Special attention should be paid to the creation of youth employment, not only for those who had reached working age (sixteen), but also for the many fourteen- to fifteen-year-old teenagers who had left school earlier for a variety of reasons. There was often no work for them and labour legislation prohibited the employment of young people who had just finished their compulsory education, when only 60 per cent of school-leavers went on to higher education. The Central Statistical Office had calculated that on 1 July 1963 some 2 million teenagers between the ages of fourteen and seventeen were neither at school nor at work. A further study conducted by the same body on 1 October 1964 had turned up an even higher figure.
The deteriorating employment situation of recent years was ‘due in part to miscalculations by planning and economic agencies, and in part to errors in economic policy’, concluded the report, which was not loath to identify the culprits. These shortcomings had reduced the effectiveness of investment, in particular as a result of faulty regional distribution of assets. Recent years had witnessed a major redirection of investment eastwards, into mining and electricity generation (particularly with the construction of large hydro-electric stations). But this policy had not been backed up by incentives to labour to settle in the east. At the same time, regions with surplus labour had experienced reduced investment – another mistake.
Job creation depended on capital investment, but the returns on the latter were falling because enormous quantities of material were ‘frozen’: uninstalled equipment and abandoned construction sites represented huge sums. Finishing such projects and starting up the new enterprises would alone create work for 15 million people, 10 million of them in industry. This was double the number of jobs created during the whole of the last five-year plan. Poor use of investment also stemmed from the fact that much of it was directed towards regional and republican centres, and what were already important industrial towns where spare labour was in short supply. The result was expansion of the latter at the expense of the countryside and small or medium-sized towns. The excessive growth of large towns entailed huge investment in infrastructure and housing, even though some towns with a lot of housing were not always in a position to maximize use of the local labour force or even squandered it.
The obstacles to a rational distribution of labour and employment had been compounded by Khrushchev’s restriction of private family plots in the countryside, which had led to the loss of 3.5 million jobs in this sector (Central Statistical Office), as well as to serious food supply problems in towns and countryside alike. Estimates indicated that simply to maintain existing levels of consumption of meat and dairy products by kolkhozniks deprived of their private plots, kolkhozes would have to increase their production of milk and dairy products by two-thirds, of meat and lard by three-quarters, of eggs by 150 per cent, of potatoes by 50 per cent, and of vegetables, melons and gourds by two-thirds. These figures underlined just how important a source of food and income private plots were (approximately half of what people received from the kolkhoz). The restriction of family plots by administrative measures, especially in small and medium-sized towns where they were very common, was exacerbating the labour supply problem. People deprived of the income they had derived from them needed work to replace it, but jobs were not easy to come by in towns. (Khrushchev’s reckless decision accounts for much of the popular discontent and instances of riot deplored by the KGB, which was ill-equipped to contain them.)
The unplanned, excessive influx of rural inhabitants into towns further complicated the state of the job market. Between 1959 and 1963, about 6 million rural inhabitants had arrived in towns. Most of them were young – under the age of twenty-nine. In itself this was a positive development, but not when it occurred in conditions of slow growth in output and labour productivity in the countryside. Most of these people from the countryside hailed from regions not where there was a labour surplus, but where it was in short supply and food production inadequate.
Another aberration: the spontaneous migration from countryside to town necessitated enlisting town dwellers to work in the fields, especially at harvest time. In some areas, this agricultural labour took the form of a ‘sponsorship’ of the rural zone in question; the phenomenon was becoming commonplace. The ‘sponsors’ (mostly factories) took on a significant share of the agricultural work in the farming units they were sponsoring – cultivation, harvesting, and so on. They supplied the state with its share of the crops and undertook the requisite construction and repair work. Industrial plants were therefore obliged to maintain a reserve labour force for this seasonal work. In some regions, the organization of such work was not increasing agricultural output, because the managers of kolkhozy and sovkhozy had grown dependent on outside help. At the same time, such collaboration was having a negative impact on industrial plants by hampering productivity improvements in them. In the final analysis, the consequences were negative all round.
The formation of labour reserves in urban enterprises for the purposes of agricultural work was promoting an abnormal process of labour exchange. Many kolkhozniks, accustomed to work in the fields, preferred to find a job in the factories of neighbouring towns. The reason was simple: the wages they could earn in industrial enterprises in the same region were 2.5–3 times higher than those paid by the kolkhozy.
One possible solution proposed by the Gosplan research institute is especially worthy of note. The central Asian republics, Kazakhstan and Georgia had high rates of population growth and possessed huge labour resources, but no economic assets – apart from agriculture, family plots and minor occupations. Moreover, their predominantly Muslim populations were reluctant to emigrate. This was where investment was required – not in more developed regions with low population growth and labour shortages.
Here a question suggests itself: What about the labour required to exploit resource-rich Siberia? The researchers probably assumed that their strategy of redirecting investment to central Asia and the Caucasus would generate enough economic growth to allow the state to offer the necessary wages to attract workers to Siberia.
One can image the debates that such a proposal must have sparked off. Just overcoming the opposition in Islamic areas to women working for a wage outside the home was far from straightforward. Language problems and professional training were additional major headaches. On the other hand, prioritizing the development of non-Russian regions, and postponing Siberia’s exploitation until better times, would provoke strong reactions among Russian nationalists, defenders of the central state, and other analogous currents that would be difficult to counter. Nevertheless, unperturbed, the author of the report pursued his survey of all the regions, in each instance proposing specific solutions that formed part of a comprehensive policy – as if saying to the Soviet leadership: ‘If you really want to plan, this is what you have got to do.’
Readers will by now have an idea of just how complex the labour issue was, as well as of the social and economic ramifications of the accumulating distortions. The whole venture demanded a set of coordinated measures, including material incentives, which were supposed to be the very essence of planning. Yet the Gosplan institute bluntly reported that ‘the problem is not so much a lack of information, as the fact that the employment factor is still not genuinely integrated into the formation of the national economic plan’. In other words, Gosplan did not know how to plan employment, its distribution and stabilization; and therefore did not plan it. It remained stuck in an age when manpower supplies were plentiful and it sufficed to fix investment and output targets for the labour to follow – or be forced to follow. That period corresponded to a stage of economic development and was not a matter of chance. But times were changing and the complexity of the task was increasing.