. If, as is indicatedonsiderable amount of evidence, the Soviet economy was producing during these years at close to maximum output under current technological conditions (including the manner in which labor washe utilization of untappedreserves of labor mighteduction in cost but could not Increase output significantly in the short run. Thus the Soviet leadership may have reasoned that the free or, at worst, the low-cost leisure obtainable from the program could be distributed to the Soviet worker-consumers to satisfy partly their desires for higher levels of living, toong-run Soviet goal, or to compensate them for the deprivation of the potentially higher incomes built into the old structure of wages and work norms.

2. Leisureost

Although the new leisure might have been considered by the Soviet leadership to be free or at least low-cost, very special rlrrisi stances (as outlined above) are necessary before such leisure is in fact free or low-cost, and, therefore, the program for increased leisure might have been costly In terms of the ou-put or potential output that was foregone.

In view of the regime's apparent penchant in the past for everexpanding output of physical goods at maximum ratea, any action that substantially reduced the potential for increased output might be regarded as irrational. It might be surmisedproper" set ofincentives, and Instructions could be devised to Induce and force Soviet managers to reschedule production, shift the newlymanpower to other areas, and increase total output. Thishowever, implies either that reserves exist in the utilization of other factors of production throughout the economysuch as capital and raw materialsor that labor was oubstitutoble for other factors of productionhort period of time. The experience of oany plants In overfulfilling their production and productivity goals suggests that some reserves did exist in the utilization of existing amounts of fixed capital and raw materials. It Is not surprising that plant managers, intent on finding better ways of using labor, also would discover methods of economizi:^raw materials and equipment, thereby permitting greater output. Soviet articles often describe

s sua

of policy formation but was wUIIiir toi"J DCrCaSCoaT

bytcatial for rapid wage increases

StSnaTJv?i 'CraC*anagers.

aa^nTiJjJ V rCeiae hSVeevaluated thelro^am

as one without costs.

* Alternatively the regime may have become politically com-

* For an example of this type of saving, see.


ouTB by the end8 (for noet workers). Unloos the preesure for "voluntary" labor or "planned leisure" reaches large proportions or unless soae other device for relengthenlng the workweek Isthe "mistake and correction" thesis would appear to have little support.

C. Leisure Purines

1. Motives and Costs

Three major possibilities stand out as reasonsurther reduction in hours of work duringo. As In the case ofationale, the first is connected with tbe goals of the Soviet leadership, and the second and third are connected with the state of the labor market and the problems of distributionlanned economy.

First, the Soviet leadership now may feel that thestated, long-run goal of providing Increased leisure under Communism can and should be Implemented*that the Soviet economy is sufficiently vital to provideaster rate of economic growthhorter workweek than the countries of the "capitalisty one or another means, all uocietiea establish socially approved limits on the length of timen hours, in years, or inerson may work, and there io evidence (as cited above) thatin work-hoursasic goal and commitment of theovemeot and the Soviet state. In making this decision the Soviet leadership may have knowingly chosen to forego some increased output of physical goods in order to obtain increased leisure for its people (together with any attendant benefits from propaganda). Even If the leisure that was provided to the Soviet peoplefree" good. It was free only because of the existence of largereserves" and the short-run difficulties (costs) of converting these reserves into increased production.

Attempts to use this new leisure in socially approved wayssuch as raising levels of education and participating in voluntary labor brigadesof course would reduce tbe long-run costs of the additional leisure to the leadership. Finally, attempts to plan leisure might moderate the dissatisfaction of those persons who ore bored and those for whom the new workweek is too short at given income levels. For the latter category tho inducement of publicor some compensation mightubstantial response.

* Inhrushchev noted that "the time is not far off" when Soviet workers will workay.

auction in AJTT1for the planned further re-

ur"wsive investment nrcyram -

ae tJO-percent Increaae above the amount of investment during IqIp-sS

f7 hiBb lnvestoen^ ^ne Pl^srecouping of tte

capital stock in many sectors of the economy. Therovthpopulation of labor force age, hoveverTwillwhich an increase Is expected. The much more rapidontinuation of the tight labor markerbalance Isl^gnly^ SEnT


mined exclusively or primarily by the magnitude and type If nil** mUStthe leaoershiras

How will the investment share of the national income in the desired "mix" be

In what form win the Soviet worker-consumers be compensated for their labor?

reaeed^ressurr?or most consumer goods." In the Soviet planned economy

goods policy of the Kalenkov type. Furthermore, if SouJdt=

theT* in w' planncrease leisure duringay be an attempt to divert or deflect future pressures

',thfSavings, and the possible readjustments of original plans for investment have been omitted.

for levelfl of consumption above those plannedto the degree that an Increase in the relative share of total Investment flowing into light Industry, certain areas of agriculture, and other consumer-oriented sectors is required. Tn this context the costs previously ascribed to the regioe's desire toong-term goal of Coa-nunlsa reappear as the costs ofertain level ofand, moreertain "mix" of physical It follows also that much of the cost in foregone output would be in consumer goods. The reduction in the workweek,, in fact, may have been regardedirst step in this direction whether leisureree good in the short run or not. Indeed, the attempt to deflect pressures for higher levels of consumption may be the thread of continuity running through the original, presumably political, con-mitmenthorter workweek, the acceleration of the program, and the plans for still further reductions in hours.

The costs of foregone output may be alternatively described as that larger aaouflt obtainableore labor-intensive method of production. It should be noted, however, that the output "mix" resulting Tram this method of production may not suit the tastes of the leadership formissiles, space research, steel, and coal or for social insurance, public catering, and other forms of public consumption.

In addition to the explanation suggested above, there is evidence that the Soviet leadership is consciously attempting toleisure and public consumption for private consumption. has specifically excluded from the US-Soviet economic "race" any major competition in production and ownership of private automobiles,imilar prejudice against wasteful or socially unapprovedis apparent throughout Soviet economic publications. In like fashion the doctrine of the primacy of heavy Industry ascribes alow priority to output of consumer goods. Furthermore, Soviet wage theory, as enunciated In articles on the wage and hoursand in textbooks, insists that the rata of increase in average wages bo loss than the rate of growth in If plane are met, therefore, the relotivc share of production being distributed as wages will decline secularly. This pattern has been Justifiedaa the natural concomitant of the movement toward Coomninism, during which an increasing shareorker's real Income is derived from his "needs" rather than from his In practice the ideology coupled with wage theory suggests that social benefits (or governmental transfer payments)such as old age and disabilitythe provision of kindergartens, boarding schools, rest and vu-cution ureas, and other state grants like "free" housingwill increase more rapidly than average wages, therefore representing a

growing proportion of each Individual's real income.* Whatever may be the justification for this policy in Marxist or humanitarian terms, it gives the government control over the allocation of the bulk of the annual increase in national income.

Finally, the further reduction in length of the workweek might be explained as an attempt torowing level of Demographic data suggest that annual additions to the Soviet population of labor force age will begin to grow rapidly2 as the post-World War II babies reach labor force If, in addition, the new automated equipment is highly labor-saving on netsurplus" of labor might result. This Interpretationthat further (above-plan) increases in output are effectively prevented by some capital, raw material, or other constraint and that the redundant labor cannot be substituted for these factors even in the long run in order to eliminate or ease the constraints.

There is little evidence to date to support thisof the Soviet rationale, and previous experience suggests that the Soviet government would attempt to reduce any such "surplus" by means otherhortening of the workweek. Most probable would be programs for increased and perhaps compulsory retirement of agedand for an expansion of educational opportunities for young people. These actions, of course, would work in the oppositefrom those now employed to increase the participation of young people and housewives in the labor force.

2. Prerequisites and Prospects

As noted above, minimum wages are to be raised to hOO rubles (rural)ubles (urban) per month2 and againubles per month These increases in minimum wages will benefit primarily the low-paid groups such as guards, Junior service personnel (such as Janitors andpprentices, and clerical personnelthat is, those persons who do not directly participate in the rising wage levels resulting from growth in productivity.

* This statement, of course, waives the vital questions of (l) the "equitable" distribution of the social, benefits,hether the social service rendered is valued as highly by the recipient as by the giver (that is, thehether social, political, or marketpermit dissatisfaction to be communicated to the policymakers. According to the Seven Year, minimum pensions also are to be increased3 and

Because it seems unlikely that the newly establishedof wage rates and "technically based work norms" will be overhauled

again bo Boon, the reduction of the workweek couldeduction in weekly earnings for those workers whose earnings are closely tied to production, unless the reduction In hours is compensated for by increases in output. The Soviet leadership expects such Increases in output from its highly touted automation and complex mechanization program. The early announcement of the plan for further reductions in the workweek and theyear) period established for itssuggesteriod of preparation similar to that useday be employed. The object of this new preparatory period would bo the some as for the present oneto assure that weekly wages, output, and productivity do not decline as weekly hours per person arc reduced,"

* ifferent soquence of events may occur. To the degree that the new capital can be employed to increase output per person much faster than average wages duringeriod, an upward adjustment in hourly wages could be made at the time of the changeover that would be sufficient to offset the effects of the reduced hours on weeklywith no increase0 in the relutlve share of the total product being used for consumption.

If this preliminary analysis isurtherof the workweek may depend heavily on the successfulof new technology and on the ability of the Soviet piaiming-management system to install and use these new techniques efficiently. If the output gains from new technology are not sufficient to provide for this Increased leisure without reducing weekly wages (presuming that the alternative of increasing labor's wage share of the total product Ishe reduction in hours cay not take place. Itossible, moreover, thatn additional amount of leisure will not be so highly regard/id by tho Soviet worker-consumer as it apparently was.


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Original document.

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