Toss Another Match Into The Russian Tinderbox: Labor

On May 18, nearly half of the Russian passenger-airline crews scheduled to fly refused to take off, scrapping flights between many domestic cities. They were protesting plummeting safety standards that have contributed to several recent air catastrophes. Later that day, the pilots called off the strike after the Yeltsin government and state deputies agreed to talks.

It was a quick end to a potentially crippling strike. But Russian leaders from Boris Yeltsin down are wondering how long their luck can hold. Russia's 60 million workers are fed up with their country's economic mess and are taking action. From January to April alone, 288 strikes broke out, compared with 264 for all of 1993. Most of the actions to date have been short-lived. But the complaints from workers keep getting louder. Many now work in increasingly dangerous conditions. Many work for no pay. Many are paid in rubles that buy less and less. It's a formula tailor-made for a season of labor turmoil, which will make Russian politics even more volatile.

The workers are about to have more reasons to protest. Their factories, choking on a huge collective debt of 14 trillion rubles ($7.4 billion), just don't have money to upgrade plants, buy products from each other, or make payrolls.

Something's got to give, and the catalyst may be Russia's fast-moving privatization program. It is entering a new phase that will vastly restructure many Russian industries, tossing hundreds of thousands out of work. The plan now is for experienced professionals to buy up controlling interests in the companies and take the tough measures needed to improve performance. At the same time, the government plans to curtail subsidies to failing state-owned factories and so force them into bankruptcy. At least 1,200 plants with workforces greater than 1,000 will be the first to go, officials say.

HIDDEN JOBLESSNESS. By autumn, some predict, unemployment rates could shoot up as high as 20% in some industrial centers. Currently, official unemployment is only about 2%. Yet so-called hidden joblessness may be as high as 18%. That higher figure includes workers forced to take part-time shifts because of plant slowdowns and idle hands kept on by managers who want to avoid paying severance. But permanent layoffs now seem inevitable, says Alexey Sourikov, vice-president of the Federation of Independent Trade Unions of Russia. "By the end of the summer," he says, "if we don't try to prevent destructive forces from gathering steam, we're in for a very, very hard time."

Already, single-industry towns specializing in arms production, timber, metallurgy, and chemicals have been hit hard as production has dropped by some 25% since the first of the year. In the weaving center of Ivanovo in central Russia, for example, only about half of the labor force is working at all. Women workers suffer the most. They are usually the first to be let go but often last on the list for job retraining programs.

TOADIES NO MORE. Elderly workers are also at risk. Dmitiri Y. Usachyov has worked at Moscow's giant Zil auto plant for 50 years. He is staying on as a part-time metal caster to earn 150,000 rubles a month ($78). He needs the money to supplement a measly monthly pension of 87,000 rubles ($45). "Sausage costs 17,000 rubles a kilo," says Usachyov, standing at the grimy plant's front gate. But Zil's orders are dropping, and Usachyov and other older workers may soon be on the street.

Despite their protests, unions have displayed little power so far. At the Zil factory, a union newsletter plastered on a wall apologizes for not doing a better job. "Labor unions," sniffs Zinaida K. Voinova, a Zil worker. "They can throw them away."

Labor boss Sourikov acknowledges such problems, but notes that before the fall of communism, union leaders merely acted as toadies for party managers. They are only just beginning to learn the fundamentals of confronting management, negotiating contracts, and mapping out effective strike strategies.

Sourikov is hammering away at the government to do something about the flagging economy. And President Yeltsin is finally responding with tax cuts, the elimination of export quotas, and tax holidays to entice foreign investors.

Sourikov is also stumping for retraining programs. He says there are a lot of job opportunities in the fast-growing private retailing sector. He also sees hope for lawyers, economists, accountants, and those skilled in foreign languages. But such specialists are a minority, and he points out that housing shortages and residency restrictions keep workers from moving easily to new jobs.

While the government confronts the issue of unemployment, it's hoping that the strikes that keep occurring won't coalesce into a regime-threatening force. So far, the workers' haven't been able to pull off anything like the huge strikes that helped bring the Bolsheviks to power in 1917. But the anger is there, and effective labor leadership could eventually turn it into a tremendous force.