Wage Differentiation

under socialism the setting of different wage levels for different employee categories in individual sectors of the national economy and regions of the country. This differentiation reflects differences in the duration and intensity of labor by the workers and in the complexity of their working conditions, in labor skills, and also in the social significance of one or another type of labor. At particular periods, those types of labor that have assumed special significance for the national economy have been encouraged.

The basic principles for setting wages in the USSR, as elaborated by V. I. Lenin and formulated in the first governmental decrees on the wage question (1918-20), ruled out wage leveling. Lenin emphasized that the creation of a material interest on the part of the workers in the results of their labor is the key to the greatest possible increase in labor productivity and to increasing the entire social production on this basis. These principles for organizing labor are precisely the ones that are reflected in the wage differentiation policy followed by the socialist state in the different stages of its development. The policy elaborated by the Twenty-third and Twenty-fourth Congresses of the CPSU of increasing the role of economic incentives in production development has required that, in paying wages, fullest consideration be given to the labor imputs of each worker and the collective as a whole. An improvement in wages in accord with the quantity and quality of labor is one of the determining aspects for raising the standard of living of the people during the ninth five-year plan of 1971-75. The Directives of the Twenty-fourth Congress of the CPSU provide for raising minimum wages, increasing the wage rate and salaries for the medium-paid employee categories, and improving the wage ratios for the national economic sectors and the employee categories with regard to labor and skills.

For retaining personnel in the economically promising regions of the USSR, most of which are remote, an increase in wages and broadening of certain benefits have been envisaged for production and clerical workers.

Within the general system of wage differentiation, a distinction is made between intrasectorial, intersectorial, and interregional differentiations. The intrasectorial and intersectorial differences in the wage level are determined through the wage rate system and the use of incentive wage systems.

The intrasectorial wage differentiation establishes differences in wages in terms of the skill and vocational employee groups, in accord with the complexity of the labor functions performed and in terms of the production and working conditions. For example, the spread in the wage rate level in terms of skills (the wage rate spread of the workers) has been set at 75-80 percent; in underground work the first category rates are 15-20 percent higher in comparison with the wage rate of workers employed at the pitheads and quarries in the extraction sectors of industry. In jobs involving difficult or harmful working conditions, the first category rates are 8-15 percent higher than for normal working conditions. The rates of pieceworkers, considering the great intensity of their labor, have been set at a higher level than the rates of timeworkers.

Both in the USSR and in other socialist countries, the spread in the wage levels in terms of complexity and national economic significance (that is, the wage differentiation) has been reduced. This reduction is in keeping with the rise in the technical level and the improvement of production organization, which lead to an overall rise in the complexity of work (with a simultaneous reduction in the range of complexity) and to a reduction in the differences in the importance of the individual types of labor. Thus, in Soviet industry, the excess of the average monthly earnings of engineers and technicians over the earnings of manual workers has been reduced from 78 percent (1950) to 36 percent (1970).

The wage differentiation for working conditions (with the working conditions constantly being improved) has increased, an increase caused by the need to improve material incentives for attracting workers to jobs with abnormal working conditions.

The intersectorial wage differentiation is influenced primarily by the particular features of the working process in the individual sectors (the content of the labor functions, the general sectorial working conditions, the vocational and skill structure of the workers, and so forth), as well as by the role and importance of the various sectors in technical progress and the development of the entire national economy. The intersectorial wage level ratios are very dynamic because of this. Thus, in 1940 the average wage level for production and clerical workers in Soviet industry (the industrial production personnel) was 3 percent higher in terms of the average wage level in the national economy, whereas in 1970 it was 9 percent higher. The average wage level for transport workers in relation to the average wage level of the national economic workers was 112 percent in 1970 in comparison with 105 percent in 1940. Correspondingly, the average wage level of construction workers in 1970 was 123 percent, in comparison with 110 percent in 1940. During these same years there was also a significant rise in the wage level for the workers of the sovkhozes and for auxiliary and other agricultural enterprises, bringing them closer to the average wage level of the national economy.

The interregional wage differentiation is determined by the sectorial production structure in the regions, by the importance of the economic regions and the prospects of their development, and by natural and climatic conditions. The differences established by the state in the wage levels for the various regions of the nation are intended to provide equal conditions for the physical reproduction of the labor force in connection with differences in the consumption structure and the price level for a number of consumer goods. The establishing of wage differences for the regions is also dictated by the need to attract and retain personnel in those regions where a manpower shortage is felt. State regulation of wages for the regions of the nation is carried out through a system of regional wave coefficients. The maximum amount of the current coefficients (1970) is 2.0 in terms of earnings, and the minimum amount is 1.1.