REGINAL VARIATIONS OF LABOR PRODUCTIVITY IN THE USSR FUEL AND METALLURGICAL INDUSTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600350148-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: August 19, 2011
• Sequence Number: 148
• Publication Date: October 6, 1950
• Content Type: REPORT

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COUNTRY
SUBJECT
HOW
PUBLISHED
WHERE
PUBLISHED'
CLASSIFICATION ' CONFIDENTLI,I, CONEiDEN~~Q~
CENTRRL INTELLIGENCE AGENCY REPORT
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS CD N0.
Economic - Labor productivity
Monthly periodical
? Moscow
DATE
PUBLISHED Jun 190
Russian
TXI{ DOCUYtNT COMTAIMI IN IO{NATION AII[C11 N{ TNt NATIONAL 0l{iU[
01 TM[ UNITtD {TAttt NITNIN TN[ YGNINO Q/ {7110NM[ ACT {0
Y. {. C.. 7i AMD 33, At AY[NO[0. 1T{ ttANtNlftiON ON TNl N111[1A710N
0/ Itt CONT[Ntt IN AFT NAN N[N TO AN UNAUINO{I3[0 It1tON It I10?
NI{ITID {T LA-. 1{-t000CTI0N 01 TNI{ -ONN 1{ -tOMi{1710.
SOURCE VoErosy Ekonomiki, No 6~ 1;50.
DATE OF
INFORMATION
DATE DIST. ~ E1c~ 19rj0
SUPPLEMENT TO
REPORT N0.
THIS IS UNEVALUATED INFORMATION .
REGIONAL VARIATIONS OF LABOR PR~DUCTIVIT7C IN THE USSR
FUEL AND METALLURGICAL INDUSTRIES.
There is no direct method of calculating labor productivity by means of
quantitative measurement of dissimilar production. All existing methods (gross~?
production, net production, and the index method) reflect, not the level of
labor productivity, but rrl~er its dynamics; and al]. these methods are far Yrom
being perfect. However, the level of labor productivity can be measured by::
(1) the indtviduai productivity of workers in branches of industry,engaged?in
similar production; and (2) production expenditures and especially production
cost which is the most important part of production expenditures.
Let ua consider in ~ regicnal cross section the productivity of workers
ind production costs of_the most important branches of industry engaged in r
similar production. We shall~conaider the fuel and metallurgical lndustries,
the production cost of which exercises a deciatve influence on the production
coat in industry as a whole.
-1- CONEI~Et~T4Al.
CLASSIFICATION ?CONFIDEPTLAL
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'Be?ore the war, lslior productivity in the new coal basins of the Bastern
USSR.was from +0 to 83 percent higher than the average for the USSR coal indus-
try and from 1,5 to 2 times higher than in the'Donets.Basin. Higher produc-
tivity~of labor in the east~trn regions determines. the lower production coat of
coal in these regions . In 1].91+0 the coat of coal' extraction in the eastern
.regions constituted from 58 to 71 percent of the average.producticn.cost of
coal in the Soviet Union and was substantially lower than in the Donets Dasin..
In the postwar :ariod the difference in the level of labor productivity
of the new and old coal fields o~ the DBBR became even more pronounced. The
production cost of the Donets cot:1'is considerab]y higher than that of the
eastern regions, in spite of the Pact that in 1940 the Council of Ministers
USutt, taking into sccount the severe working conditdoas in the Urals, Siberia,
and the Far East, increased by 20 percent the wages of workers and engineering-
technical personnel engaged in the coal, prp. petroleum, and metallurgical
industries, sad in construction, loading and unloading work is those regions.
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COHFIO~~TIAL
One factor influencing the difference in labor productivity and production
cost of the old and new coal fields is the technological factor. Most of the
eastern coal fields were started during the Soviet period and are being exploited
with up-to-date machinery, while in the Donets Basin the application of modern
machinery is limited by the character of mines inherited from the prerevolution-
ary period.
Another factor influencing labor productivity and production cost in coal
mining is the way in which coal seams occur in the various regions. In most of
the eastern coal fields the coal seams occur close to the surface. Thus, the
depth of occurrence. of Kuznetsk coal mined during the prewar period fluctuated
'between 100 and 200 meters and averaged 150 meters. Karaganda coal is mined at
a depth of 65-loo :asters. Coal of the Cheremkhovo Basin, which is the principal
fuel base of Eastern Siberia, is mined almost exclusively by the open pit method
since the coal, as a rule, occurs at a depth of 25 meters. In the Donets Basin,
on the other hand, coal was mined during the prewar period at a depth of 200 to
800 ,meters, averaging 1450 meters. The occurrence of coal at shallow depths in
the eastern deposits accounts for their lower production cost, since expenditures
on coal transport, maintenance of surface structures, and ventilation are lower.
Coal mining in eastern deposits is also made easier by the great thickness
of the coal seams end heavy concentration of coal in small areas. Thus, the
thickness of coal seams in the Kuznetsk Basin attains 12 to 1~F meters and aver-
ages 4 meters, while the highest thickness of the Donets coal seams is only 1.5-2
meters and averages 0.95 meter.. The average thickness of seams in the Kara
Banda Basin is 2.31 meters. The coal-bearing coefficient in the Karaganda and
Kuznetsk coal basins is also considerably higher than in the Donets Basin. In
the Kuznetsk Basin that coefficient is as high as 7 percent and sometimes even
12 percent; and in the Karaganda Basin it averages 4.65 percent, as compared to
an average of 0.64-0.68 percnet in the Donets Basin.
Furthermore, the eastern coal basins are characterized by the presence>. of
abruptly-falling layers the mining of which requires a lesser expenditure of
labor.
When all these factors are taken into account, the rel8tive labor produc-
tivity in the principal coal basins of the USSR can be represented in the follow-
ing table:
Basins
Iabor Productivity
Donets
100,0
Kuznetsk
120.0
Karaganda
111.1+
ChPremkhovo
180.0
Kizel
114,3
In'arriving at these figures, the thickness of the seams in the eastern
coal deposits have not been taken fully. into account. Recent experiments have
shown that it is possible to mine thick seams without casing ~zrlsl.adochnyye
raboty). Under these conditions, productivity of labor in the Kuznetsk and
Karaganda Basins should be even higher than is indicated in the table.
~An important factor in estimating the economic advantages of the new
coal regions is the value of capital investment per ton of coal. In the past
capital investments in the eastern coal regions were .higher than in the coal
mines alrea9y in operation. In the east these investments included not on]y_
expenditures for the construction of mines, but also outlay on housing, trans-
port, municipal construction, and cultural.eatabliahments. Furthermore, the
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mining of thick seams in the Kuznetsk basin was carried on by means of casing
wbrk, which increased capital investment by about 30 percent on the average.
However, recent technolcgical advances make it possible now to dispense with
casing, and capital investment per ton of coal in the eastern coal fields will
be considerably lower than in the Donets Basin. All available data relating
to capital investment, productivity of labor, and coat of production point to
the conclusion that, of all the coal regions in the USSR, those in the east
have the greatest advantages from the point of view of labor economy and higher
productivity.
Into the total cost of coal enters not only coat of mining, but also cost
of delivery to the consumer. When considered from this angle, the economic
advantages of the eastern coal regions will be seen to be even greater than
advantages accruing from the higher level of labor productivity and lower pro-
duction costs. In the.eastern regions the development of industry, and of the
coal industry in particular, brings the producer closer to the consumer and
reduces coal transportation expenditures. Computations made before the war
established that economy in railroad transport reeulting from the development
of local .coal fields amounted in 1937 to 15.75 billion ton-kilometers, which in
monetary terms amounted to 300 million rubles.
Petroleum ?
The economic consequences of the development of petroleum industry in the
eastern regions of the USSR is no less notable. Delivery of petroleum and petro-
leum products from the Urals and the Volga has resulted in enormous transporta-
tion savings.
The central regions of the USSR are among the largest consumers of the pe?-
t;`Ple17m which is ahippa{?i fi?pm Ay~j?gyd..hon n.,d th@ Ural. Th2 CGwy?arovivo tVDt
to the consumer of petroleum shipped in 1941 from the two areas is illustrated
in the following table (in rubles):
Route
Production Cost
per Ton
Tranepor=-
t&tion Coat
per Ton
Cost to
Consumer
Baku-Moscow
16.6
76.0
92.6
Groznyy-Moscow
25.8
58.0
83.8
Chernikovk~.-Moscow
24.1
46.0
70.1
Syzra$-Moscow
39.7
27.0
66.7
Grozgyy-Gor'kiy
25.8
58,0
g3,g
Chernikovke-Gor'kiy*
24.1
38.0
62.1
?~Chernikovka is the shipping point for the Ishimbay petroleum.
The coat of Baku petroleum in Moscow is 92.6 rubles per ton. If Baku pe-
troleum is shipped by water to Astrakhan' and Yaroslavl' and them by rail to
Moscow, the cost per ton is 81.2 rub7.es; when shipped by water to Astrakan' and
then by rail to Moscow, the cost per ton of Baku petroleum is 78.9 rubles.
Ferrous Metallurgy
Before the revolution, Russia's principal metallurgical base was i.n the
Ukraine. The development of ferrous metallurgy in the eastern regions of the
USSR was attended by a number of difficulties arising from conditions peculiar
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to those regions. The distance between the coal and iron ore deposits in the
east is considerably greater than in the Ukraine. Thus, the Kuznetsk coal
basin is about 2,300 kilometers removed from the Magnitogorsk iron ore deposits,
while in the Ukraine the aistance between the coal and iron ore deposits aver-
ages 500-600 kilometers. However, in spite of this disadvantage the cost of
metal produced at the Magnitogorsk, Kuznetsk,, and Novo-Tagil' plants is lower,
and the productivity of labor higher than in the Ukrainian plants, as shown in
the following tablea? -
Name of Plant
Labor Productivity Cost of Pig Iron
Magnitogorsk Plant
100.0
100.0
100.0 100.0
Aovo-Tagil!_Plant
-
81.0
- 136.8
West Siberia
Kuznetsk Plant
84.9
89.8
125.2 104.0
Ukraine
Krivoy Rog Plant
56.7
-
160.7
Azovstal' Plant
46.6
36.8
159.8
Plant imeni Kirov
69.9"
42.2
158.9
av
170.1
Plant imeni Dzerzhinekiy
25.3
25.5
152.1
Plant imeni Petrovskiy
25.1
20.3
156.7
The Table shows that both in the prewar and postwar periods the productivity
of labor in the new plants constructed.during the Soviet period greatly exceeded
that of the Ukrainian plants, and that the discrepancy between 7-abor productivity
and production coats is the Ukrainian plants became even xider than that in the
eastern plants, in the postwar years.
Tae higher productivity of labor in the eastern metallurgical plants, as
compared with those in the Ukraine, is to be explained by the?higher technolog-
ical level. The Magnitogorsk plant has the lowest production costs. This is
due pri.msrily to the exceptionally low coat of the iron ore which the plant is
using. The ore of tb~ Magnitogorsk deposit occurs in thick seams and is mined
by the open pit method. Magnitogorsk ore is about 3 times as cheap as the Krivoy
Rog ore; while the agglomerate cf the Magnitogorsk ore, which the Magnitogorsk
plant is utilizing principally at present, is about 2.5 times sa cheap as the
Krivoy Rog agglomerate.
The cost of coke used at the Magnitogorsk plant is also cheaper than the
Ukrainian coke. To be sure, transportation charges for shipping Kuznetsk and
Karaganda coal to Magnitogorsk are relatively high, and'in 1940 they amounted
to 25 rubles per quantity of coal required for the production of one ton of pig
iron. The same charges for delivery of coal to the Dnepr and Krivby Rog plants
amounted to 5-7 rubles, and in the case of the Ruznetak plant imeni Stalin and
the Donbass metallurgical plants which aro located close to coal deposits, coal
transportation charges were only 2-3 'rubles, However, the higher transportation
charges for the Kuznetsk ana Karaganda coals are compensated for by their laver
production cost, which in turn lowers the cost of Kuznetsk and Karaganda coke.
~QMFI~~~~'IA~
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Furthermore, Kuznetsk coal is of hi@h quality and has a lower s?lfur content than
the Donets coal; hence, the quality of Kuznetsk coke is also higher and its ex-
penditure per ton of steel is lower in the eastern metallurgical plants than in
the Ukraine.
High-grade ore and coke require smaller amounts of flux_ than do low-grade
ore and coke. Furthermore, Magnitogorsk has the lowest production cost of lime-
stone in the Soviet Union.
Savings in the cost of are, coke, and fluxes, together with the smaller
quantities required, more tbAn compensate for the higher transportation charges.
incidental to she shipment of coal to the Magnitogorsk plant. Raw material ex-
penditure per ton of pig iron at Matnitogorsk is 1.5 times lower than in Ukrain-
ian plants. Furthermore, owing to superior tecrmology, large-scale units, and
high labor productivity, the cost of pig iron reduction at the.Magnitorsk plant
is ronsi?~rably lower than in the Ukrainian plants, Even in the new metallur-
gical plants r_~onstructe3 in the Ukraine during the Soviet period, the cost of
pig-iron reduction is almost twice as high as in the eastern plants.?
The cost of pig iron at the Kuznetsk plant -- another metallurgical giant
of the Eastern USSR -- is higher than at the Magnitogorsk plant, but is lower
t~'.-an in the Ukrainian plants. This is to be explained by the following circum-
stances. The smelting of one ton of pig iron requires more iron ore than coal
(approximately 1.1-1.2 tons of coal but not less than 2 tone of ore). Therefore,
all other things being equal, traasportation charges for shipping iron ore to
a metallurgical plant will always be higher than for shipping coal. Before the
war, the Kuznetsk plant used Magnitogorsk iron ore almost exclusiveljr, and in
1940, far example, transportation costs per quantity of iron ore needed to pro-
duce one ton of pig iron amounted to 65 rubles. On the other hand, transpor-
tatjon casts of Kuznetsk coal needed to produce one ton of pig iron at the Mag-
nitogorsk plant was only 25 rubies. ?ine iugh shipping costa of iron ors mde
the Kuznetsk mixture more expensive than that of the Ukrainian plants.
At present, however, the Kuznetsk plant is using iron ore mined locally
at the Gornaya Shoriya deposits. But the cost of mining here is relatively
high, on account of the emallnese of the deposits and the unfavorable occurrence
of the ore. Furthermore,'?the Gornaya Shoriya ores, with the exception of those
mined at the Tashtagol'sk deposit, require concentration. Therefore, the cost
of the mixture 'at the Kuznetsk plant is even now relatively high, although the
local ore'and its agglomerate are less ,expensive ths~ t'': ore shipped from Mag-
nitogorsk. The high.cost of ore, however, is more than compensated for by the
low cost of Kuznetsk coal. Thus, in 1940 the price per ton of Kuznetsk co!:e.
amounted tar 47.8 rubles, while the Donots coke used in the Donbass plants cost
67 rubles and in the Dnepr plants 76.9 rubles. Similar price relationships pre-
vail at prec~ent. The high quality and low Goat of the Kuznetsk coke, together
with the low cost of 'pig iron reduction, result iu a lower coat of pig iron at
the Kuznetsk plant than at plants in the Ukraine.
The coat of steel is simil.ss]y subject to. the operation of the above-
mentianed factors. The cost of steel is lowest at Magnitogorsk and Kuznetsk
plants. 1n the Ukrainian plants the cost of steel is~higher, although not
to the same extent as pig iron. This is explained by the larger proportion of
iron and steel scrap used in the Ukrainian open-hearth furnaces, as compared
with the ee.stern plants, and the fact that the price of scrap is lower than
that of pig iron smelted in Ukrainian plants.
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corr~marrrznz.
^
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