Income inequality in the urban population of Russia during the NEP period: did the trend towards "equalization" prevail?

Borodkin, Leonid Iosifovich
D.Sc. in History, Professor, Head of Department of Historical Informatics & the Center for Economic History (CEH) at the Lomonosov Moscow State University Faculty of History, a Corresponding Member, the Russian Academy of Sciences, Co-chair of the Russian Academy of Sciences Scientific Council on Issues of Russian and World Economic History, Moscow, Russia

Wage regulation of workers and employees during the NEP years was one of the priorities in Soviet social policy. The remuneration of labor at state-owned enterprises was regulated by the state, which was supposed, on the one hand, to implement new principles social policy (a course towards equalizing wages), and on the other hand, to ensure the efficiency of labor. The main tools for regulating wages were the tariff scale and the terms of collective agreements. The paper presents the results of statistical analysis of data on the dynamics of the wage gaps for various categories of urban population in the 1920s, and identifies the corresponding trends. It is shown that consistent equalization (leveling) of wages could not be achieved, despite the policy of the trade unions. The attitude of workers to this policy is analyzed on the basis of declassified materials from a multi-volume publication of archival documents - information reviews and summaries of the OGPU. The most characteristic were the conflict situations generated by the course of equalizing wages, which meant a decrease in labor motivation for skilled workers and caused their dissatisfaction.
This situation changed dramatically during the years of the first five-year plan, when wage differentiation increased abruptly.
And what was the situation in the agrarian sector of the NEP economy? A simulation model based on statistical data on the social mobility of peasant households in these years demonstrated that differentiation did not deepen in rural society either. The model we built demonstrated that when considering an alternative historical development option (“continuation of the NEP after 1929 (the Great Break”), the expected polarization of rural society would not have occurred.

Keywords: measurement of inequality, wage differentiation, statistical data, time series trend, NEP, trade unions, regulation of wages, labor incentives, information department of the OGPU