Sunday, January 22, 2017

Russians Work Far More Hours but Far Less Productively than Most Other Nations, OECD Says

Paul Goble

            Staunton, January 22 – Russians work far more hours per year than do most other nations, but they are far less productive in terms of their contribution to their country’s GDP than are the latter, according to data collected by the Organization for Economic Cooperation and Development (OECD).

            The OECD data show, “Ogonyek” journalist Kirill Zhurenkov says, that for every hour a Russian works, he contributes 25.1 US dollars to GDP while the comparative figures for the US are 68.3 and for Germany 66.6. Russia outranks only Mexico where the figure is 20, a position it has occupied for longer than just the last year (

            But in terms of the number of hours Russians work each year, Russia is “among the leaders. They work on average 1978 hours per year, while German workers do so only 1371 and French ones 1482.  That is, Russians have to work far more hours to produce the same amount others do.

            Aleksandr Shcherbakov of the Russian Academy of Economics and State Service says there is little chance that Russia can break out of this pattern anytime soon.  Russian productivity lagged far behind Western countries in Soviet times, and between 1991 and 2012, it rose only by a third, while productivity shot up in China by seven times and continued to rise elsewhere.

            The explanation lies both in the aging and out of date equipment Russian firms use and in the attitudes and actions of Russian workers, he says. There is no sign that either is getting better and some that they may both be getting worse.

            In 1990, 35.6 percent of the equipment in Russian factories was out of date; in 2014, the share of such equipment had risen to 49.4 percent, Russian experts say. That is the case not only across all industry but even in the oil and gas sector on which the country has sought to rely.  Indeed, getting back to where Russia was at the end of Soviet times would be an achievement.

            There are many reasons why entrepreneurs and managers are not investing in new equipment: the difficulties of getting loans, the uncertainty about the future even the near future, the lack of available machines on the domestic market, and the increasing problems, as a result of sanctions and Moscow’s attitude, involved in importing them from abroad.

            Recently, two experts at the Higher School of Economics, Vladimir Bovykin and Mikhail Lisin pointed to an even more fundamental problem: “owners and leaders of firms simply aren’t thinking about raising labor productivity – they don’t have any concern about that.” Instead, the focus on seeking rents of various kinds.

            But ordinary workers are also a problem. “Under conditions of de-industrialiation, business is focusing not on the motivation of personnel but on other factors of growth.” And some of them say that talk of “’talent management’” is all very well but that a more immediate issue is how to prevent drunken workers from screwing things up.

            Shcherbakov says that the workers lack much incentive to improve because wages remain so low: the lag there – seven to eight times – is almost twice that in productivity – three to five times.  Some think productivity is low because wages are slow, but he argues that only if there is high pay will there be higher productivity.

            Spain, the “Ogonyek” journalist notes, is trying to do away with the traditional siesta to boost productivity there. “Russians don’t have siestas,” he points out, but they do have something else: private plots which they work on in order to produce enough food for themselves and their families.

            If Russians spent less time working on their dachas and private plots, Rostislav Kapelyushnikov of the Higher School of Economics says, and if that time were excluded from their labor hours, then the productivity of Russians would rise about 20 percent, putting Russia at the middle of the international ranking.

             But for that to happen, Russians would have to give up what has become a core part of their culture; and they would have to be assured that there would be enough food available from other sources.

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