Where Workers Have to Fight for a Paycheck
U.S. and Russian Unions Move Beyond the Cold War
by David Bacon
MOSCOW (2/16/98) -- Today 20 million Russian workers, one out of every four, don't get a check on payday. Their wages aren't just late by a day or two. People often go months without getting paid.
Giant industrial enterprises make partial payment in car parts, soap or even sex aids. Workers do informal jobs, depend on other family members, and grow vegetables in tiny plots where, ironically, they used to take summer vacations outside the cities.
The wage debt, estimated at $10 billion, is growing by 5% every month.
Timor Timofeyev, director of Moscow's Institute for Comparative Research into Industrial Relations (ISITO) calls it a sign of "barbaric capitalism."
For Vic Thorpe, general secretary of the International Federation of Chemical, Energy, Mine and General Workers' Unions non-payment is a "basic violation of a central principle of civilized relations in the production process ... a clear and logical result of pursuing policies advanced by the evangelists of liberalization and the free market." The ICEM has been world labor's leading voice raising support for Russian workers.
Non-payment is testing the ability of unions to transform themselves to fight the worst aspects of the country's economic freefall. The crisis is putting international labor solidarity to the test as well, measuring the distance traveled by the AFL-CIO in particular, away from its old cold-war hostility towards Russia's labor movement.
Few workers in the U.S. or Canada would understand why Russian workers continue showing up for work with no paycheck in sight for months on end. The brutal truth is that there's nowhere else to go. There are no alternatives.
In Moscow's huge Moskvitch auto plant, where a decade ago 25,000 workers cranked out 200,000 cars a year, a few hundred autoworkers assembled only 2000 in 1997. They got paid in parts, which they then sold at cut rates to a cooperative operating inside the factory.
At the Progress aircraft plant in Arsenyev, work stopped completely last November. The factory makes the Ka-50 Black Shark battlefield helicopter for export, and the C-Mosquito ship borne missile system. Its last payday was over a year ago. The workers, some of Russia's most skilled and productive, got a bread ration twice a week instead. They suspect the last manager improperly appropriated 2 billion rubles ($400,0000).
In Ivanovo, once the bustling heart of the textile industry and a city that produced some of Russia's first industrial workers and earliest revolutionary fighters, the mills are mostly silent, the people hungry. When they work at all, they're paid in bed sheets.
One Russian worker out of every eight last year was paid in kind, and 40% of those recently surveyed by the ISITO said they hadn't received their salaries for the last month. Coal miners have been owed over 160 billion rubles ($27.5 million) in wages since August. Aircraft workers haven't been paid for nineteen months.
Confounding liberal reformers who predicted that market forces would unleash consumer demand and greater productivity, industrial production has dropped much further than in the U.S.'s Great Depression. Last year Russia's coal mines produced only 244 million tons, a little over half that produced in the final years of the Soviet Union.
The government collects taxes relentlessly, depriving enterprises of capital to function or pay salaries. It doesn't pay its own employees. When it stiffs its suppliers for purchases ranging from coal to airplanes, they stop paying wages. Meanwhile, revenue is siphoned off in massive corrupt privatization schemes, and the new owners of privatized enterprises then refuse to pay workers too. (see sidebar)
Russian unions find non-payment extremely difficult to resolve because the problem is so extensive and so integrally a part of the new economic order. But some of labor's difficulties are also internal - unions today are in transition themselves.
Under the old Soviet system, Russian trade unions encompassed 95% of the workforce, but functioned in a way that left them totally unprepared for present circumstances. While Lenin envisioned them early on as transmission belts carrying revolutionary ideas to workers, in practice unions played almost no ideological role at all. They functioned instead as distributors of part of the social wage.
Soviet industrial enterprises ran schools, maintained hospitals and child care centers, erected apartment houses, and even administered vacation resorts hundreds of miles away from the plants themselves. A factory was, in effect, the nucleus of an entire town or city.
Soviet trade unions administered this extensive network of social benefits. They were very close to enterprise managers, only rarely acknowledging contradictions between them and workers. David Mandel, in his "Rabotyagi" interviews documenting the experience of rank-and-file Soviet workers, describes the unions as "completely subordinated to the political and economic administrative apparatus."
When perestroika made the creation of independent organizations possible, coal miners were the first workers to form them in the heat of spontaneous, quick-spreading strikes. Their anger was fueled by the abysmal conditions of miners in isolated coal towns, and their independent union, Russia's first, quickly became political. It saw the destruction of the old state apparatus, particularly the power of the Communist Party, as its main objective. Miners' strikes became shock waves helping to topple Gorbachev, bringing Boris Yeltsin to power, and ending the Soviet Union.
The leaders of the independent miners' union believed that privatization, breaking the mines loose from government control, would make miners rich from the sale of Russian coal on the free, and especially foreign, market. They became stalwart supporters of the first economic reforms, backing even the most hard-line advocates of economic "shock therapy" in successive Yeltsin governments.
Other workers saw the miners' union as a model, especially in industries where they believed reforms might give them access to foreign exchange, including airlines, longshore and transport.
In 1991 the old Soviet trade union federation was dissolved, and a new one created by its affiliated unions, the Federation of Independent Trade Unions of Russia (FNPR). It called itself independent to underline its autonomy from the Communist Party, which Yeltsin temporarily outlawed later that year. The FNPR was the only mass national organization, apart from the military, to survive the transition from socialism.
On the whole, it survived intact, inheriting the property and membership of the old Soviet unions, as well as their close relationship with worksite managers. By the early 1990s, Russia had produced two labor movements, one allied with managers against the government, the other seeing managers as the enemy, defending the government and its reforms.
The independent unions eventually accounted for about 2,350,000 workers. The FNPR has about 45 million members, organized in 43 industrial federations and 380,000 locals.
In the FNPR's first major battle against the reforms, over 2.5 million medical workers shut down Russia's healthcare industry for three weeks in 1992. Workers had grown desperate when the government appropriated only 40% of the money required to finance the system. Doctors and nurses told of operating on patients with razorblades, without anesthetic, because cuts in state subsidies had stopped production of medical supplies.
The strike, led by the 4.5-million-member Russian Union of Medical Workers, sought to "ensure that health care protection of the population would have a budget that would rise with the cost of living," according to its president, Mikhail Kuzmenko.
Both administrators and workers, belonging to the same union, took part. The strike ended with a quick cash fix and more government promises of money to pay wages and maintain the system, a solution which has since become the hallmark of government efforts to end many similar strikes.
Yeltsin sought to coopt rising labor discontent by creating a Tripartite Commission for the Regulation of Social and Labor Relations, giving the FNPR 9 of its 14 labor seats. In the meantime, Victor Utkin and Alexander Sergeyev, leaders of the independent coal miners union, became members of Yeltsin's council of advisors.
The FNPR advocated public policies to slow the progress of economic shock therapy and soften its impact, including continuing subsidies to maintain production at state enterprises, and allowing workers to become majority shareholders in privatized businesses. It tried to force the government to index income with rising inflation, especially the minimum wage and pensions.
But the federation didn't attempt to bring workers into the streets to stop the process altogether. Perhaps it feared that workers would not respond to its call. But it also feared the consequences of all-out opposition. In 1993, the FNPR took the side of Russian parliamentary deputies in their confrontation with Yeltsin, who ended the crisis by shelling the parliament building with tanks. He later punished the federation with presidential decrees eliminating dues checkoff, and transferring control of social benefit funds to the state.
But five years of economic reforms have failed to increase either production or standards of living. Instead, social benefits like childcare or subsidized rent have disappeared, while unemployment is a growing specter. Consumer goods and healthcare are available, but only for those who can afford them, while millions of workers don't even get paychecks.
Independent unions, as a result, have a harder time defending the reforms which create these problems. The FNPR, on the other hand, also has to have an answer for workers whose bosses won't pay them beyond simply condemning government policies. Both large-scale economic forces and pressure from impatient workers below are pushing the two union groupings towards each other.
"The deep crisis in Russia is causing a crisis in our labor movement," Timofeyev says, "in its identity, its strategy and its international relationships. We're coming close to a time for new leadership on both sides."
The tempo of protest is rising. In the first six months of 1997, according to the State Statistics Committee, strikes involved 3% of the entire Russian workhorse, five times the participation in 1996. In the month of July alone, workers at the Zvezda Submarine Yard in Nakhodka on the Pacific went on strike over 8 months of wage arrears. Nuclear power workers in Smolensk marched 350 kilometers to Moscow, on their time off from work, to protest four months of unpaid wages. Eight coworkers organized a hunger strike in the power station's recreation hall.
When the schoolyear opened in September, over 1100 schools were on strike. Air traffic controllers shut fifty airports the same month, winning their unpaid wages in just hours, while defeating demands for vacation cuts at the same time. More nuclear workers, forbidden by law from striking, organized demonstrations while thousands of defense employees picketed government offices. Yeltsin owes defense enterprises $3.2 billion, of which $1 billion constitutes unpaid wages.
This fall, miners in the country's westernmost Maritime region, around Vladivostok, stopped all coal deliveries to the area's power stations. The miners' action touched off strikes in the stations themselves, and power to the whole province shut down. Again the federal government came up with cash to partially pay wage debts going back months.
But then in January, 1500 coal miners blocked the Trans-Siberian Railway in Partizansk, waving red flags and banners. Another 1000 workers from the Zvezda and Progress factories blocked it in Vladivostok.
At the end of the month, miners at the Kuznetstkaya mine in the Siberian region of Kemerovo took over their mine, and for four days held its hated director, Alexander Ternovykh, captive. In 1991, the productive mine was the first privatized in Russia, sold to an Austrian company, Prosystem Gmbh. But output plunged, paychecks stopped, and finally three workers were blown up last year after Ternovykh sent them into a tunnel filled with methane. A court ruled the privatization illegal, and local authorities, including Kemerovo's new Communist governor Aman Tuleyev, moved to have it renationalized.
Vladimir Chubai, head of the FNPR in the far east, declared that "we should change the criminal code to punish bosses who don't pay their workers." FNPR secretary Andrei Isayev announced this winter that the federation will go beyond directing its fire at the government to hold enterprise management responsible for non-payment as well. Isayev is a rising figure in the FNPR, more militant and less interested in alliances with political parties than its other leaders.
Protests have grown in strength because they've begun to overcome some of the crippling divisions between the FNPR and independent unions. When miners shut down production last year in the main coal centers of Kuzbass and Vorkuta, both the old and new unions cooperated. In March, the FNPR and almost all the independents mounted a countrywide day of protest over non-payment, involving 27 million workers in 16,000 enterprises.
According to Timofeyev, "relations between the independent unions and the FNPR are much closer every day."
For the first time, instead of deepening the divisions between Russian unions, the AFL-CIO is helping overcome them. The March strike was greeted with solidarity statements by both John Sweeney, president of the AFL-CIO, and Bill Jordan, head of the International Confederation of Free Trade Unions.
"The reality is that the world has changed," says Barbara Shailor, director of the AFL-CIO' Department of International Affairs. "The cold war has ended, and we're faced now with aggressive neoliberal politics and globalization. We're making alliances with confederations trying to deal effectively with these problems for their own workers. It's absolutely essential that we work with all organizations that are addressing these basic issues. We're working with everybody."
This wasn't always the case.
In fact, from the beginning of the cold war, the AFL-CIO pursued a policy of total hostility toward Soviet trade unions, accusing them of being dominated by the Communist Party. The Department of International Affairs fought the influence of radical, socialist and communist unions around the globe, activities funded at first through the U.S. government intelligence budget, and later by the U.S. Agency for International Development (USAID), and the National Endowment for Democracy (NED).
The State Department and the DIA cooperated to prevent visits by trade unionists from the Soviet Union or other socialist countries. AFL-CIO Presidents George Meany and Lane Kirkland attacked U.S. union leaders, like Machinists President William Winpisinger, who favored friendly relations.
In 1989, however, Kirkland saw in the coal miners' strikes the seeds of a movement he believed might play the same political role in the Soviet Union that Solidarnosc did in Poland. He immediately funneled money and resources to the fledgling independent union. Coal strike leaders were invited to the U.S., and given financial support.
In April, 1992 the Free Trade Union Institute established an office in Moscow, and organized the Russian American Foundation for Trade Union Research and Education. RAFTURE sought to encourage the formation of a new labor center to replace the FNPR, and trained organizers for raids. It was a creature of U.S. foreign policy, guiding resources to those unions which supported Yeltsin and economic reforms.
FTUI paid the salaries of administrative staff in certain independent unions, and started a newspaper, Delo, with $250,000 from the National Endowment for Democracy. Delo campaigned for Yeltsin and for business/labor/government partnership, urging workers not to demonstrate against non-payment of wages.
FTUI funded a database of union activists and "different anti-democratic union groups," paid for television programs and a labor education program, and set up a public relations operation and an advisory council of trade union leaders. While the AFL-CIO has yet to set up its first radio station in the U.S., it had $660,000 to run four of them in Russia in 1994.
Individual U.S. unions also ran U.S. government-funded programs. The American Federation of Teachers received grants to design "democratic curricula," washing Marxism from the hair of Russian schoolchildren. The AFT also blocked the FNPR-affiliated teachers union from joining Education International, the worldwide educators' federation.
Today, most FTUI programs no longer exist. Ironically, Senator Jesse Helms slashed the foreign aid budget funding Kirkland's intelligence-related activity. But it was the election of John Sweeney as AFL-CIO president in 1995 which brought significant changes in the direction of the federation's international activity. Secretary-Treasurer Richard Trumka describes the new program as "international involvement focused towards building solidarity abroad, helping workers achieve their goals here at home."
Irene Stevenson took charge of the FTUI office in Moscow, and today maintains a much more impartial attitude between rival Russian unions than her predecessors. The office provides assistance to an international campaign against non-payment, which includes the FNPR and the independent unions. At the end of November, the International Confederation of Free Trade Unions (set up in the 1950s to fight Communists in world labor) and the International Labor Organization sponsored a Moscow conference on non-payment, bringing all the Russian unions together.
Stevenson focuses on legal actions. "The problem," she says, "is not the law as such. It is the lack of penalties for those who ignore it. An entire host of American firms ... disregard both laws on wage payments and dismissals. Unfortunately, most of them win the gamble."
In January, however, the legal road was further blocked when the Russian Constitutional Court overturned the law giving workers first claim on a company's assets, treating wages as a human right. The court upheld the government's position that paying taxes comes first. As a result, actions like those of unions in Samara, which had collected nearly $20 million in unpaid wages through 2000 civil suits, will no longer be possible.
"I personally would term the 'new' policy an attempt to give the FNPR the benefit of the doubt," Stevenson says. The FNPR is no longer excluded from FTUI's education and training programs. And this fall in Pittsburgh, Shmakov and FNPR International Department head Evgeni Sidorov, along with independent union leader Alexander Sergeyev, were the first guests ever from the Russian labor movement at an AFL-CIO convention.
In 1994, the World Bank promised a $500 million dollar loan to Russia to finance the privatization and restructuring of the coal industry. Yeltsin is rumored to have used these loan funds to finance massive spending on his 1996 reelection. "He spent 30-40 trillion rubles, an enormous expense which helped escalate the non-payment of wages crisis just after the election," Timofeyev says.
As part of the World Bank package, FTUI sparked the creation of Partners In Economic Reform (PIER). This program brought together the U.S. coal industry, the United Mine Workers of America, the U.S. government Mine Safety Administration, the Russian coal ministry, and the independent Russian miners' union. Kirkland and then-UMWA President Rich Trumka sat on its board, along with retired Peabody Coal President Robert Quenon.
PIER's major purpose, funded by USAID, was to organize an infrastructure to soften the blows of the massive unemployment expected in the closure of half Russia's coal pits. While PIER became dormant in the wake of foreign aid cuts, mine restructuring will still take place, costing the jobs of hundreds of thousands of miners, a bitter payment for their past loyalty to Yeltsin.
PIER is not just an abandoned project, however. It is typical of the selective vision which deals only with the effects of reform, while in effect supporting the reforms themselves.
Linda Cook, of Brown University's Watson Institute for International Studies, states that "the United States has a strong interest in supporting Russian unions because they can contribute not only to democratic stabilization but also to the success of economic reform," in a revealing report entitled "Labor and Liberalization" written for the Twentieth Century Fund. "Building more effective bargaining institutions for the labor force...may make the distress caused by those reforms more palatable."
For Russian miners, however, the reforms themselves are the problem, and even more, their purpose - reestablishing a capitalism barbaric in its treatment of workers, beholden to foreign loans and investment. It's not just a Russian problem. The project of dismantling socialism has an enormous impact on workers in every part of the globe.
"Just as the Holy Alliance in Europe after the Napoleonic Wars tried to root out the results of the French Revolution," cautions Russian socialist Boris Kagarlitsky, "so today the International Monetary Fund, Maastricht Europe and the American 'new world order' represent the reactionary answer of the old elites to the downfall of the revolutionary experiment."
No one - not the AFL-CIO, the independents nor the FNPR - wants to ask the obvious question: are Russian workers better or worse off now than they were ten years ago? U.S. and Russian unions, although coming from opposite ideological traditions, find themselves in quite a similar political predicament.
How can a union support the policies which produce payment in bed sheets, and then protest the bed sheets themselves? Only by refusing to connect present conditions with their origin.
The AFL-CIO's approach to this problem speaks clearly about the limitations of its vision for a radically different society, whether in Russia or here at home. "If economic restructuring brings an increase in living standards to the majority of citizens, and if markets are mechanisms which distribute wealth, then we support them," Shailor says. "But economic restructuring should not take place on the backs of workers, and clearly in many cases it does."
The AFL-CIO will no longer deny aid to unions which don't want to pay the price of reform, regardless of their history or politics, a vast improvement over previous policy. "We will stand with any union," Shailor says, "which opposes [restructuring], and we're giving solidarity and support where there is resistance."
But AFL-CIO international activity is still funded by USAID and the NED, although at less than the $40 million/year of the early 1990s. The non-payment situation is growing extreme enough that future U.S. policy may even favor softening the reforms' impact, so long as the goal remains unchanged. To the extent that Russian unions accept that goal, and limit their fight to the impact, USAID support for current AFL-CIO activity in Russia may not be in immediate danger.
Support would surely be withdrawn, however, if the AFL-CIO continued a policy of solidarity with a Russian labor movement pushed in a more radical direction by economic crisis and rising militancy at the bottom. Russian unions advocating even traditionally nationalist policies of import substitution and limits on foreign investment would undoubtedly be viewed as enemies. If U.S. aid policy and that of the AFL-CIO become contradictory, "then we'll figure out a way to do the work, with our without government funding," Shailor promises.
A day of decision is approaching, not only for unions in Russia, but for the AFL-CIO in relation to U.S. foreign policy. Speaking last February at the Davos forum of international bankers in Switzerland, Sweeney warned that "the neoliberal version of the American model now held out for export offers no answer to the fundamental economic challenges of our day." Yet this is exactly the economic model the U.S. has exported to Russia, and not just there.
Already unionists like ICEM's Vic Thorpe are calling for a more fundamental reassessment. "We need urgently to revisit the ideas behind the Bretton Woods institutions and seriously to question whether they are still appropriate," he told the November conference on non-payment. "Their policies have destroyed attempts to base growth on more secure and socially-just systems of import substitution and self-sustaining development in favor of dependence on multinational banks and corporations and a limited social elite. It is time to acknowledge that the institutions have not worked ... that they were a bad idea, founded on an inappropriate model of growth."
These are important voices, pointing out that the road of independence from U.S. foreign policy, both corporate and government, has its necessary and logical conclusion in opposition to free market reforms and the uninhibited growth of capitalism.
But even they leaves a deeper question unasked. If Russian workers decide to look for an alternative, or for that matter, if workers in any other country do so, what can they hope for today from the AFL-CIO's new commitment to international solidarity?
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