The Russian Defence Industry Confronts the Market: Findings of a Longitudinal Study

Since the start of market reforms, enterprises of the Russian military–industrial complex have lived through a massive crisis and a spectacular revival. Using original data from a longitudinal survey covering the period of 1995–2006, this article analyses the impact of transformation in the defence industry on labour and labour–management relations. We find that by the mid-2000s defence enterprises were largely able to stop job losses, eliminate wage arrears and restore wages to the level prevailing in the civilian economy. The study confirms that compared to other sectors of the Russian economy, defence enterprises continue to carry a strong legacy of the Soviet system. The dominant role of state ownership and government orders, along with the relative geographical isolation of defence enterprises and obvious factors of secrecy and security, made labour at these enterprises less willing to challenge management or owners by strikes and open protests. On the other hand, workers of defence enterprises can count on a more paternalistic attitude from managers and relatively more generous welfare benefits.