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Wage-setting Mechanisms in the Russian Industry

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  • R. Kapelyushnikov

Abstract

The paper examines a specific model of wage-setting evolved in Russia under transition. Using new survey data author reveals paradoxical characteristics of wage-setting mechanisms at Russian industrial enterprises: very high union and collective agreement coverage; nearly unilateral control of managers over wage determination; close correlation between earnings and enterprises' performance; voluntary utilization of wage standards established by the state. The special section explores effects of fulfilling a new provision stipulated for by the recently adopted Labor Code to raise minimum wage to the subsistence minimum level. The author concludes that wage-setting in the Russian labor market is at odds with a textbook competitive model and poorly fits into many other sophisticated theoretical schemes (such as labor-managed firms, bargaining models etc.).

Suggested Citation

  • R. Kapelyushnikov, 2004. "Wage-setting Mechanisms in the Russian Industry," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 4.
    • Handle: RePEc:nos:voprec:y:2004:id:1883
    DOI: 10.32609/0042-8736-2004-4-66-90
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