Mikhail Shmakov: “Labor should be expensive”

How Russian trade unions have to work today, what prevents primarily the approach of workers’ protection standards to the level of civilized countries, which business regulations sometimes not only harm entrepreneurs themselves, but also pose a threat to safety at work — all these issues and many other ones you will find in the interview that the chairman of the Federation of Independent Trade Unions of Russia (FNPR), member of the State Council of the Russian Federation Mikhail Shmakov gave to Invest Foresight.

Vladimir Astapkovitch / RIAN
Vladimir Astapkovitch / RIAN

There is a market, but the salary level is non market-relevant

— Mikhail Viktorovich, how do you appreciate the results of All-Russian Day of the FNPR “For Decent Work” in October 2021?

— First, I would like to remind readers of your magazine that the World Day “For Decent Work,” within the framework of which the All-Russian action is held, is celebrated annually by the world trade union movement on October 7 by decision of the International Confederation of Trade Unions (MCP) since 2005. The FNPR, along with the rest of the almost 180 membership organizations of the MCP, adopted the main message of this day: work should in principle be worthy. Here, the concept of dignity extends equally to the level of salary of an employee, to the creation of appropriate conditions and safety of his workplace, and to the protection of his social and labor rights.

The FNPR holds a single day of action “For Decent Work” on October 7 regularly, using various forms and methods: from organizing marches and rallies with economic requirements for employers and authorities to thematic meetings of tripartite commissions to regulate social and labor relations at both the federal and regional levels. In the outgoing year 2021, on this day, emphasis was placed on meetings of tripartite commissions in the constituent entities of the federation.

What do we first draw the attention of employers and government officials to? The fact that we still have a non-market wage level in our country. Wages are mostly clearly underestimated, and all sorts of distortions and contradictions arise from this, among which the most important trouble is people’s dissatisfaction. And this in turn leads to distortions in the economy itself.

— Is the whole reason for such distortions the fact that workers are simply underpaid?

— In our opinion, the whole point is that the government and various economic institutions serving it still, as it was in the 90s, do not want to recognize wages as an economic category. Yes, there are, of course, serious economists in their structures who share our point of view. However, in the framework of the activities of not only the current Cabinet of Ministers, but also the previous ones, the attribution of salaries exclusively to social issues prevails. Nothing more.

The experience of advanced countries testifies: if wages are not recognized as an economic category, an imbalance is launched both in the economy and in society. Most experts, regardless of their political preferences, state: if there is no social development — there is no economic growth. Who is the key investor at home? Specific person, taxpayer! When gas and oil are steadily sold abroad and fuel and energy companies get profit, they then, accordingly, pay taxes to the treasury. But you cannot infinitely follow this scheme, and the question here is not so much about the inevitable transition to green energy. Long-term development is possible only due to a stable increase in the level of solvent demand of the population. And we state: there is demand, of course, but insolvent one — there is no money. And further on: small and medium-sized enterprises are going bankrupt, large companies are not able to sell their products…

Tripartite commissions as a kind of “Norman format”

— Many years of experience of tripartite commissions, a basic tool in the work of trade unions, have repeatedly shown its effectiveness. However, was it not on the agenda, for example, to increase the number of participants in that format? What other updates does it need, in your opinion?

— The format does not need neither updates, nor any revolutionary additions. I’ll give you a political analogy. Everyone knows the “Norman format,” which includes, as you know, four participants, and Ukrainians say: let’s invite there Americans… Meanwhile, the existing format does not require expansion, but needs to use its own potential that is, I am convinced, yet unrealized.

The main players in the field of labor relations continue to be an employer who creates jobs and, accordingly, forms a wage fund, and workers who produce products and provide profit for the owner. At the same time, it does not matter who speaks to them: the state or a private entrepreneur. And the third, no less significant, player is the government, which, through the existing legislative framework, must regulate labor relations, striving to make them as harmonious as possible.

I.e. doing their best to make labor protected, to provide guarantees for a person — both for the same remuneration (including the regularity of payments), and for occupational safety. They somehow forget about these capital truths today, since some of the influential liberal economists are not tired of repeating: why do we need all these “blockages,” clearly stipulated, by the way, in the Convention of the International Labor Organization (ILO)? Isn’t it easier for the owners themselves under individual labor contracts to decide with each applicant for the vacancy: we will pay one, relatively speaking, 100 rubles; to the other — 200, and to the third — 400 or 500 rubles.

— “Cost cutting”?

— Yes, and all this is due to the fact that in the negotiations on wages, on working conditions, on the schedule of working hours and rest, the employer is always in a stronger position. It is therefore imperative to involve the state as mediator, which by its laws initiates and guarantees the monitoring of of employees’ rights.

The history of the emergence of the legal complex of labor standards and their law enforcement practice dates back to 1919, immediately after the First World War. Now it would be useful to recall and analyze — why precisely at this time? It was then that a wave of revolutions took place in many European countries, and all of them — both in Russia, in Germany and in Austria — were of a pronounced socialist nature. It is clear that all this in one way or another led to chaos. Many saw the cardinal cause of a series of upheavals in the wild imbalance between the situation of workers and the way the ruling class openly lived.

In order to begin to rectify the situation in a civilized manner, in my opinion, an ingenious decision was made to create a system of permanent tripartite consultations that would equally take into account the interests of all parties. Later, having passed both meaningfully and legally displayed in the declaration and other documents of the International Labor Organization, it received the name of social partnership.

— How did this great initiative lay on the Russian soil?

— The bottom line is that in fact, since 1991, Russia began to live, one might say, from a greenfield in economic terms. Although trade unions at that time had already been adapted to the new principle of the relationship between the employee, the employer and the authorities. Let us recognize that the elements of social partnership also worked under pre-perestroika socialism — in the form of collective agreements. Nevertheless, almost 30 years ago, a significant turn was made to build the work of Russian trade unions by world standards, on the democratic foundations enshrined in the ILO Charter. In November 1991, the Decree of the First President of the Russian Federation Boris Yeltsin “On Social Partnership” was adopted, and in February 1992 we faced next Decree “On the Creation of the Russian Tripartite Commission for the Regulation of Social and Labor Relations (RTK).”

Naturally, the initial stage of any process is not immune from any failures. But despite everything, we managed to debug the work quite quickly. The Federal Russian Tripartite Commission (RTC) for the Regulation of Social and Labor Relations from that time to this day meets regularly — once a month. It considers topical issues of social and labor relations, which are previously discussed at working groups.

What is noteworthy: we have achieved that any bill, if it affects social and labor relations, is submitted to the State Duma and the Federation Council (and then considered there) only after thorough discussion at the Russian Tripartite Commission.

— In other words, does this platform serve as a filter on the part of trade unions?

— Of course, some bills are supported, while others are rejected. I also consider it a big step forward that the norm appeared in the regulations of the Government of the Russian Federation that laws affecting social and labor relations should be previously considered on RTK. Sometimes, however, this rule is violated, for which we often criticize the government, as, for example, when it did not agree with the position of trade unions considering raise of the retirement age.

In general, the system of social partnership has developed and is firmly rooted in the country: all subjects of the federation have their own regional tripartite commissions. Moreover, over the past 7–8 years, we have gone further — we have formed appropriate structures at the municipal level. In almost every municipality, appropriate coordinating councils have been established, which involve a tripartite format.

— It is not hard to work with local officials who often feel like “princes” in their municipalities “?

— No, despite the “grassroots” level, these councils have to get involved in solving the very difficult problems that are generated by the plexus of various commercial interests. That is, we are talking not only about how to change, for example, the route of the city bus, but also about (by the way, this has become a frequent phenomenon) how to counteract attempts by cartel conspiracies of employers in the field to reduce the wages of their employees.

Safety precautions sandwiched between old salary rate and regulatory guillotine

— What laws and decisions need to be adopted as a matter of urgency to protect the person of labor, to reduce social tension?

— On urgent measures, I would note the following. Very little time has passed since the terrible tragedy at the Kemerovo mine “Listvyazhnaya.” And now that more and more details are revealed as this incident is investigated, do you know what appears among the main causes of the incident? The organization of the payroll system is incorrect. After a similar incident at the Raspadskaya mine in 2010, when 91 miners were killed and 133 got injures of varying severity, Russian President Vladimir Putin, among the first assignments, clearly indicated to establish: what, in fact, was the situation with the remuneration of miners for their heavy and dangerous work? And it was revealed that safety violations arose largely because the permanent (tariff) part of their salary remained low — even by the standards of the region, while the rest was directly proportional to production volumes. The head of state then reacted with a new order — to consider the initiative to ensure that the guaranteed component of the salary is at least 70% of the total amount. And the order was not fulfilled!

Formally, everyone reported, the Ministry of Labor and coal companies, but in fact, no changes have occurred. After all, the tariff is still low. Therefore, until now, if the miner has a salary in the range of 98–100 thousand, then its tariff part is only 20 thousand, and it directly depends on production. All this cannot but lead to plotting, and direct disregard for safety standards. And such a picture, I note, is not only in one coal industry but, unfortunately, everywhere.

The second problem, which is clearly highlighted as a result of this trouble. Thoughtless simplification of accounting, control and business documentation, the so-called regulatory guillotine, unfounded calls to “stop scaring business” — this whole campaign has led to the fact that the relevant state bodies, designed to monitor, among other things, dangerous industries, are discouraged. We are talking primarily about Rostrud and Rostekhnadzor. First, they are limited to the number of inspections per unit of time; secondly, now they are obliged to warn in advance about their visit to the enterprise. Well, you know, it’s just an absurd innovation! Or, if the inspection is not planned, they must warn about it in 10 days, in addition — get permission for it from the prosecutor’s office.

In other words, among problems considered to require immediate resolution, I would call either a complete abolition or a serious correction of such quick and harmful “regulations.”

In the protection of the person of labor — there is competition as well

— Does the federation have contacts with other independent Russian trade unions that are not part of the FNPR system, which are still numerous in Russia? Has there been any experience with them, including on human rights issues?

— I would not argue that trade unions that are not members of the FNPR in the country are numerous … But they work, we have an even, albeit competitive, relationship with them. In general, there is such an observation in life that competitors are beaten. Of course, we, with our colleagues, do not enter into some completely unacceptable fights, but we always know that in our trade union “glade” we are not alone. And if we stumble in something, then someone can protect a man of labour better than us. This maintains a normal working tone.

I must say that not only representatives of the FNPR work as part of the trade union side of the Russian tripartite commission for the regulation of social and labor relations, which we have already talked about. Two more trade union centers have long been represented in the RTC.

And for the completeness of the picture on our federation, it should be borne in mind that the FNPR is not a trade union, but an association of membership organizations as legal entities, a “roof” (in the most good sense), under the arches of which there are 40 branch unions. And when sometimes you hear from ignorant people that there are “few independent trade unions” in Russia or that they are not allowed to work, it is important to distinguish a real association from such a union (with a smile), where only a husband, wife and mother-in-law do participate, since three people can enter the union on formal grounds.

— You are a graduate of MVTU named after Bauman, you began your career as an engineer in the defense industry. In this regard, the question is not only as a leader of the FNPR, but also as a person from manufacturing department: are you seeing positive advances in improving the image of working professions and — if wider — of people engaged in the real sector of the economy?

— In my opinion, just the shortage of skilled workers leads to an increase in the prestige of working professions. Labor must be expensive. If it is cheap, it is unlikely to contribute to progress and productivity growth: why buy an expensive robot if you can hire two or three cheap workers? Why spend on an excavator if it is easy to find a team of diggers?

Migrant workers have a considerable influence on labor relations, which reduce the cost of work in the domestic Russian market. Therefore, the current certain outflow of this category, for certain reasons, generally increases the price of work, especially of the skilled. The FNPR advocates training throughout the life of an employee, for the constant improvement of his skills.

And in my opinion, laymen only can say that the prestige of working professions is low, that everything is bad, everything is gone, etc. For example, the automotive industry in the Russian Federation — today without exaggeration — is at the level of world standards. Recently, I returned from a business trip to Togliatti, where I had not been for ten years. There I saw with my own eyes how dramatically the VAZ had changed. The plant was reconstructed, the quality of the products produced and the organization of labor became no worse than the best international analogues.

Or take the new challenges that all of us face with the advent of a green economy. I know how successfully breakthrough projects are being mastered at the enterprises of the same Rosatom, we are already talking not only about experienced, but also about serial samples of new reactors, on fast neutrons. And this is, more or less, a revolution in the entire energy sector.

Interviewed by Alexey Golyakov

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