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wages,payment received by an employee in exchange for labor. It may be in goods or services but is customarily in money. The term in a broad sense refers to what is received in any way for labor, but wages usually refer to payments to workers who are paid by the hour, in contrast to a salary, which implies a more fixed and permanent form of income (e.g., payment by the month rather than by the hour). In economic theory, wages reckoned in money are called nominal wages, as distinguished from real wages, i.e., the amount of goods and services that the money will buy. Real wages depend on the price level, as well as on the nominal or money wages.
In the United States, wages increased fivefold between 1860 and 1960. Adjusted for inflation and expressed in 1982 dollars, the typical weekly wage of a U.S. worker increased from $262 in 1960 to $298 in 1970, but increased foreign competition and slower U.S. economic growth forced weekly wages down to $274 in 1980 and $255 in 1991. In the 1990s, U.S. wages grew very slowly, to $270 in 1998, despite record economic growth. In the United States and elsewhere, a "gender gap" often exists, in which women are paid less than men for comparable positions.
See also minimum wageminimum wage,
lowest wage legally permitted in an industry or in a government or other organization. The goal in establishing minimum wages has been to assure wage earners a standard of living above the lowest permitted by health and decency.
..... Click the link for more information. .
Economic Theories about Wages
Many theories have been advanced to explain the nature of wages. The first of them was the subsistence theory of wages, also called the "iron law of wages," of which David RicardoRicardo, David,
1772–1823, British economist, of Dutch-Jewish parentage. At the age of 20 he entered business as a stockbroker and was so skillful in the management of his affairs that within five years he had amassed a huge fortune.
..... Click the link for more information. was one of the main exponents. The theory maintains that wages cluster around the bare subsistence level of workers. A wage rate much above the subsistence level causes an increase in the number of workers; competition will then lead to a depression of wages back toward the cost of subsistence. Wages that are below subsistence reduce the size of the working population; in that case competition will raise wages, but only up to the subsistence level again.
In the surplus-value theory as propounded by Karl MarxMarx, Karl,
1818–83, German social philosopher, the chief theorist of modern socialism and communism. Early Life
Marx's father, a lawyer, converted from Judaism to Lutheranism in 1824.
..... Click the link for more information. , the value produced by the worker in excess of what is paid in wages is called surplus value. The surplus value, exacted from the worker, constitutes the capitalist's profit. The wage-fund theory is that wages are advanced out of a fixed fund of capital, from which an excess withdrawal, either through legislation or through union pressure, will ultimately reduce the amount available for other workers. Any increase in wages would also have to be taken out of profits, and their reduction would cause a decline in savings, which provide the capital from which the wage fund is derived.
The marginal-productivity theory maintains that employers will only pay a wage that is, at most, equal to the amount of extra value added to the total product by one additional worker. The bargaining theory modifies the marginal-productivity theory by taking into consideration other factors (e.g., laws and social and political changes) that might affect the determination of wage levels and by acknowledging that certain basic assumptions (equal bargaining power of employer and employee, free competition between the two, and mobility of labor) that characterize the marginal-productivity theory do not hold in our present economic system.
See A. Rees and D. P. Jacobs, Real Wages in Manufacturing, 1890–1914 (1961); E. H. P. Brown, A Century of Pay (1968); J. W. Wright, The American Almanac of Jobs and Salaries (serial).
under capitalism, a converted form of value, or price, of a specific commodity—labor power. The use value of this commodity lies in the fact that the labor force, through its functioning, creates value and surplus value, which is appropriated by the capitalist class. The value of the labor force is determined by the labor that is socially necessary for its reproduction, that is, the cost of a specific amount of vital resources needed for the reproduction of manpower, namely, food, clothing, shelter, expenditures on training and the acquisition of skills, and upkeep of the worker’s family. The value of labor power includes (and this is one of its principal distinguishing features in relation to all other commodities) historical and moral elements that are dependent on the level of development of the productive forces in society, the organization of the working class, and the strength of the latter’s resistance to the bourgeoisie. The historical and moral elements of the value of labor power are related to national differences in wages (that is, the level of wages in different capitalist countries), which, in turn, depend on the historical conditions and vital aspirations that characterized the period when the working class, in particular, was formed. The availability of a surplus of working hands during the formation of the working class and the level of intensity of labor are of great importance. Actual differences in the wage levels of workers in capitalist countries are great. Taking the weekly wages of workers in nonagricultural sectors in the USA to be 100 percent, in 1970 in Sweden, wages were 69 percent; the Netherlands, 58; Great Britain, 56; the Federal Republic of Germany, 62; Belgium, 43; France, 37; Italy, 31; and Japan, 40. (These percentages reflect the official exchange rates of currency.)
Political economy before that of K. Marx (including even the classic bourgeois political economists A. Smith and D. Ricardo) did not distinguish labor power from labor itself. Their conception was that wages represented the price of the full labor of the worker. Therefore classical bourgeois political economy could not scientifically validate the origin of surplus value based on the law of value. Marx was the first to disclose the essence of wages. He showed that the worker sells not labor but labor power, that is, his capacity to do labor. By means of economic coercion the capitalist forces the labor power that he has purchased to operate in excess of the time required for reproduction of its value; that is, he forces the worker to create surplus value. Having sold his labor power, the worker should receive compensation equal to or, at least, approximating its value. Otherwise, he is not able to function as a full-fledged worker.
V. I. Lenin, in developing Marxist theory about the value of labor power and taking into account the experience of capitalist development at the end of the 19th century, wrote that “we must not lose sight of the indubitable fact that the development of capitalism inevitable entails a rising level of requirements for the entire population, including the industrial proletariat. . . . This law of increasing requirements has manifested itself with full force in the history of Europe— compare, for example, the French proletariat of the end of the 18th century and of the end of the 19th century, or the British worker of the 1840’s and of today” (Poln. sobr. soch. , 5th ed., vol. 1, p. 101).
Wages, as a monetary expression of the value of a commodity, namely, labor power—that is, the price of this specific commodity—fluctuate around value but rarely equal it. The difference between the value and the price of labor power is a supplemental source of capitalist profit.
A distinction must be made between nominal and real wages. Nominal wages equal the sum of money received by the worker for labor power that has been sold, and real wages equal the quantity of goods and services that the worker can actually buy with his wages.
The basic forms of wages used in capitalist countries are payment by a unit of time and payment by the job or piece. Payment by time, that is, payment that the worker receives for a specific amount of time he has worked (a day, week, etc.), is a converted form that directly expresses the value of labor power (daily, weekly, etc.). Under the piecework system the worker’s wages are dependent upon the number of items he has manufactured during a unit of time; for each item he is compensated according to individual rates. The false impression is created that the worker is selling not labor power, but labor materialized in the product. A Marxist analysis of piecework payment shows that it is just a converted form of payment by time.
The piecework form of wages was profitable to the capitalists for a long time. Under this system workers were motivated to maximally increase labor intensity; and it was not necessary to maintain a large staff of people to supervise them. The stubborn resistance of workers to a revision of rates, the introduction of production line manufacturing, and later the introduction of automated production processes forced the capitalists to switch to payment by time. In the 1960’s in the economically developed countries wage payment by time was predominant. Thus, in 1968, 67-68 percent of the workers in Great Britain were paid by time, and 74 percent in the USA were paid by time (including 83 percent in engineering, approximately 95 percent in the chemical industry, 97 percent in paper, 98 percent in milling, and 99 percent in paint and varnish and in fertilizer production). In the Federal Republic of Germany in 1966, 81 percent of the men and 69 percent of the women were paid by time.
At the turn of the 20th century various work speed-up systems emerged at capitalist enterprises, including the systems of Taylor, then Gilbreth, Gantt, Halsy, Rowan, Emerson, and Bedaux.
After World War II systems of profit sharing, the sliding scale of wages and hours, analytic evaluation of work places, and the evaluation of labor according to services rendered became widespread in capitalist countries. Under the system of profit sharing, the capitalists allocate from the enterprise’s net profit a certain (usually small) share that is distributed among the workers, generally at the end of the year. The conditions placed on profit sharing for workers are an increase in labor productivity, the improvement of production quality, and, if deemed necessary by the owner of the enterprise, agreement to a temporary lengthening of the work day and wage reductions or freezes, and refusal to participate in strikes. A variation of the system of profit sharing is the system publicized by the bourgeoisie of selling small shares to workers through wage accounts.
The introduction of bonus systems and methods of bonus payments “for diligence,” “for individual value as a worker,” “for neatness,” “for industry,” “for correctness,” “for initiative,” and “for cooperation” can be explained by the striving to win over certain strata of the workers and thus weaken their class unity in the struggle against capital. These are the causes of the increasing interest of bourgeois sociologists in studying “human relations,” “labor motivation,” and so forth at capitalist enterprises. During the postwar years, as a result of stubborn struggles, the working class in some economically highly developed countries has achieved some increase in wages. However, the strengthening of capitalist exploitation, inflation, and the rise of prices and the cost of living nullify the increases in wages. Historical experience has confirmed the correctness of the Marxist-Leninist tenet that the workers are able to achieve fundamental improvement in their material, cultural, and social position only as a result of the victory of a revolution, with the transfer of all political power and all instruments and means of production into the hands of the people.
E. L. MANEVICH
Criticism of bourgeois wage theories. Wages are interpreted by bourgeois economists either as the price of labor, as the price of a product of labor, or as the price of labor services. The specific nature of the commodity—labor power—is hidden, and the appropriation of surplus value by the capitalists is concealed.
During the period of premonopoly capitalism, especially in the early stages of its development, bourgeois economists attempted to validate and justify the low level of workers’ wages and to place this wage level in a procrustean bed of some kind of “natural law,” subsequently referred to as an iron law (see IRON LAW OF WAGES). D. Ricardo, for example, considered that the level of wages, given all its fluctuations, should approach the subsistence minimum, defined by the cost of the resources needed for the physical existence of workers and their families. Recognizing, nevertheless, the impact of moral values and popular habits on wage level, Ricardo attempted to surmount to a certain degree the narrow confines of the Malthusian iron law. Concepts later created by vulgar political economy are also based on this law and on Malthusian population theory (see MALTHUSIANISM).
The wages-fund theory, proposed by J. S. Mill, J. McCulloch, and others, proceeds from the assumption that this fund is constant. If the wages of workers are higher than the level that has been determined by the wages fund and the number of workers, then an increase in unemployment is inevitable. An increase in the number of workers leads to a decline in their average wages. Wage raises for some of the workers leads to a reduction of the remaining wages fund and a decline in the wages of the other workers. And, conversely, a reduction of the wages of any group leads to increased employment, since a larger number of workers may then be hired for work. According to this theory an increase in the wages fund through capitalist profits is not possible, because with such an increase capitalists lose interest in production and the accumulation of capital is ended. This supposedly threatens society with ruin.
The residual claimant theory of production (formulated in 1862 by the English economist W. Jevons) views wages as the part of the value of manufactured production accruing from labor that remains after all aspects of production besides labor (rent, capital interest, profit, insurance dues, and taxes) have been paid for. This, as well as other bourgeois wage theories, is based on the so-called Tribunate formula of the vulgar bourgeois economist J.-B. Say, who stated that three aspects of production are the source of incomes for the principal classes of bourgeois society: labor, which creates income; land, which creates rent; and capital, which creates profit.
The theory of marginal productivity was formulated by the English economist A. Marshall and the American J. Clark. According to this theory, the basic factors of production, that is, labor (or labor power) and capital embodied in the means of production, are subject to the law of diminishing productivity. This law states that an increase in the number of workers, with an unchanged mass of capital, leads to a decline in the amount of capital received by each worker and, therefore, to a reduction in the productivity of his labor. The wage level is determined by the so-called marginal productivity of labor, that is, by the wage level of the marginal worker. The marginal worker represents a unit of labor in relation to which there is the least demand. Therefore his remuneration, according to another bourgeois theory—that of marginal utility—determines the wages of all workers. This theory justifies the high level of capitalists’ profits and the low level of workers’ wages.
Many elements from all of these theories (especially that of marginal productivity) have entered into modern bourgeois theories of wages. Among them, theories of “regulated” wages, based on the concepts of the English economist J. M. Keynes, occupy an important position. Keynes links the volume of production and employment to a defined level of wages. An increase in employment, causing a shortage of machinery and equipment, inevitably leads to a decline in the productivity of labor of the marginal worker and hence a reduction of real wages. In the opinion of the Keynesians, one means of facilitating an increase in employment is the reduction of the real wages of workers through inflation. Along with this, contemporary Keynesians recommend holding down the increases in nominal wages, since their increase would cause a reduction in profits for the capitalists and consequently a weakening of the stimulus for investments, thereby causing a drop in production, a decrease in jobs available, and the growth of unemployment. Thus, Keynes’ followers propose that workers should reconcile themselves to the blocking and inflationary depreciation of their wages. Modern bourgeois concepts of wages may be lumped together into two basic groups. The first includes the marginalists, that is, the supporters of the modernized version of the theory of marginal productivity (E. Chamberlin, K. Rothschild). The second group consists of the adherents of various types of collective-bargaining wage theory (F. Pearson, S. Slichter, and J. Dunlop). Contemporary marginalists are attempting to make the “classical” theory of marginal productivity conform to conditions that have evolved during the epoch of imperialism. They state that, given the existence of a monopoly, wages must be lower than the level at which they would be, all other things being equal, under “perfect” competition, in which the prices of commodities (hence the value of a “marginal” product of labor and, consequently, the level of wages) are determined exclusively by the market, that is, by forces not under the control of the individual capitalist. Under conditions of so-called monopoly competition, a firm enjoying a monopoly position, by increasing the volume of production and sales, must inevitably lower prices. This leads to a revaluing of how much each aspect of production contributes toward the creation of new value. Specifically, the wage level must now be determined not by the value of the marginal product of labor but by the amount of the so-called marginal income. The former represents the difference between the sum income generated with each new increase in production volume and the sum income achieved prior to this increase. The amount of this difference is influenced by two opposing factors: the growth of gross income, associated with an increase in the volume of manufactured production, and the decline in price of a unit of production during each new expansion of the volume of production. Therefore, the value of marginal income is less than the value of the marginal product being turned out under conditions of pure competition. In the opinion of the marginalists, the level of wages should be less than a marginal income or at most equal to it. If the workers force the monopolist to raise wages above the level defined as marginal income, the monopolist will reduce production and fire some of the workers. The workers will rush to the sectors where competition exists and will put pressure on the labor market, thereby lowering the wages of employed workers. The facts of capitalist reality demonstrate that monopolies, even in broadening production, do not lower prices but raise them. Thus they increase their own profits.
The theoretical sources of contemporary theories of collective-bargaining regulation of wages date back to the so-called social theory of wages proposed in the early 20th century by the Russian bourgeois economist M. I. Tugan-Baranovskii. According to this theory, the level of wages in capitalist society depends on two factors: the productivity of social labor, which determines the amount of the aggregate product, and the social strength of the working class, which determines the share of the social product that comes under workers’ control. The thesis of the dependence of wages on labor productivity repeats the position of the American bourgeois economist H. Carey, which he proposed in the first half of the 19th century and which was scathingly criticized by Marx. In reality, the growth of labor productivity under conditions of capitalism leads not to an increase of wages but to the reduction of the value of labor power, thereby facilitating an increase of surplus value. Directly linking wage increases with increases in labor productivity, bourgeois economists and sociologists are striving to construct a theoretical basis for the concepts of class cooperation that they preach. The “social” wage theory, despite its declared avowal of the necessity of class struggle, actually strengthens the position of the bourgeoisie, since it shifts the center of gravity of the class struggle from the sphere of ownership of the means of production to that of the distribution of the newly created product and limits the scope of the struggle to narrow economic problems. This is precisely why the fundamental tenets of the social wage theory were picked up by the ideologists of reformism in the working-class movement.
Contemporary theories of collective-bargaining regulation of wages proceed from the fact that there are upper and lower limits of wage rates for workers in the same field with equal qualifications who are carrying out identical tasks. The actual level of wage rates within these limits depends on the demand of employers for labor power and the demand of workers for jobs. The size and scale of tariff rates result from negotiations and agreements between capitalists and workers and depend on the so-called bargaining strength of each side. Proponents of the collective-bargaining theory of wages pay very close attention to the criteria, or factors, by which capitalists should be guided in the course of their cqllective negotiations with workers. There are six such criteria: the level of wages in other sectors and companies in a particular region or in other regions; the cost-of-living index; the budgets of working-class families; labor productivity; the capacity of a company to pay certain wages; and the economic situation in the country. Some of the proponents of this theory are attempting to determine the upper and lower limits of wages on the basis of the concept of a “bilateral” monopoly, according to which capitalist companies and trade unions alike are declared to be monopolists in the labor market. If the capitalist is a monopolist, then the wage level for a given group of workers (generally unorganized) will be lower than under conditions of free competition; if the trade union is a monopolist, then the wage level will be higher than under conditions of free competition. The concept of a trade union monopoly is designed to shift responsibility for the low level of wages and unemployment among unorganized workers to the trade unions and to set one part of the proletariat against the other.
The ruling circles of capitalist countries actively promote the concept of “the inflationary spiral of wages and prices” to validate and justify a policy of freezing wages. According to this theory, wage raises increase production expenses and lead to price increases. This forces workers to demand a new wage increase, which again causes a rise in prices. The gains that workers in a certain sector win through wage increases, they and workers of other sectors and categories lose as purchasers of consumer products. The inflationary spiral theory places responsibility for reducing the workers’ standard of living on the working class. Referring to the inflationary spiral, the bourgeoisie attempts to set other strata of the working population against the working class and to justify the inflation of prices by capitalist monopolies. Marxism-Leninism has demonstrated that in reality wage increases must influence not the level of prices but the level of capitalist profits.
Bourgeois wage theories have evolved from the attempts of the classical school of bourgeois political economy to reveal the essence of wages and the laws of their flow and have become vulgarizing concepts designed to justify and conceal capitalist exploitation. In sum, bourgeois science has been directly subordinated to the antiworker policies of imperialist states and to the practical needs of monopolies.
M. G. MOSHENSKII
Socialism. Wages under socialism are part of the national income, representing in monetary form the value of a necessary product manufactured by workers in the sphere of material production. Wages are distributed in a planned fashion by the state, in accordance with the quantity and quality of labor by workers, in order to satisfy their personal material and cultural needs. Wages are also used to pay for the labor of workers in the nonproduction sphere. Part of the value of the surplus product created in the sphere of material production serves as the source of wages.
The Great October Socialist Revolution put an end to political and economic discrimination against workers. The principle of equal pay for equal work regardless of the sex, race, nationality, or age of citizens was declared and established.
The economic law of distribution according to labor is basic to the organization of wages under socialism. In order to ensure equal pay for equal work, it takes into account the distinctive features of various types of labor, the complexity and conditions of labor (skilled and unskilled, mental and physical, heavy and light, mechanized and hand), and the effectiveness of labor. The socialist principle of payment according to labor stimulates the personal material incentive of the worker. As for the level of wages, it is determined in relation to the task of providing blue-collar and white-collar workers with vital resources in the volume that is required for the reproduction of the labor force, for the consistent development of the labor force through continuous increases in material prosperity, and for the satisfaction of the growing needs of the worker and his family. The level of wages results from the universal law of compensation for manpower expenditures. In order to provide for the reproduction of the labor force, society defines the subsistence minimum of working people (considering the level of development of the productive forces, as well as available resources). Under socialism the subsistence minimum shows a tendency for constant growth. It is paid for not only through wages (of blue-collar and white-collar workers) and incomes from collective production (of kolkhoz farmers) but also through other incomes from public consumption funds. In 1971 the real incomes of blue-collar and white-collar workers were three times greater per worker than those received in 1940; the real incomes of peasants increased 4.8 times over the same period. Kolkhoz farmers and some workers, especially in rural areas, receive incomes from private agricultural plots as well.
Wage differentiation, like labor payment itself and its level and its proportions, changes according to the socioeconomic, technical-economic, and political factors of each period. Wage differentiation is influenced by the degree of development of productive forces, the attained level of labor productivity, the cultural-technical level of the workers, and other factors.
In the USSR and other socialist countries a gradual reduction of the difference in remuneration of labor between different groups of workers is taking place alongside the development of production forces, the growth of national income, and advances in the cultural-technical level of the workers. From 1957 to 1968 the minimum wage in the USSR doubled, and the average wage increased by 53 percent. As of January 1968 the minimum monthly salary of blue-collar and white-collar workers in all sectors of the economy was increased to 60 rubles. Moreover, income tax rates for blue-collar and white-collar workers receiving from 61 to 80 rubles per month have been reduced on the average by 25 percent. The average monthly monetary wage of blue-collar and white-collar workers in the economy equaled 122 rubles in 1970, and adding to this figure payments and benefits from public consumption funds, these workers averaged 164.5 rubles.
The directives of the Twenty-fourth Congress of the CPSU on the 1971-75 five-year plan for the development of the economy of the USSR project the following: raising the wages of blue-collar and white-collar workers by an average of 20-22 percent; increasing the minimum wage of blue-collar and white-collar workers to 70 rubles per month and simultaneously increasing the tariff rates and the official salaries of average-income workers in all regions of the country and in all sectors of the economy; and improving the wage ratios in different sectors of the economy and of different categories of workers, taking into consideration their working conditions and their skills. Increases in minimum wages, rates, and salaries of average-income workers in sectors of material production are implemented gradually by regions, beginning with the northern and eastern regions of the country. It is planned that wage increases in sectors of the nonproduction sphere will first be carried out for doctors, teachers, and the teachers in preschool childrens’ institutions and then for the remaining workers in education, health, and other sectors. Additional official rates of pay to blue-collar and white-collar workers who work at night are being increased.
The organization of wages is determined by three interrelated and interdependent elements: the tariff system, labor rate-fixing, and forms of payment.
The tariff system serves as the basis for workers’ wages. It is set up as a function of labor conditions, workers’ skills, forms of payment, and the importance of a given sector in the economy. The tariff system includes a tariff rate, which defines the compensation for labor per hour or per day; a tariff scale, which demonstrates in wage payments the relationship between various categories of jobs and workers’ skills; and a tariffskill reference book, with which workers and jobs are assigned to various categories of the tariff scale.
The proper organization of wages and labor planning at enterprises depends on the scientific formulation of labor rate-fixing. Two basic, complementary methods of labor rate-fixing have evolved in Soviet industry: analytical-computational and observational.
Two forms of wages are used in socialist industry— piecework and time-rate. These, in turn, include several different systems. The most widespread in Soviet industry is the individual direct piecework system, which pays for workers’ labor subject to rate-fixing and accounting. A worker’s labor is remunerated at the same rate for each manufactured product unit. The rate that constitutes the basis of the individual direct piecework system is determined by dividing the tariff rate of the pieceworker by an established output standard or, if a time rate is established for a given task, by multiplying the tariff rate of the pieceworker by the time rate. There are other wage systems as well: bonus piecework, indirect piecework, progressive piecework, brigade, and contract. The last is most widespread in the construction industry.
A significant proportion of workers in industry, especially after the reorganization of wages that was carried out from 1956 to 1965, are paid time-rate wages. Labor is remunerated on the basis of the actual time spent on the work and the skill of the worker. This form of labor payment affords a certain opportunity to take into account the quality of the worker’s labor (as well as his skill and his working conditions), but it does not sufficiently provide a direct link between the end results of a given worker’s labor and his wages. Therefore the bonus time-rate system has become widespread in industry. Ninety percent of the time-rate workers participate in this system. The size of their incomes depends on the quantitative and qualitative results of their labor; this strengthens the personal material incentives for workers. In the early 1970’s bonus time-rate systems were used to save time; to reduce or completely eliminate the idling of equipment and the idleness of workers; to operate machines, units, and shops without accidents; and to economize on stocks. Collective systems of labor payment (collective piecework and collective time-rate) are widely used, mainly on production and conveyer lines, in uninterrupted apparatus processes, and in assembly and installation operations for large industrial units—in other words, wherever the interchanging of workers is required during the labor process and wherever their basic responsibilities consist of observing and supervising the production process.
In the future, based on the development of complex mechanization and automation of production, significant increases in workers’ skills, and reduction of the actual differentiation in wages, the use of piecework systems will gradually decrease. Collective time-rate and bonus time-rate systems for remunerating the labor of workers will become increasingly widespread.
Engineering and technical staff workers and employees are paid according to established monthly salaries. The planning of these salaries is effected in a centralized fashion and is based on the same principles by which tariff rates for workers are planned. The state establishes salaries that are differentiated according to the importance of a certain economic sector, enterprise, or shop; working conditions; the volume of work and the complexity of the production process at a given enterprise, shop, or section; the degree of responsibility of a position; and the worker’s training, education, and seniority. Minimum and maximum salaries are stipulated for each job; this provides another opportunity to take into account the personal qualities of individual workers and motivates them to improve their performance and increase their skills. The bonus system serves as a material incentive for managers and engineering-technical workers.
In conjunction with decisions of the September (1965) Plenum of the Central Committee of the CPSU, measures have been implemented to increase the material incentives of workers to improve enterprise operation.
Wages are a real economic lever in the hands of the socialist state, by means of which workers and production collectives are motivated to increase production, raise its quality, and heighten labor productivity and the effectiveness of socialist production. As before, compensation for labor will be the basic means of increasing the real incomes of the population and the level of the material prosperity of the workers. It is projected that during the ninth five-year plan three-quarters of the overall growth in real incomes of the population will be provided through increases in payments for labor.
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E. L. MANEVICH