Scarcity of Skilled Workers : Most Soviet Pensioners Still Work
Pavel M., a factory foreman, earns 180 rubles a month, about $208, but he also draws a pension of 135 rubles a month ($156), and it definitely improves his standard of living: He owns a motorboat that he uses for summer cruises on the Moscow River.
“Those extra rubles sure come in handy,” he said recently.
Pavel is not alone. Six of 10 persons who receive pensions in the Soviet Union are still working and draw a paycheck as well. This optional system of “working retired” strengthens individuals’ buying power and discretionary income but was actually undertaken for another reason.
From the state’s point of view, Pavel and others like him who stay on the job past retirement age represent the solution to what the Soviet Union regards as a persistent problem, a scarcity of skilled workers.
In some areas, Soviet officials say, the labor force is actually declining. In most of the country, the number of workers is simply not growing fast enough to keep pace with economic growth, they contend.
Some Western diplomats challenge the Kremlin’s view on whether there really is a shortage.
“The problem is not a labor shortage but a failure to make the best use of the workers that are available,” an economic specialist in a Western embassy said.
At any rate, the result is to blur the “normal” retirement age, which is 60 for men after 25 years on the job and 55 for women after 20 years.
60% of Basic Wage
The average pension, according to Soviet officials, represents 60% of a worker’s basic wage. Pay levels are relatively low--they average about 180 rubles--but the state keeps down the price of food, rent and other living costs.
Many retired persons, nearly one in three, have been retired for more than 10 years, and their pensions were calculated on the basis of lower wages. As a result, some pensions are as low as 50 rubles a month, about $57.80. Even a pension calculated at present wage levels would be only 118 rubles, about $136.35.
The maximum pension for the highest-paid industrial workers--such as coal miners and steel mill hands, for example--has been set at 160 rubles (about $184.89) a month.
“The pensions are not large enough to support someone unless he or she is living with the family,” a Western analyst said, “so there is a strong incentive to collect a pension and keep working, too.”
The government provides more incentive for some workers to stay on the job than it does for others. Factory workers, retail sales clerks, teachers, nurses and hospital orderlies, for example, may keep working and draw 100% of their pensions. Technicians, however, get only 50% of their pensions if they continue to work.
Soviet statistics show that there were 37 million people receiving retirement pay and another 16 million drawing disability pensions or state stipends to offset the loss of a family breadwinner.
The cost--25 billion rubles, or $29 billion--is paid out of state funds.
Soviet authorities have rejected suggestions by some Soviet scholars that they should tackle the labor force question by raising the normal retirement age to 65 for men and to 60 for women.
“These proposals do not receive support from central bodies,” L. A. Kostin, first deputy chairman of the State Committee for Labor, told a group of reporters.
The present retirement ages are “great achievements in social terms, and we don’t want to go backward,” Kostin said. He acknowledged that “a great many” people work after their normal retirement date, either to fight boredom or to increase their income.
“But it’s voluntary,” he said, “and those who want to relax may do so because they have earned that right.”