GENEVA (ILO News) - Ten years after their country gained independence, millions of workers in the former Soviet republic of the Ukraine continue to be unpaid, either because they are put on so-called "administrative leave" for many months or are uncompensated despite turning up for work, according to a new survey by the International Labour Office (ILO) covering more than 1,800 factories. ¹

At the same time, a national People's Security Survey ² of 8,200 adults shows that over four of every five Ukrainians lack access to adequate health services, one in every seven workers toils in "very unsafe" conditions, and that over two in every five workers hadn't received any wages over the previous three months.

The ILO Report on the People's Security Survey, besides showing the above, also found that:

• Most Ukrainians do not resort to government agencies when faced by economic or social crises in their lives.
• On average, adults thought that the real unemployment in the country was about 40 per cent, more than three times the official rate, and a majority expected it to rise.
• Actual unionization is much lower than claimed, being 43 per cent, and perceived as falling rapidly; less than half the workers had a positive attitude to unions.
• Over 83 per cent of the respondents said they felt poor, and almost as many reported that they expected to be poor in old age.
• On average, respondents believed a family of four needed 1580 UAH a month for a decent standard of living, whereas only 3.3 per cent had a per capita income of over 300 UAH a month; only 4 per cent expected family income to rise over the next year.
• Only about 22 per cent of the unemployed had received unemployment benefits for most of the time they were unemployed, and about half the unemployed who had received benefits had received an amount less than half their previous, low wage.
• About a third of all households were in arrears in paying for their housing, and nearly half were in arrears in paying for gas or electricity in their homes; indebtedness was pervasive.

The ILO Report on the enterprise survey highlights the following remarkable facts:

• Although Ukraine is one of the most populous countries in Europe, with nearly 50 million people, the population has shrunk by nearly two million since it came into independent existence in 1991, due largely to the decline in life expectancy among men.
• Employment has shrunk by one-third since 1991. After nearly a decade of economic decline and stagflation, mass open unemployment has arrived, with an open unemployment rate of over 12 per cent and an effective rate of over 20 per cent.
• Uniquely, women account for a majority of all those in jobs. In no other country do women comprise more than 50 per cent of total employment.

Among the findings from the detailed survey, carried out in 2000 by the ILO's Socio-Economic Security Programme in collaboration with the national statistical office, are the following:

• Barter between firms now accounts for one-quarter of total industrial output, highlighting the failure to develop a market economy. The management of one in every seven firms believes strongly that the firm will go bankrupt in the next 12 months. On average, firms reported that they were operating at 45 per cent capacity, which is extremely low by international standards and much below what was the case in early rounds of the ILO survey. Even worse, given the impoverishment that has occurred, the food-processing sector has been operating at the lowest capacity rate.
• Over a third of all firms reported that they could cut their workforce without reducing output, with one in every four engineering firms reporting that this was the case.
• Those firms reporting that they had surplus workers said they could cut employment by 23 per cent, on average.
• One in every three firms had put workers on unpaid leave, and many others had resorted to "partially paid" leave, giving workers a token amount, usually the equivalent of the minimum wage, which is well below the subsistence income level. Taking unpaid and partially paid administrative leave together, 47 per cent of all firms had workers on such "leave", and in those firms on average, over one third of all workers were in that position.
• Firms have been making redundancies, and there is no obstacle to their doing so. Employment levels are declining quite sharply. However, the ILO report concludes that this understates the real decline, since many of the workers on long-term "leave" are in reality no longer employed. This means that the true level of unemployment is much greater, since the employment level is being systematically inflated while the unemployment level is being artificially deflated. ³
• Further inflating the level of women's employment has been the practice of putting many women on extended "maternity leave". One in every 12 women employed in Ukrainian industry are classified as on maternity leave, which should be considered in the context of the extremely low fertility rate in the country, which is below the abortion rate and below a level required to ensure a stable population.
• Although women still comprise more than 50 per cent of all workers in many sectors, more managements than in previous years reported that they prefer to recruit men. But very little recruitment is taking place.
• Over two-thirds of all firms reported that they had considerable difficulty in paying contractually agreed wages, with over 80 per cent reporting this in the construction sector.
• Three out of every five firms reported that they had not paid their contractually agreed wages, and on average they had not paid wages for six weeks.

In conclusion, the ILO report warns that mass unemployment has arrived in Ukraine and that much more is to come. This is very worrying in that most unemployed do not receive unemployment benefits, and among those who do receive them the amount received is extremely low. It is essential for the welfare of workers and their families that these benefits be raised and made available to a much greater proportion of the unemployed.

It is equally essential that firms be obliged to pay their contractual wages, and recognize that a large number of those put on long-term unpaid leave are really no longer employed. Only then will they be entitled to obtain assistance and be encouraged to seek alternative income-earning activity.

The labour market situation in Ukraine is desperate, contributing to the reduced life expectancy in the country and the flow of people into central and western Europe. Many millions of workers are suffering acutely. Their plight deserves more attention than it has received.

An international conference held in Kiev on May 31-June 1 considered the results and implications of the two surveys. Opened by the Minister of Labour and the Chairman of the State Committee of Statistics, it reviewed the findings, and policy options for remedying the worst aspects of the crisis. Senior leaders of the trade unions, the employers' organizations and members of many civil society organizations participated.

1 L. Zsoldos and G. Standing, " Workers' Insecurities in Ukrainian Industry: The 2000 ULFS". Geneva, International Labour Office, Socio-Economic Security Programme, 2001, ISBN 92-2-112483-5.

2 L. Zsoldos and G. Standing, "Coping with Insecurity: The Ukrainian people's Security Survey". Geneva, International Labour Office, Socio-Economic Security Programme, 2001, ISBN 92-2-112656-0.

3 The unemployment rate is calculated by dividing the number of unemployed by the total of the unemployed and employed.