By Renfrey Clarke
MOSCOW — In one of the largest political gatherings in the Russian capital since the late 1980s, tens of thousands of workers demonstrated near Red Square on November 5 in a trade union-organised rally "For Work, Wages and Social Welfare". The demonstration was part of a day of protest actions called for November 5 by the country's main labour movement body, the Federation of Independent Trade Unions of Russia (FNPR).
As well as the Moscow meeting, which according to Associated Press drew 37,000 people, other notable gatherings took place in Vladivostok in the far east, where a reported 20,000 people demonstrated; in the Kuzbass coal region and Omsk in Western Siberia; and in St Petersburg.
Interior Ministry sources reported that a total of 320,000 people took part in 334 rallies and marches in cities around the country. In addition, well over half a million workers joined protest strikes lasting from an hour to the whole day. The main demand was for the prompt payment of wage arrears, which are mounting rapidly and have now reached catastrophic levels.
In a survey reported on November 1, more than half of respondents in St Petersburg reported that payment of their wages, pensions or scholarships was not up to date. In relatively well-favoured Moscow, the corresponding figure was 39%. Most of the people interviewed blamed the federal government.
According to the FNPR, the total of overdue wages in Russia now stands at 42.8 trillion roubles, about US$7.9 billion. This sum is close to a month of the country's total wage bill. Labour Ministry figures indicate that the wage debt is now 2.7 times its level at the beginning of the year, and in the past few months it has grown at a staggering rate. FNPR spokespeople cite rises of 17% in September and 16% in October. Many workers have been left without pay for three and even four months.
In the struggle to force employers to meet their wage obligations, the FNPR's all-Russian day of protest is an important development. It has lent force to a swelling tide of local and sectoral labour action; during the first nine months of 1996, strike activity ran at about three times the level of 1995. Nevertheless, the movement is still only beginning; despite the dire situation, the absolute levels of labour action have been modest compared with strike waves in the west.
The State Statistics Committee recorded work stoppages at 3767 enterprises and organisations during the first nine months of 1996, with a total of 356,000 workers involved. The number of workers who went on strike during this period was not many more than one in 200 of the total work force.
The FNPR's day of action was much more impressive than similar coordinated protests that the federation has held in previous years. But the response from labour organisations was still patchy, even among the federation's member bodies. The FNPR reported on November 4 that 60 of its 122 affiliates were organising demonstrations, marches or pickets. Of 43 sectoral unions, 13 were calling for strike action, as were 28 of the FNPR's 78 regional federations. The most determined strikes were in the hard-hit education and health care sectors, as well as in the coal industry and defence enterprises.
The outstanding example of militancy on November 5 was provided by the coal miners. Russian Independent Union of Coal Industry Workers chief Vitaly Budko reported that 460,000 miners had gone on strike, with 198 of 218 underground pits ceasing work along with 49 of 69 open-cut mines. According to union spokespeople, the miners were angered by the government's failure to observe a wage payment agreement reached after a bitterly fought strike in August.
While the FNPR leadership has sought to keep the demands of its "autumn offensive" within a strictly economic framework, labour activists in coal centres have often moved resolutely to develop the political aspects of their struggle. Leonid Astafyev, president of the Association of Mayors of Mining Cities, noted on October 31: "In some places such as the Kuzbass, alternative power structures are being formed, so-called salvation committees, which are attempting to take over the role of executive power".
Why have the wage debts to workers reached such heights? Pro-government commentators blame privatised firms whose managers prefer to use company funds for speculation instead of paying wages and taxes. Such abuses are clearly very common; the government provides a strong inducement for managers to divert funds by offering sky-high interest rates to purchasers of state short-term securities.
The proportion of the outstanding wage debt owed by the federal government is only a few per cent of the total; the Kremlin's share was put recently at about 1 trillion roubles compared with 33 trillion for privatised enterprises and 7 trillion for regional and municipal administrations.
However, Russians are not deceived when they insist that the federal authorities bear a key burden of responsibility for the plight of unpaid workers. Many enterprises that are legitimately unable to pay wages are victims of drastic cutbacks of state spending in areas such as defence procurements and, in some cases, of the arbitrary withholding by the state of payment for goods and services already delivered.
The link between wage arrears and government policy is suggested by the fact that wage debts have rocketed during precisely the same months when the government has been moving desperately to slash its outlays. In the early months of this year, the handouts of President Boris Yeltsin's re-election campaign were financed largely through the sale by the state of short-term securities at real annual rates of interest exceeding 100%. Six months later, the election campaign debts are falling due, and the cost of servicing the government's internal debt has ballooned.
Particularly for workers in the so-called "budget area", the chances of seeing any pay in the coming period are grim. One of the most sensational information leaks from the Moscow bureaucracy in recent months has been a report, dated October 17, from finance minister Aleksandr Livshits to Prime Minister Viktor Chernomyrdin. This document includes the ominous remark:
"If the crisis situation ... remains, October expenditures worth up to 7.8 trillion roubles could be left unfunded, which is tantamount to the nonpayment of 85% of monthly wages, salaries, stipends and other types of pay to all individuals who are funded from federal budget revenue."
Livshits did not present the shortfall in terms of the proportion of bondholders' profits that the government was in danger of being unable to pay. For Russia's rulers, allowing teachers, nurses and miners to starve without their wages is clearly an acceptable if regrettable choice. But defaulting on the profits of securities-market speculators — even those set to draw many times the usual international rate of return — is something the government refuses even to contemplate.