Soviets May Face Mass Layoffs : Fewer Workers Will Produce More, Economist Says

A top Soviet economist has warned that the Soviet Union will soon face mass layoffs affecting at least 10 million people because of rising labor productivity and new management methods geared to making profits.

Writing in the latest issue of Kommunist, the ideological journal of the Communist Party, the economist, Dr. Vladimir G. Kostakov, recommended a number of measures to deal with the problem, including cash benefits for workers between jobs.

Kostakov, deputy director of an economic institute in the State Planning Agency, challenged the official view that the Soviet Union has a labor shortage.

Inefficiency Charged

“I say that the national economy is oversaturated with manpower and uses it extremely inefficiently,” he wrote.

Two and three people are employed in factories and offices where one could do all the work, Kostakov said, and they do not work hard enough.

“A significant part of the redundant workers can be released from the national economy in the nearest future,” he said. “Even my conservative estimate shows that this surplus within reach, lying on the surface, amounts to at least 10 million people of 130 million employed.

“Up to now, full employment in this country was achieved automatically because our economy was expanding faster than the work force.”

Productivity Versus Growth

Social legislation, including a reduction in the workweek and time off for nursing mothers, has increased the demand for workers, Kostakov said, but new guidelines issued by Soviet leader Mikhail S. Gorbachev provide for labor productivity to increase faster than economic growth.

“If we fulfill the plans, industrial production will be squeezing out redundant workers,” Kostakov said. “Of course, we’ll have to provide for this contingency and see to it that full employment, as one of our social achievements, is preserved. Currently, neither in economic nor in social nor psychological aspects are we prepared for the radical changes.”

His article, intended mainly for party activists, said the projected increase in labor productivity means that the number of industrial workers would drop by 13% to 20% in the 15-year period ending in 1996. This means that from 13 million to 19 million people would lose their jobs in what Kostakov termed “an unprecedented phenomenon” for the Soviet economy.

These trends will be accelerated, he suggested, under new management rules that provide for factories to be self-financing by the end of this year. In other words, they will have to show a profit in order to stay in business.

‘Reemployment Difficulties’

“We are (already) experiencing difficulties with reemployment of the released work force,” Kostakov said, “and this applies the brakes to any significant increase in labor productivity.”

In capitalist countries, he said, furloughed workers join the ranks of the unemployed. In the Soviet Union, the custom has been to provide another job immediately in the same factory for a worker whose job has been eliminated.

When Soviet plants that cannot show a profit under the new regulations are shut down, he said, an “excruciating question” will arise about the fate of the workers. With a planned economy, he said, the Soviet Union could make advance provision for the workers, but even so they may be without work until they can be retrained and rehired.

“First we must inject manpower resources into services,” Kostakov recommended, with higher wages and new service facilities to soak up some of the jobless pool.

‘Special Fund’ Urged

“One of the key requirements is creation of a special fund . . . that would provide material assistance for the released work force for the period of its retraining and reemployment,” he said.