Wage reform in the Soviet Union, 1956–1962

During the Khrushchev era, the Soviet Union attempted to implement major wage reforms. The reforms were intended to move Soviet industrial workers away from the mindset of overfulfilling quotas. Most workers in Soviet industry were paid on a piece-rate system, where their wage payments depended upon how much work they personally completed. In 1956, approximately 75 percent of Soviet workers were paid under such a system. The wages reforms ultimately failed to create a more efficient system and have little impact on the current economic situation in the USSR.

About Wage reform in the Soviet Union, 1956–1962 in brief

During the Khrushchev era, the Soviet Union attempted to implement major wage reforms. The reforms were intended to move Soviet industrial workers away from the mindset of overfulfilling quotas that had characterised the Soviet economy during the preceding Stalinist period. Most workers in Soviet industry were paid on a piece-rate system, where their wage payments depended upon how much work they personally completed. The piece- rate system led to the growth of bureaucracy and contributed to significant inefficiencies in the Soviet industry. In practice, the reforms failed to offer an efficient financial incentive to Soviet workers by standardising wages and reducing the dependence on overtime or bonus payments. In 1956, approximately 75 percent of Soviet workers were paid under such a system, so the majority of workers could significantly boost their earnings by increasing their output. The wages reforms ultimately failed to create a more efficient system and have little impact on the current economic situation in the USSR. The wage reforms have little effect on the vast bureaucracy that is involved in administering the wage scales and payments for work in the state or government enterprises for which they are responsible. The Soviet Union is now one of the most powerful economies in the world, with a population of more than 100 million people and a GDP of $1.2 trillion.

The average wage in the United States is around $50,000, compared to about $30,000 for the United Kingdom and about $40,000 in the U.S. for the rest of Europe. The current average wage for Soviet workers is about $25,000. The minimum wage is $1,000 a year for men and $2,500 for women, but this is not the same as the minimum wage for men in the 1950s and 1960s. In the 1980s and 1990s, the average wage was around $30 to $40 a week for women and $25 to $50 for men, but the average rate for women was $50 to $60 a week. The rate for men was higher than for women because it was more generous because it was based on a more flexible scheme of pay and benefits, such as a higher-than-average salary rate and a higher rate for overtime. The average wage for women was about $20 to $30 a week, and for men it was between $30 and $50. The increase in the wage rate was due to the fact that women were paid less than men for the same work, and that men were paid a higher rate for overtime than women. The system was intended to encourage workers to work hard and produce as much as they possibly could, but it has been criticised as being ineffective and inefficient in the modern era. It has also led to significant inefficiencies in Soviet industry, including the creation of vast bureaucrats that administer the wage scales and pay rates for different sectors of the economy.

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