Publication: Monitor Volume: 3 Issue: 60

As Russian workers gear up for tomorrow’s nationwide strike, a government spokesman said the authorities are working "day and night" to complete a cabinet reshuffle and find ways to deal with wage arrears. Prime Minister Viktor Chernomyrdin is due to tell a press conference today what steps the government plans to take to clear wage and pensions arrears; he will be flanked by First Deputy Prime Ministers Anatoly Chubais and Boris Nemtsov. (Reuters, March 26)

Russian trade unions estimate that workers are owed over 51 trillion rubles ($8.8 billion) in back pay, of which the state owes 10 trillion. This estimate would make survival for most Russian households impossible if the official data on personal incomes is to be believed. Fortunately for the Russian population, official wage and other income data appear grossly to understate reality. Recent estimates by the Moscow-based Russian Market Research Company, derived from a survey of 2,000 households across the country, provide some indication of the likely gap between official data and reality. They put average monthly personal income at $205-220.

That is about twice the official figure. The official data would make total wage arrears in January equivalent to about 24 percent of monthly GDP. (Financial Times, March 26) Goskomstat’s data for 1995 show total reported wages and salaries equaling only 33 percent of GDP. (Rossiisky statistichesky ezhegodnik 1996) If that ratio of official wage to official GDP figures still holds, wage arrears would be nearly three-quarters of total monthly wages and salaries due. But if the Russian Market Research Company’s estimates of personal income are nearer the mark, arrears would be of the order of a third of monthly personal incomes. This is still a daunting social problem, creating horrendous problems for many people, but it makes it somewhat easier to understand why Russia has not yet experienced an Albanian-style social explosion.

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