chapter  5
23 Pages

Wage-Earners: Winners and Losers

ByBertram Silverman, Murray Yanowitch

This chapter focuses on a principal group of "winners"—the various strata of entrepreneurs that emerged in the course of the privatization process. It examines the emergence of a group of "losers"— the unemployed who, like legally recognized private entrepreneurs, represent a comparatively new phenomenon in Russian society. The context of Tatiana Zaslavskaia's discussion indicates that the substantial decline in the real income of the bulk of wage-earners between the last years of Soviet rule and 1994-1995 was the critical factor in her characterization of the market reforms' social cost as excessive. The sharp decline in real wages exhibited at the beginning of 1992 reflects the explosion of prices after liberalization, a process unaccompanied by anything approaching a comparable enhancement of wage rates. The emergence of new legal forms of enterprise ownership along with the continued existence of traditional state-owned firms is another important influence on widening wage differentials.