A good indicator for assessing and understanding both the growth of the 1960s and the decline of the 1970s is to be found in the complex of factors which, astonishingly enough, created a growing labour shortage.
As we saw in Part Two from Gosplan’s own research, in 1965 the main problem stemmed from a distorted geographical distribution of labour: some areas had a surplus, and yet it was difficult to persuade workers to move; others experienced shortages that were difficult to make good.
As the years passed, it became ever more clear that planning methods had not progressed sufficiently beyond the original 1930s model. This consisted in allocating investments in abundance, while relying on the system’s ability to mobilize massive labour reserves when and where required. Everything was different now. In the first place, the planning and education systems had to train large numbers of qualified personnel – technicians and high-level specialists, as well as scientific researchers – and this was a task they acquitted rather successfully. But from 1968 onwards, an entirely new problem arose: the spectre of an outright labour shortage (not just of certain categories) – and without any real prospect of remedying it.
How are we to explain such a situation in a country of 270 million inhabitants, a higher population than the USA’s, but with an economy and national income that were much smaller? In the previous chapter, the report we summarized at some length revealed that ‘waste’ was absolutely central. The factors underlying it also hampered productivity and allowed for growth exclusively through an injection of huge sums of investment, which issued in quantitative expansion – a formula that could only lead, in the more or less short term, into a dead end if nothing was done. Some had grasped this logic at a time when the Soviet economy still seemed to be in reasonably good shape. The plan was unable to ensure a fit between investment targets, output, and an adequate supply of labour. Numbers for the quantity of labour required did exist, but there were no coherent policies and measures for guaranteeing its supply. That in turn would have required appropriate social policies. In the past, labour requirements had been met by the spontaneous gravitation of labour or its mobilization. These mechanisms were no longer operative, and everything was complicated still further by demographic factors.
The articulation of the relevant factors in a situation where labour could no longer be ‘mobilized’ was analysed by an expert in 1968 before a selected audience of top officials. The lecturer – E. V. Kasimovsky – was head of the Research Institute of the Russian Federation’s Gosplan, and his lecture was entitled ‘Problems of Labour and the Standard of Living’.1 His richly documented presentation surveyed the problems of labour, labour productivity, and the geographical distribution of labour resources. Here we shall cite some key points.
In recent years, large urban centres had experienced labour shortages, to the tune of tens of thousands not only in Leningrad but also in Moscow, Kuibyshev, Cheliabinsk and Sverdlovsk. The situation was even worse in Siberia. ‘This is a new period’, said Kasimovsky, ‘and we have never seen anything like it before.’ No doubt demographic projections held out the hope that the next five-year plan would see a strong influx of young people into the labour market. But they also anticipated that this increase would drop off thereafter. In 1961–5, 2.6 million young people had arrived on the labour market; an additional 4.6 million were expected for the 1966–70 plan and 6.3 million for 1971–5. But the figure subsided to 4.6 million for 1976–80.
Added to this decline in the number of young people arriving on the labour market was the fact that the introduction of compulsory secondary school education would rule out employing fourteen- to fifteen-year-olds in production. In 1965 the Russian Federation had 287,000 young workers of that age, and it would still have 263,000 in 1970. But the figure would fall to 130,000 in 1980.
Obviously, demographic factors were introducing a new blockage. The predicted reduction in the youth cohorts entering production was attributable to falling birth rates, which had been especially marked since the beginning of the 1960s. In 1950 the rate was still 27 births per 1,000, but in 1967 it was no more than 17 per 1,000 (14.5 per 1,000 in the Russian Federation itself). Despite the drop in mortality in these years, falling birth rates had substantially reduced natural population increase, from 17 per cent in 1950 to 10 per cent in 1967 (less than 8 per cent in Russia). Birth rates had fallen in the twelve Soviet republics – especially in Russia, the Ukraine, Belorussia, Moldavia and Kazakhstan. The phenomenon was especially troubling in the Soviet Union’s two metropolises: between 1960 and 1966, Moscow’s birth rates had fallen from 7 to 2.2 per 1,000 and Leningrad’s from 6.4 to 3 per 1,000. According to some estimates, in 1972 Moscow’s mortality rate would be 3 per cent higher than its birth rate, and in 1973 Leningrad’s would be 2 per cent higher. In 2000, the figure for deaths would be 2.5 times that for births – equivalent to a population decrease of several hundreds of thousands.
Over the Union as a whole, the drop in birth rates in towns was higher than in the countryside. But an utterly novel trend had emerged: overall birth rates in the Russian Federation, where a quarter of the USSR’s rural population lived, were lower than in the towns. Of the seventy-one administrative units of the Russian Federation, eighteen had birth rates below those of towns. In areas like Novgorod, Pskov and Kalinin, birth rates were lower than mortality rates.
The rate of reproduction of the population was plummeting. For the whole USSR, it had dropped from 1.4 in 1938–9 to 1.12 in 1968, which was lower than that of leading capitalist countries (1.56 in the USA, 1.13 in Canada, 1.38 in France, and 1.44 in the UK).
In the USSR (and the Russian Federation), women had an average of 2.6 children (1.9 in towns and 3.3 in the countryside). Research by the Central Statistical Office indicated that an average of 3 children was required for normal population reproduction. This meant that the urban population was no longer reproducing itself, but growing only thanks to an influx from the countryside.
The decline in birth rates in the USSR was more rapid than that experienced by the other socialist countries and the capitalist countries. What would its effects be on the supply of labour? Some demographers argued that it presented no threat to living standards. But Kasimovsky differed: if the decline in births persisted, workers’ living standards would suffer.
Population density remained low in the USSR – thirty-two inhabitants per square kilometre – and was lower still in Siberia. Falling birth rates would slow down any increase in population density and thus further reduce the prospects of populating Siberia, which was now a major problem. If birth rates did not pick up, the outcome could be stagnation, or even reduction, in living standards, which were already too low.
Births had fallen during the war and had not yet recovered. The structure of the population in terms of sex and age had changed. In the first instance, this involved the disparity between men and women. But there was also a gap in the 30–50 age groups. In 1959, the 20–24 age group counted 106 women for 100 men in towns and 98 women for 100 men in the countryside. In 1967, the corresponding figures were 98 women for 100 men in towns and 95 women for 100 men in the countryside. Thus, the situation had almost been normalized in the towns, but it had deteriorated in the countryside. For the 25–29 age group, in 1959 there were more women than men in the towns; and in 1967 the situation was worse. In the countryside there were 131 women for 100 men. These imbalances represented a serious handicap in terms of labour supplies and demographics. They obviously had a major impact on birth rates and the reproduction of the population.
The sharp increase in the number of women employed in production (19 million in 1950 and around 40 million in 1968) was also a factor. The proportion of women in production in the Russian Federation had doubled. But the birth rate among working women (workers or employees) was 30–40 per cent lower than that of women working at home or on the family plot. The main reason was the greater difficulty experienced by working women in caring for their children. Many of them had no relatives to help out and could not afford a nanny. In many towns there were no places in the crèches and kindergartens. The fact that women (several million of them) were often employed in very heavy, non-mechanized labour – mining, machine construction, metallurgy – was a further element. Kasimovsky reckoned that the time had come to revise the list of jobs open to women, so that they could both work and bear children. Another well-known factor was birth control: the number of abortions exceeded that of births.
In the first quarter of 1968, the research institute of the Russian Federation’s Gosplan, the Health Ministry, the Finance Ministry and the Central Statistical Office studied the causes of falling birth rates in thirteen large towns and ten rural regions in Bashkiria, Krasnodarskii krai, Kaliniskaia and Pskov. The responses of 1,600 women asked about the reasons for their abortions confirmed the results of an earlier inquiry among 26,000 women: 22 per cent of them stated that they did not want a baby because of inadequate housing, which would only deteriorate with the arrival of a baby; 18 per cent mentioned the difficulty of finding a crèche; 14 per cent believed that their income was insufficient and would fall with a baby. These three reasons accounted for half of the causes invoked.
Although house construction had been accelerated, the situation remained unsatisfactory in many towns. Places for children in crèches and kindergartens were also increasing, but only half of existing demand was met. Moreover, despite the rise in the minimum wage to 60–70 roubles a month, household incomes remained too low – especially in the case of single-parent families, which were quite common. Benefits were given to only a small number of people, and more substantial help was offered to women only with the birth of their fifth child. In 1967 a mere 3.5 million women received family allowance. Of these, 2.1 million had five or more children. Many women had abortions for health reasons, often as a result of heavy labour. Because the period of convalescence following an abortion was not paid, many women resumed work immediately, which often led to complications and even sterility.
Birth rates also suffered from increased instability in conjugal relations. In recent years, the number of divorces had risen steeply, especially in the countryside. In 1960, there were roughly nine marriages for every divorce; by 1966, only three.
In the conclusion to his report, Kasimovsky indicated that, some months prior to this inquiry, a population study laboratory had finally been created at Moscow University (an institute of the Academy of Sciences that had existed before the war had not yet been re-established). Measures to increase the birth rate and a study of the whole issue had been submitted to the government and the Central Committee.
We can assume that some of the problems were attributable to living standards in the USSR. An author like Mironov would be inclined to detect the effects of modernization, which are evident in all urban societies. But that would be to underestimate some of the socially deleterious effects of modernization, especially in Soviet conditions. We must therefore round off his unduly positive picture by pointing to dangerous side-effects overlooked by him.
Falling birth rates were not the only reason for the problem in recruiting labour. It was becoming increasingly difficult to tap the reserves represented by those who still worked at home or on private plots. In 1960 the people engaged in such activities still represented between a quarter and a fifth of the reserve labour force (19 per cent in Russia), but by 1970 the percentage was reckoned not to exceed 8 per cent. In addition, a distinction had to be made between those employed in this sector and real reserves. In fact, only half of those so employed accepted the idea of going to work outside their homes (and half of them stipulated various conditions). Moreover, the method used to count this potential labour force was faulty and a source of disappointment. In the Russian Federation, 5,700,000 had been recruited to work in the state economy in 1960–5, but the total for the next plan was 1,000,000. Projections for the one after indicated that 500,000 might be the maximum, and the number of people working their own plots might increase sharply. Furthermore, there was a great deal of regional variation in the situation. Let us note in passing that the majority of those working in and around the house, cultivating plots, or keeping animals, were women.
Thus, labour reserves were pretty much exhausted. Some local resources still existed here and there, but were difficult to release. Many people preferred working at home, since it was more likely to improve their standard of living.
Another possible source of labour was pensioners. The population was ageing and the share of pensioners in it was rising. Many areas that lacked labour had developed social services to attract pensioners. But this was a limited source. In 1965, 1.9 million pensioners were employed in the state economy; estimates anticipated 2 million in 1970 and perhaps 2.5 million in 1980.
The authorities certainly understood that development depended less on labour reserves than on improving labour productivity. Yet labour productivity rates, measured over the long term, were in decline. Labour productivity had increased by 7.7 per cent per annum between 1951 and 1960, but only by 5.6 per cent between 1961 and 1965. In 1962 there had been a temporary recovery to 6 per cent. In 1967, however, there was a new drop as a result of a sharp decrease in growth in agriculture. The rate of growth in some leading industrial branches was still high. Yet overall, it lagged substantially behind the main capitalist countries. In the USA, labour productivity was 2.5 times higher in industry and services and 4.5 times higher in agriculture (according to the Soviet Central Statistical Office). The experts sounded the alert: if productivity did not increase, the USSR would not even catch up with the West by 2000! Improving this crucial indicator was now an overriding task: the means and measures to achieve it had to be found.
Better specialization and cooperation between enterprises and industrial branches was indispensable. Decisions to this effect had been taken for Leningrad and Moscow, but they would take some years to be implemented and bear fruit. The most urgent thing was to mobilize labour reserves. However, their geographical distribution presented an additional problem. Of the 128 million inhabitants of the Russian Federation (to which we shall restrict ourselves here), only 25 million lived in eastern regions (basically meaning the Urals and especially Siberia). This imbalance was hampering the economic development of these regions, where the strongest economic growth should have occurred given the abundance of natural resources there. To achieve the targets that had been fixed, it was necessary to transfer 2.6 million people (the period being referred to is apparently 1968–80). Yet in the last fifteen years, population movements had been in the opposite direction. People were leaving Russia for other republics to the tune of 200,000 a year on average and the figures for the eastern regions were even higher. Between 1950 and 1960, Russia had lost 2.8 million inhabitants to other republics. Even more disturbing was the fact that in Russia itself people were leaving areas where labour was in short supply, and moving to areas where there was a surplus. What attracted them to Northern Caucasus or the Stavropol region was a better climate and more developed small-scale farming.
The countryside suffered from its own share of miseries. Labour productivity was between four and five times lower than that of the USA, but with regional variations. The sex and age imbalance in the rural population was getting worse. There was high, unplanned migration to the towns, which was all the more alarming in that 73 per cent of the migrants were under the age of twenty-five and 65 per cent of them were women in the same age group. The proportion of young people and of thirty- to forty-year-olds in the rural population was shrinking, whereas that of older people or those incapable of working was expanding. Those who were leaving were precisely the ones whom the countryside most needed to service the increased mechanization and electrification of agriculture. In 1968 there was only one able-bodied male for every two kolkhoz households. The average age of a working member of a kolkhoz was fifty and many worked beyond retirement age.
The overall picture was thus disturbing. The dangerously distorted age profile and the conjunction of declining labour productivity and departures for the towns were bleeding the countryside dry. Accordingly, this traditional, seemingly inexhaustible source of labour could no longer even provide for its own needs. The search for labour reserves now resembled scraping the barrel. Among those who preferred to work on their own plots (particularly women), many would only accept part-time work outside the home. But their number was also dwindling rapidly – not to mention the fact that jobs which removed them from their plots (especially in the countryside) would entail an immediate drop in food production.
Did this already amount to a crisis? At all events, one was certainly brewing. The documents we used in Part Two indicate that, according to Gosplan’s experts, the auguries for the 1971–5 five-year plan were far from favourable.
As labour became a rare commodity, there was a proliferation of studies, research and conferences. A continuous flow of texts ran from Gosplan to the Central Committee and from the State Labour Committee to the Council of Ministers. One expert put it bluntly: ‘For the country as a whole, I believe that our labour resources are practically exhausted.’ When we recall that at the same time many, if not all, enterprises were heavily overstaffed, the absurdity of this complete deadend on the labour question (to say nothing of other aspects of the economic system) should have served to put the leadership on constant high alert. And yet, the enormous flow of information and analysis, which offered a picture of monumental mismanagement and foresaw this supposed super-state rapidly approaching a point of no return, created no visible stir. The Politburo was content to produce endless resolutions enjoining everyone to be more efficient.