Yevgeny Khokhlov

T

en trade unions representing all Russian basic industries held a roll call voting among their members on participation in a national warning strike that may take place in October. As chairman of the Miners’ & Metallurgical Workers Trade Union of Russia Mikhail Tarassenko states, this protest is caused by “the authorities’ social and economic policy”, including recent changes in social laws initiated by the Government.

How it all started
Observers agree that the current situation in Russia is ideal for conducting reforms. The United Russia party that is loyal to the Kremlin won the absolute majority of seats in the State Duma in the parliamentary elections in December of 2003, while the right-wing opposition was a complete failure and the liberal parties suffered substantial losses. Thus, there are no obstacles to the Government’s legislative initiatives: getting bills through the Parliament has become an almost technical procedure. Reforms are furthered by favorable economic conditions as well. High prices for oil, the most important item of Russia’s export, make it easier to repay the state foreign debt, keep the federal budget steadily in the black and help accumulate financial reserves.
So, Mikhail Fradkov’s Government enjoys such a freedom of action as, probably, no other previous Cabinet had. Experts predicted that in all probability decisions by the authorities would be unpopular but they did not imagine that reforms would be spread to the most delicate sphere of social relations or, to be more exact, benefits to the least socially protected citizens.
These benefits, i.e. the right to get various social services free of charge or at a significantly reduced rate (rent and payments for utilities, telephone, transportation fees, some kinds of medicine, etc.), cover war veterans, workers involved in the cleanup of the Chernobyl NPP accident, families with many children, invalids, victims of political repressions and citizens in other categories. This system was being formed for decades and today it embraces tens of millions of people. For a long time it was considered cumbersome, ineffective and not exactly just. So far, however, nobody dared to upset it. But Fradkov’s Government proposed a radical option: to replace benefits with cash payments.
It took only four months to draft and pass the package of laws to ‘monetize benefits’. The authorities considered the very idea so sound that they decided to do it without a broad public debate. However, this self-confidence let them down. The Government’s actions were considered the infringement on citizens’ rights. Meetings that took place gradually developed into an organized movement against the authorities’ policy. As soon as the upper house of the Parliament passed the draft law, the Council of public solidarity that unites organizations of veterans, invalids, human rights activists and trade unions passed over to the President’s administration the list of 80,000 signatures by citizens protesting against the new system of providing money in lieu of benefits.
"The State has replaced the struggle against poverty with the struggle against the poor", declare participants of the protest movement.

What makes metallurgists angry
The Miners’ & Metallurgical Workers Trade Union of Russia with over 1 million members also joined the ranks of protesters. As the union’s chairman Mikhail Tarassenko points out, the situation in the industry itself is quite satisfactory: production volumes are on the rise, companies’ profits as well as wages are growing. In principle, the position of the union on the benefit-monetizing law is tolerant. In Tarassenko’s opinion, the most important thing is to satisfy two conditions: to establish a strict mechanism of indexing cash payments dependent on the rate of inflation and to prevent using funds of private business for these compensations because in this case it would become sort of a new social tax. But trade union leaders have nothing against the very idea to replace unrealized or ineffective benefits with cash payments.
Why, then, are metallurgists angry? What are their grievances against the Government? In his response, the chairman of the Miners & Metallurgical Workers Trade Union names three major reasons to strike. "First, we demand that the minimum wage correspond to the living standard and that the Government be obliged to fix this formula by law. Second, we are against reducing the single social tax. Third, we demand that pensions be paid out in accordance with length of service and guarantee a decent life for veterans", says Tarassenko.
Detailing the essence of these demands he notes:
Under the existing law the minimum wage in Russia amounts to 600 rubles a month ($20), i.e. just 25% of the officially established living standard. In practice, it is used, mainly, as a calculation index to determine the amount of fines, compensation payments, etc. Actual earnings of industrial workers are significantly higher.
But, as Mikhail Tarassenko believes, the artificially understated amount of the minimum wage helps maintain "gray" schemes of wage payments. Precisely because of this, miners and metallurgists - while getting legal earnings - have to pay from the given amount taxes and fees in full and receive no adequate help from the social insurance system. Besides, in Tarassenko’s opinion, the too low wage minimum established by the State hinders negotiations with employers and frustrates attempts to get increased basic tariffs.
In the meantime, Russia keeps following its course toward reducing the general level of the tax burden. After canceling the sales tax and decreasing the added-value tax Mikhail Fradkov’s Cabinet decided to lower the single social tax from 35.6% down to 30% starting in 2005. This measure is aimed at providing business with even more freedom. But the chairman of metallurgists’ trade union is charging the Government with the "political craftiness": in practice, reducing this tax is beneficial only to entrepreneurs, who pay out very low wages. If an employer pays his workers over 10,000 rubles a month ($350 and more), he does not gain anything. But, instead, social funds lose about $10 billion. Tarassenko thinks that the direct result of this decision is the Pension fund’s budget deficit planned for 2005 in the amount of $6.7 billion.
"There are no changes for the better in the situation with the pension provision in Russia", states Mikhail Tarassenko. "It also affects metallurgists, who represent such a difficult profession. By using their legal right to retire at the age of 50 they risk reducing their money income by as much as 10 times", he notes. This contradicts the Convention of the International Labor Organization, which clearly states that pensions cannot be lower than 40% of past earnings. In the words of the union’s chairman, even Ukraine, where the general economic situation is no better, has a more progressive pension provision system that takes into account both the level of earnings and length of service. "We calculated that by the Ukrainian procedure a Russian steel maker would get a pension three times as high as he had in Russia", Tarassenko says.

How to stage a strike
"We recognize that a strike is the ultimate form of protest, when other ways bring no results", Mikhail Tarassenko points out. "It seems to us that now is the case. On our part, it is not a blackmail. We do not see any other way to make the Government listen to us. Our appeals have been ignored", he stresses.
Russian laws provide for staging strikes only in case of labor conflicts with employers and they do not deal with political protests by trade unions. Mikhail Tarassenko does not doubt that they will have to go through a complicated juridical procedure so as to ensure a legitimacy of the forthcoming action. "Although we are guided by conventions and recommendations of the International Labor Organization, i.e. documents signed by Russia, I am sure that we have to get ready for a series of court investigations, probably in the Constitution Court as well", says Tarassenko. That is why he is cautious in predicting dates but believes that a one-day strike will take place no sooner than in mid-October, if, of course, it is to be staged at all.
The chairman of the Miners’ & Metallurgical Workers Trade Union stresses in every way possible that this protest is not directed against business leaders. What is more, he expresses his satisfaction with the way that the industry’s modernization is being implemented. Tarassenko reminds that under the plan to modernize the metallurgy the number of workers employed till 2010 should be cut down by 350,000 people. In two years that have passed since this program has been adopted 135,000 workers have already been dismissed. But no social conflict has happened whatsoever. In Tarassenko’s opinion, companies are sticking to obligations that they have taken upon themselves. They set up subsidiaries, help establish new production facilities and re-training centers. The union’s chairman believes that actions by the company EvrazHolding can serve as a model of the socially responsible restructuring. According to the International Labor Organization, these actions correspond to the European standards. Among the socially responsible companies Tarassenko names almost all major steelmakers and producers of non-ferrous metals and, in particular, Severstal, MMK, NLMK, the Mechel Steel Group, the Tube Pipe Company, Rusal, the SUAL Group, etc.
However, the emphatic loyalty of the union’s chief fails to completely reassure leaders of these companies. They are still worried that a talked-about demonstrative action may provoke attitudes in support of protests and strikes will change directions becoming directed against employers. Although metallurgists go on strike much more seldom than miners (workers of the coal-mining industry), for example, by the data of the Miners’ & Metallurgical Workers Trade Union, there were no less than 10 strikes lately, including actions at Norilsk Nickel and North-Ural Bauxite that is incorporated in the SUAL Group.
Mikhail Tarassenko also does not deny a possibility of labor disputes getting aggravated: "We do recognize collective agreements and the Industrial tariff agreement but the change in the state social package as a result of adopting new social laws can induce reviewing agreements with employers". As Tarassenko believes, at least wages should be increased adequately in view of personnel reduction "and then we would have enough reasons not to tie it up to the productivity growth". Foreseeing a possibility of sharper conflicts the trade union is trying to prevent them through pressuring the Government. Explaining the union’s tactics, its chairman again appeals to companies’ leaders. "We count on employers’ restraint with respect to those forms of protest that we will choose", he says.