Effects of Minimum Wages on the Russian Wage Distribution
In the transition to a market economy, the Russian workforce underwent a wrenching period of change, with excess supply of some industrial skills coexisting with reports of skills shortages by many enterprises. This paper uses data from the Russia Competitiveness and Investment Climate Survey and related local research to gain insights into the changing supply and demand for skills over time, and the potential reasons for reported staffing problems and skills shortages, including labor turnover, compensation policies and the inhibiting effects of labor regulations. It discusses inservice training as an enterprise strategy for meeting staffing and skills needs, and presents evidence on the distribution, intensity and determinants of in-service training in Russia. It investigates the productivity and wage outcomes of in-service training, and the supportive role of training in firms’ research and development (R&D) and innovative activities. A final section concludes with some policy implications of the findings.
Up to now, the Russian banking market has not been opened up completely for foreign banks. This refers mainly to the still existing restriction to set up branches in the Russian Federation that will even remain in force after the accession to the WTO. There is a fear by many incumbent Russian banks of being crowded out by foreign banks entering the market with low-interest offers for business and consumer loans. Studies of foreign bank entry in other transitions countries have shown that this fear is reasonable. However, from an economic point of view the entry of foreign banks has increased the overall efficiency of the banking markets in those regions and led to a healthy concentration process. Both effects could also take place on the Russian banking market that is characterised by a comparably low borrowing to the private sector and a very high number of small banks.
This article addresses these questions by reviewing the potential effects of fo-reign bank entry in banking markets of transition countries. This is followed by an analysis of the current situation on the Russian banking market which has some peculiarities in comparison to the banking markets of e.g. former socialist countries in Central and Eastern Europe (CEE). This is mainly due to the size of the country and the existence of large state owned banks which are dominating the market.
The present book is the result of the project International Comparative Study on Education, Career and Migrant Strategies of School Students from Rural Areas in Transition Countries initiated by UNESCO International Research and Training Centre for Rural Education (INRULED) and the Center for Applied Economic Research, National Research University Higher School of Economic (HSE) of Russia in 2010.
The book is based primarily on contributions made to the Asian-European Labour Forum (AELF) set up by the Friedrich-Ebert-Stiftung (FES) in 2009. The Forum convenes some 30 researchers from various Asian and European labour research institutes, labour training institutes and think tanks related to trade unions. The research questions initiated at the first Forum meeting concerned the search for policies to reduce inequality and provide equitable living and working conditions within a common need for sustainable economic and social growth. To that end, the activity of the AELF focused on elaborating national experience with minimum wage setting and trends in income inequality. In addition, the potential of trade unions and the scope of collective bargaining at national level were assessed and evaluated as were the economic policy stances of the respective governments.
AELF meetings took place in Düsseldorf (2009), Ha Long – Vietnam (2010), Oslo (2011), Seoul (2012) and Amsterdam (2013), co-organised with the FES and hosted by respectively the WSI within the Hans-Böckler-Stiftung; the Institute for Workers and Trade Unions (VGCL); the FAFO Institute for Labour and Social Research; the Research Centers of the Korean trade union confederations, FKTU and KCTU; and the Amsterdam Institute for Advanced labour Studies (AIAS) - University of Amsterdam. At the Amsterdam 2013 meeting it was agreed that the written contributions to the Forum should be edited and, together with comparative chapters on Asia and Europe, should be offered for publication and a wider audience. In keeping with the discussions at Forum meetings, the book offers a critical perspective on wage-setting institutions, collective bargaining and economic development. It focusses in particular, on the role and effectiveness of (statutory) minimum wages in the context of national trends in inequality, economic development, and social security systems. The book contains 16 country chapters comprising: eight Asian countries, namely: China, Vietnam, (South) Korea, Japan, Pakistan, India, Indonesia and Thailand, and eight European countries or country groupings, namely: France, Italy, Germany, the Netherlands, the Nordic countries, Central and Eastern Europe, the United Kingdom, and the Russian Federation. These country chapters, all written by AELF participants except for an additional contribution on China, reflect their contributions at the various meetings of the Forum but all have been updated to include the latest data available.
Chapters 1 and 10, on Asia and Europe, compare and contrast national experiences in order to highlight the overall lessons that can be drawn in a number of crucial policy areas. To this end, the authors have gone beyond a simple assessment of the impact minimum wages may have made on the prevalence of low pay at country level. Discussion and inputs to various meetings of the Forum also focused on minimum wage setting and inequality trends as well as on the relevance of a redistributive wages policy for worldwide as well as national economic recovery. This enabled the authors to explore demand- or wage-led economic recovery as an alternative to the export-led strategies currently pursued by countries such as China, Japan and Korea in Asia and notably Germany and the Netherlands in Europe. To provide important context they have also drawn upon the trends in trade union activity and collective bargaining coverage that are presented in the individual country chapters.
In light of the slow pace of recovery from the recession induced by the financial crash of 2008-09 that has characterized much of the European Union it is timely to reconsider macroeconomic policy options. The fact that fears of deflation have latterly surfaced in Europe and that the previous soaring growth rates of China and India amongst others, have also significantly weakened whilst Japan has gone into recession, all suggest that the dominant macroeconomic growth policies, whether export led or debt fuelled, are failing to support a sustainable economic recovery. At the same time, as shown in the comparative and country chapters, short-term ‘austerity’ policies have, if anything, added to rising inequality and contributed a further twist to the downward spiral of falling consumer demand. Against this context, the need for a redistribution and rebalancing of income and wage share becomes compelling not just in Europe but also in the fast growing economies elsewhere.
As with any international comparative study, it is important to acknowledge differences in levels of economic and social development, institutions of governance, culture and history. That said, the subject matter of the book, namely the enduring problems of low pay, rising inequality and inadequate economic and social policy responses, do seem to be common across all of the countries represented. Similarly, the weakening of trade union influence and the declining coverage of collective bargaining are characteristic of the last couple of decades in virtually all the countries surveyed. It is hard to avoid the conclusion that irrespective of country, the ‘workers’ voice’ has been systematically choked off and the scope for collective action increasingly constrained in the pursuit of neo-liberal economic policy. As the book shows, the results of this confluence are neither supportable from a social point of view- the failure to arrest rising inequality, nor, from an economic view point -- the very slow recovery from the 2008-09 crisis and current fears of deflation being ample testimony here.
It follows that whilst the authors acknowledge the relevance of policies limiting the surge in top incomes such as those recently emphasized by Thomas Piketty and others, the emphasis in the book is on the equally urgent need for more comprehensive demand-led macroeconomic policies. Specifically from a labour perspective, to overcome the economic crisis and reduce inequality in both Asia and Europe, such policies should be grounded on free collective bargaining and, if feasible, well-designed minimum wage-setting systems, and supported by the expansion and strengthening of social protection.
A sustainability perspective is a practical today's goal for collaboration of state, business and society. The special role within this triad belongs to business companies, which integrate the sustainability principles into their strategies to improve organizational processes and long-term growth. Quality management system (QMS) is an important tool to ensure sustainability through business performance. According to the International standard organization survey of QMS, more than 1 million certifications issued in 178 countries by 2010. The position according to which corporate management of sustainability by the help of QMS, which corresponds to international standard ISO 9000 is presented in the paper. The aim of the paper is to examine the factors, which affect organizational decision of the companies in the emerging countries to implement QMS ISO 9000. The impact of internal and external factors which influence managerial decision of QMS implementation is analyzed in the paper. Specifically, the similarities and differences between the motivations of companies from the Commonwealth of Independent States (CIS), new members of the EU countries and countries of the Southern Europe (which aren’t the members of the EU) within the implementation of the QMS ISO 9000, are discussed. The empirical cross-country analysis is based on 2002–2009 data from the Business Environment and Enterprise Performance Survey (BEEPS), conducted by the World Bank and the European Bank for Reconstruction and Development (EBRD). Binary logistic regression was used to analyze the data. The study identifies the role of economic development and institutional environment in the QMS ISO 9000 implementation. There are highlighted three “portraits” of companies, which implemented QMS: (a) from the Commonwealth of Independent States (CIS) countries; (b) from the new EU members countries; (c) from the Southern Europe countries, which aren’t the members of the EU. The results show that QMS ISO 9000 implementation leads to increase of competitive ability and investment attractiveness of the company, to improvement of product quality and stakeholders communications, to human resources development. These business processes improvements, as a QMS implementation result, can potentially activate the company’s sustainable effects and then - national and global sustainability transformations.
Drawing on a unique dataset of 9685 Internet freelancers, we shed light on the entrepreneurial potential of the Russian-language online labour market, where more than half of freelancers exhibit entrepreneurial orientations. Our findings reveal heterogeneity of Internet freelancers in relation to entrepreneurship documenting strong differences amongst groups of actual entrepreneurs, potential entrepreneurs and non-entrepreneurs in terms of socio-demographics, professional characteristics, work behaviour and wellbeing. The fact that by most indicators potential entrepreneurs who plan to start a business typically take an intermediate position between non-entrepreneurs and actual entrepreneurs signals the feasibility of entrepreneurial intentions. Researching the entrepreneurial potential of Internet freelancers contributes to better understanding of how solo self-employment may give rise to new businesses in knowledge-intensive and creative industries which are crucial for modernising transition economies.
The historical changes in Central and Eastern Europe demanded suitable paths for the transition from centrally planned to market based economies. The lack of relevant experience added to the challenge, giving rise to the incalculable risks of implementing untested policies. By focusing on monetary policy, trade, and convergence, this volume addresses some of the most urgent economic policy issues in the transition economies of Central and Eastern Europe and beyond.
The chapter offers critical perspective on wage-setting institutions, collective bargaining and economic development. It focusses in particular, on the role and effectiveness of (statutory) minimum wages in the context of national trends in inequality, economic development, and social security systems.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.