Wages Fund


Also found in: Dictionary.

Wages Fund

 

the fund of financial resources representing, in monetary form, the part of national income that is distributed among the members of socialist society for the satisfaction of their material and nonmaterial needs, distribution being based on the quality and quantity of work performed. The wages fund is used to pay industrial workers and other employees for the work they perform; it is also used to pay workers during regular vacations, any additional holidays or leaves of absence, and any time spent in carrying out civic duties or performing tasks at the behest of the state. Bonuses and other types of additional payments to workers are also covered by the fund, as are the costs of any apartments, municipal services, and work clothing that are supplied without charge to employees by enterprises, institutions, and organizations. The wages fund is also used to cover any other payments to workers dictated by existing legislation. However, it does not cover bonuses and other payments for which there are special sources, such as the material incentive fund, the fund for the introduction of new technology, and the consumer goods fund.

The wages fund, which is broken down on a quarterly basis, is authorized annually for the national economy as a whole and for each Union republic, ministry, and department. Provision is also made for the economic activities overseen by executive committees of the soviets of people’s deputies. Administrative bodies set the wages funds for each quarter, with a breakdown by month, for the enterprises and organizations under their jurisdiction. The wages fund is an indicator established by directive; either an absolute sum will be approved, or a planned standard will be set, for example, so much per ruble of output, per ruble of work performed, or per ruble of services. Five-year plans covering wages funds are authorized for enterprises annually.

In industry, the planned wages fund is the sum of money considered necessary for reimbursing labor of a given level expended in meeting production targets within a given period (month, quarter, year). Here, a distinction is made between the labor costs for industrial workers, that is, those directly involved in production, and those who are only indirectly involved. The projected amounts, which are expressed as both absolute sums and percentages, are based on the labor inputs required for a given program of production; the calculations for arriving at the labor inputs take into consideration the appropriate planned standards and the need for certain types of industrial workers and auxiliary personnel. The projections for the wages funds are also based on current wage scales, piece rates, and servicing norms, on the salaries and sizes of the engineer-technical, administrative-clerical, and maintenance staffs, on the policy regarding bonuses, and on existing legislation on labor and wages.

Between 70 and 90 percent of the figure for labor costs is determined through the wage rate system. The wages fund is determined as the product obtained by multiplying the average wage rate for each category of work by the number of workers in each category; in some branches, it is expressed in terms of a planned standard, that is, so much per unit or per ruble of output. In projecting and analyzing actual wage levels, bonuses and other payments for outstanding performance covered by the material incentive fund must be added. As a rule, the rise in labor productivity must exceed the rise in average wages and payments from the material incentive fund.

In the event that the production plan is overfulfilled, the wage payments that exceed the approved totals are met by the State Bank (Gosbank) of the USSR. The bank’s payments are governed by existing norms, which specify amounts to be paid for each percentage point of overfulfillment on the basis of the labor inputs involved and the structure of the wages fund. Here, the bank payments are used to supplement only the wages fund for the industrial workers, not the overall wages fund.

In the nonproduction sphere, the wages fund is calculated differently. In trade, for example, it is a percentage of turnover, with allowance for any increase in labor productivity. In administrative agencies and in institutions financed by budgetary allocations, the wages fund depends on the number of employees, with allowance made for service norms; it is determined by multiplying the salaries corresponding to the various positions by the number of employees in each position.

The overall wages fund also includes an amount set aside to pay for the labor costs of temporary workers and for work that is not ordinarily performed by the permanent staff. Payments here are governed by the same norms and piece rates that apply to full-time employees. The wages fund for temporary workers depends on the volume of work foreseen in a given period, with amounts paid out in earlier periods used for comparison.

The size of the wages fund is closely related to other indicators of the national economic plan, first and foremost with plans covering consumer goods, services, and commodity circulation and with the cash plan of Gosbank, the plan of money circulation, and the balance of the monetary income and expenditure of the population.

The wages fund has a marked effect on indicators describing unit costs, profitability, and the financial position of enterprises and economic sectors. Expenditures from the funds are therefore closely watched by management, financial agencies, and Gosbank. Careful use of the funds, whose sizes are determined scientifically, is a prerequisite for an increase in social production and the standard of living of the workers.

REFERENCES

Metodicheskie ukazaniia k razrabotke gosudarstvennykh planov razvitiia narodnogo khoziaistva SSSR. Moscow, 1974.
Trud i zarabotnaiaplata v SSSR: Sb. St., 2nd ed. Moscow, 1974.
Ekonomika truda v promyshlennosti. Moscow, 1970.
Maslova, N. S. Voprosy ekonomicheskoi effektivnosti novoi sistemy material’nogo stimulirovaniia v promyshlennosti SSSR. Moscow, 1971.
Gur’ianov, S. Kh., and L. A. Kostin. Trud i zarabotnaia plata na predpriiatii, 2nd ed. Moscow, 1973.

B. E. PENKOV

References in periodicals archive ?
This book on the wages fund - one of the key theoretical underpinnings of classical economics - and the "reasons" for Mill's ostensible "recantation of it" is only one of the most recent in the genre.
The wages fund idea had a dominant place in Classical thought.
The rationale for industrial democracy, he argues, was subsumed under three broad theories: a theory of workers' bargaining disadvantage vis-a-vis the employer under competitive conditions; a theory of income redistribution through collective bargaining, in place of the wages fund analysis of 19th-century classical economics; and a theory of union legal relations with employers, organized and unorganized workers, and the state in a system of modified capitalism.
He has presented papers on a wide range of topics, comprising Malthus's theory of unemployment, Sismondi's analysis of laissez-faire, Hobson's critique of the marginal productivity theory of distribution, the history of the 'Wages Fund' controversy, early critics of economic rationalism, the history of writings on the distribution of wealth, the origins of the Lorenz Curve and the Gini Coefficient, Malthus's macroeconomic model, and the history and nature of the concept of positional goods, as well as offering short presentations on Keynesian income determination diagrams and Hobson's legacy 150 years after his birth.
The mother-of-two ( now beginning a 12-month jail sentence ( started siphoning cash from the company's wages fund straight into her bank account.
Finally, John Vint argues that McCulloch is the founder of the "rigid" version of the wages fund doctrine, thus meaning that he strove "to protect the idea of a predetermined real wages fund from the notion of wages paid in money" (p.
In recent months I have been involved in constructive discussions with the SNP Government to deliver a Scottish budget that protects services and improves public sector wages funded by fairer taxation.
"Having the first six months wages funded meant that employing a new member of staff didn't have the added financial pressure.
Those still in denial should be left to kick their heels at the palatial homes paid for by Premier League wages funded by fans who have that old but familiar sinking feeling.
Keane has been lured with a multi-million transfer budget and top wages funded by Quinn's eight man consortium.
This non-profit work for a seriously injured worker can be established with the cooperation of the insurance carrier or employer as part of a workers' compensation settlement, where the injured employee's medical care is paid and wages funded for some period of time.
Seccombe sees this as an act of theft: wages funded merely the daily replacement costs of labour-power, not the full generational reproduction costs; the difference was reaped by capitalists as profit.