The Soviet Union had planned labor market and economy. However, contrary to popular file system in which workers are obliged to stay in jobs that are assigned to the Soviet labor market was characterized by a significant degree of labor mobility. In practice, workers are reasonably free to change jobs, and employers were justified freely compete for your work.
There is evidence that the vast majority of leases are contracted directly between the individual and the prospective employer, reviews data for medium and large businesses from a wide range of resources and believes that the turnover rate from the 1960s onwards was about 20% annually. This rate is comparable to that in Western European countries and higher than those in countries like Italy and Japan. Therefore, although there were some restrictions on labor mobility, through the residential and administrative constraints, by and large the workers could not move and are guaranteed employment and job security.
Image inflexible labor market stems from the Stalinist period (1930), when the workers were forbidden to quit their jobs. Jackman and Rutkowski (1994) describe the Stalinist labor market in five distinctive characteristics. First, workers not only a right but an obligation to work and staying out of the workforce was considered 'parasitism'. Second, the state has the right to assign graduates to a specific place for several years, often in remote areas (although the violation was relatively high). Third, some degree of forced labor did not exist, and concentration camps were used mainly for construction, mining and forestry.
Fourth, the government used mass mobilization campaign, especially youth, to perform specific tasks such as construction or agricultural projects. Finally, the government has strictly controlled labor migration, especially in urban areas through a system of internal passport or permanent residence - a notorious 'propiska' system, which has only recently been abolished in many of the former republics (Jackman and Rutkowski, 1994, p.122-123) .
By the mid-1950s, most of these restrictions are lifted and until the 1970s and 1980s, the Soviet labor market functioned more like a market economy rather than centrally planned. The workers are mostly allowed to choose their job skills or professions, as well as regions in which they worked, and they are free to resign (Jackman and Rutkowski, 1994, p. 123 ).
However, the policy pays not remain fixed by the central government. system of pay differences exist such that jobs are graded according to levels of production, satellite radio, the regional coefficients and other factors, rather than human capital and productivity (Jackman and Rutkowski, 1994, p. 127). As a result, contrary to Western industrialized countries, high income were associated with manual workers, and not with greater human capital. Because the Soviet emphasis on industrial production, wages in construction and manufacturing are particularly high, while below average in agriculture, and even lower in the service sector, which consisted mainly of education, health and culture (Yemtsov, 2001, P.8) . In addition, taxes on income policy, which has imposed pay tax on incomes above certain levels, continue to put a ceiling on earnings. As a result, companies competed for labor and benefits such as welfare, subsidized kindergartens, housing, the right to purchase cars or consumer durables.
the Soviet system was characterized by significant excess WORK at the micro level, a growing deficit at the macro level. Georgia, for example, was classified as a region of "surplus labor", where the working age population, increasing number of official positions. Thus, although unemployment did not officially exist, Marnie is estimated that in 1989, 10% of working-age adults in Georgia are not get official jobs (Marnie, 1992). Also, the surplus labor at the enterprise level is very common. Since there were no incentives for using labor efficiently, the company would hoard considerable reserves of the workforce to meet changing demand, resulting from what are often inadequate investment strategies (Clarke, 1999, p.4 ).
At the same time, shortage of labor at the macro level is a major concern of policy during the Soviet period. Since the early 1930s to the 1950s, the one of the key priorities of the Government to transfer a large number of rural population in the manufacturing centers and mining industries, as part of a national plan for industrial development. During the 1970s and 1980s, it became necessary to draw on non-urban population (especially women with children and pensioners) to meet production goals.
Although the result of labor hoarding is low labor productivity (studies suggest that the mid-1980s, labor productivity was the third of the middle-income OECD countries), it was not a major concern, as the ultimate goal of the company was not that of profit maximization. Soviet enterprises are expected to meet production targets, but most of all were the 'social' enterprises, which were the main locus of social integration within the Soviet system. As described by Clarke (1999), policy labor market is based on the ideal job for life and work place is almost 'second home'.
Enterprises are the main providers of social protection. Social benefits, such as housing, garden plots, kindergartens, subsidized meals, vouchers for the purchase of durable goods, family allowances, and resorts, all are guaranteed through employment, and are provided through the company for all employees and their family members, whether working or not. Thus, the Soviet worker, the main goal was to find a suitable job for the duration of his working life (Clarke, 1999, p.2) .12
labor force participation rates were considerably higher than in Western developed countries. This is mainly due to higher participation rates among women in their early 40s, but younger women in childrearing ages, thanks to well-developed system of child care and generous maternity leave. As shown in the table below, to 1985, the Soviet Union had a labor force participation rate for 40-45 year old women of 97% compared to the rate of 71% in northern Europe and 37% in southern Europe. Higher participation rates were associated with greater equality of women in education and better career prospects than in many market economies.
Georgian structure of employment reflected that of the wider economy. Shortly before the collapse of the Soviet Union, agriculture employs one quarter of Georgia labor, industry and construction together employ 30%, while the rest were employed in the service sector, mainly in health and education (Yemtsov, 2001, p.7). Similarly, a third of national income in relation to agriculture, while industry and construction together make up one quarter.
Agricultural production is organized in Sovkhozy paid a fixed salary, a Kolkhozy (collective farms), which is paid to workers from the rest of the revenue. However, despite the focus on agriculture, Georgia and other republics relied rely on food imports from Russia, it is a consequence of specialization, which meant that the majority of Georgia's production was concentrated in tea, citrus fruits and wine.
Along with heavily taxed and rigid formal labor market, there was a secondary labor market, which was liberal and broadly in line with Soviet ideology. Individuals engaged in the so-called 'second economy to supplement their official income. Some of these activities are legal, while others were clearly illegal.
Grossman (1977), which is largely responsible for spreading the term 'second economy', according to legal second economy consisted of certain activities that are in conflict with the Soviet ideology, because they are taken for private benefit, but nevertheless allowed by law. Among these are small parcels in agricultural production, construction of private housing (especially 'dachas'-Holiday), and the private practice of individual professionals such as doctors, dentists, teachers and mentors (Grossman, 1982, 256). Private farming was by far the most important of these activities, and were allowed not only for farms that worked on the collective, but also for many households with primary employment outside of agriculture, which are assigned to small privately owned land outside the city limits to build their dachas.
According to Grossman illegal second economy consisted of four types of activities: (1) stealing from the government, (2) speculation, (3) illicit production and (4) underground enterprise. Stealing from the government, which included stealing everything from light bulbs to exit the company, was widespread. Grossman relates:
All sources agree that it is practiced by almost everyone. All also agree that it takes public for granted, almost no shame attaches to it and to the contrary, condemns those who do not participate in it - and sharply distinguishes between stealing from the government and steal from private individuals' <. / P>
speculation, which is also widespread, involved buying and selling products for profit, often taking advantage of regional differences in endowments of goods. Goods bought in the area where they were in surplus and sold one in which they were rare. Another "second-economy 'activity was illicit production or manufacture that occurred for private gain or outside working hours. These illegal private activities were mainly for household and repair of buildings (using unregistered construction workers and materials), auto repair, sewing and tailoring, moving furniture and other transport services. Finally, the 'underground companies' formal enterprises which also have been involved in everything from small 'plan manipulation' of large-scale illegal production.
Georgia has what is perhaps the most comprehensive, visible and tolerated by the 'second' economy in the Soviet Union.
Georgia has a reputation second to none in this regard ... The pattern of this activity may not differ greatly from what occurs in other regions, but in Georgia, appear to have conducted an unprecedented scale unparalleled scope and daring'.
Similarly, Mars and Altman propose:
Soviet Georgia shows remarkable economic ebullience ... connected in parallel fermentation in Georgia, second economy, which the Soviet viewers ... As confirmed continuously particularly dominant in comparison with those of other Soviet republics.
agriculture makes up most of Georgia's second economy. Due to its southerly location, Georgia has had a monopoly on the production of citrus in the USSR and had a substantial advantage in growth outside the seasonal fruits and flowers. Rather than being distributed throughout the states of the USSR, the products are sold directly by manufacturers in the 'free market' (especially in northern regions of the Soviet Union), to a much higher price. Some estimates have put Georgia's share of private agricultural income in the early 1970s, to 40% of total agricultural income.
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