Workplace Relations and Conflict

Against the Current, No. 21, July/August 1989

Johanna Brenner interviews Gary Ruchwarger

Johanna Brenner: Is the incentive system controversial or do workers accept a highly differentiated wage system that pays according to how well people work rather than according to their family needs?

Guy Ruchwarger:-Yes, I would say that there is some controversy. First of all, it’s always been true that the less agile, slower workers definitely have some resentment about the norms when they can’t meet them. When I did interviews, most people were meeting or surpassing them, so most people supported them. So, a norm is controversial first of all among the slower workers.

Then, more and more, especially in the women’s assemblies I’ve attended, people are critical of the incentive system for not taking into account the different individual circumstances of a family. For example, in the last incentive system, the lower-paid single mothers who make the 300 percent bonus get eight or nine items for free, in effect, in the state-run store for themselves and four dependents.

When that was announced, a number of people criticized it publicly in the meetings and privately after the meetings. A woman would say, “What about me? I have six, seven, eight or nine dependents.” This is especially true of the single mothers who don’t have another adult bringing in income into the home.

]B: You mentioned a consultative council meeting where the director suggested the idea of incentives in kind instead of in wages, since people weren’t able to buy anything with their wages. Could you describe how these sorts of decisions get made at level of the firm?

GR: That decision was made in a short interchange. There had been a consensus reached during a previous week that quality standards had to be raised and that people should be paid extra for meeting quality standards. The consultative council began to discuss how they should frame the new incentive system.

One union guy came prepared. A few weeks earlier, Daniel Ortega had announced that wages, and incentives as well, would now be tied to the profitability of enterprises. So at this meeting, some enterprises were already beginning to work out their wage/incentives scheme, and the examples that the union representative was giving were cases where management was allotting certain wages and bonuses in the form of cash payment.

The director said, “Well, since prices of these basic goods in the commissary are now so high, and the complementary goods are out of reach of much of the workforce, why don’t we figure out what their wage would be if they surpassed the norms in quantity and quality, and then pay the employees the incentives in the form of goods.” There’s tremendous give and take. The good thing is that there are structures in which the union has a high degree of participation.

]B: You seem to describe decisions at the level of the firm as really being made through a bargaining process between management and unions. But does the union do better in its bargaining on state farms?

GR: Definitely. If we look at the results, the basic terms of negotiation – they call them collective agreements, what we would call collective bargaining agreements – there are very few basic provisions that are violated by state management. Although there have been enough violations to be a significant occurrence.

But in the private sector, I know many cases where the minimum wage won’t even be paid to people on the lower scale, where the food is of terrible quality in the canteens, or where they’re not given food at all. These are basic elements of the social wage or the monetary wage that are violated. There are very authoritarian relations between management and supervisors.

So, there are a lot of reasons why u ions in the state sector are stronger. First, management at least has to give the appearance of being concerned about basic worker demands, or it can really be subjected to pressure by the union.

Second, the more educated, more politically professional cadres of the union spend a disproportionate amount of their time aiding and advising union leadership in individual state enterprises. The secretary for Region One spends most of his time at these seven or eight state enterprises in the region. Whenever he can he goes to the consultative council meetings at the state farms. He was at the last two meetings I went to.

He plays a very significant role. He has a more forceful personality than anybody there, including the directors. He’s often mediating disputes between management and diverse interests.

]B: You say that if management didn’t give at last the appearance of consulting with workers, it would bring trouble. What can the workers do; how do they bring pressure?

GR: The previous director of the state farm had pushed out before I even arrived. Many managers, unfortunately, are just transferred to other enterprises. The problem of the shortage of skilled cadres in the Third World is incredible. There are a number of cases of the director being forced out by worker pressure in state enterprises and industry.

The managers have to give the appearance of being concerned about workers’ needs because they are being watched by both the party and the government. They have to report on aspect of their administration. Workers’ conditions, wages and social benefits are a very important part of the report They also have to speak in front of members of union locals, intermediate-level meetings called extended council meetings, production-council meetings and assemblies, a couple of times a year.

]B: So their pressure ultimately is more political than traditional organizing activities like slowdowns or strikes?

CR: Well, even during the ban on strikes there were many, many wildcat strikes in Nicaragua by pro-Sandinista unions in the CST [Sandinista Workers’ Federation] and ATC [Rural Workers’ Association]. And they usually won all their demands. They weren’t publicized in the country, although you know about them when you’re in Nicaragua. So, as an ultimate weapon, they will use slowdowns, strikes – the more traditional tactics.

When delegations came to Nicaragua during the ban on strikes, Sandinista union people would say, “We don’t need to strike because we’ve overthrown capitalism, at least in the state sector. We have such good relations with management that we can settle things sitting down, talking about it.” That’s true in some cases. In many cases, it’s nonsense.

But on the state farm where I observed a number of union-management meetings, I would say it’s not nonsense. So much intense negotiation and sometimes fights go on in these meetings that it really is a legitimate forum for workers to make known their displeasure or to press for changes in policy. At least on this state farm, I’ve seen them win enough of their demands that I can see why they wouldn’t think of striking unless the situation was really intolerable.

Of course, I’ve heard about and read of situations in which conditions were really bad and workers have not gone on strike because of pressure from higher bodies in the union. But in a situation where it gets really intolerable, there have been strikes.

]B: Turning to health and safety issues, the Ministry of Labor didn’t seem to care that these people are getting brown lung.

GR: That’s typical. Generally speaking, the Ministry doesn’t have a good record. It has a lot of objective constraints. I’ve had some interesting conversations with an American who’s been in Nicaragua a long time. He’s an expert in pesticide poisoning of cotton workers. One of the problems with the Ministry of Labor is that it’s tremendously understaffed. They have very few experts in health and safety issues.

Another problem is that because of the war and the backwardness of the economy, raising productivity is such an important issue that it counters health and safety. Often, the central administration will close its eyes to health and safety issues in order to raise productivity.

]B: I was struck by how highly centralized decision-making is. You said that when management wanted to reorganize work so that people weren’t exposed to tobacco dust for eight hours a day the Ministry of Labor had to approve. When they were turned down, they got around the directive. Is that typical?

GR: Yes. One of the interesting things about the atmosphere at the consultative council meetings was the cynicism about the Ministry of Labor on the part of both workers and management. “How can we do things that will benefit all of us without the Ministry of Labor knowing about it or canceling our decision?” I was quite impressed by the devious strategies that both labor and management came up with to circumvent decisions from the central administration.

Since June, as the reforms deepen and the state is interfering less, exercising a lot less administrative control over nitty-gritty issues, it’s becoming really interesting. In a way, I’m arguing that as the economic situation gets worse in Nicaragua, in some key areas workers are going to have more influence in decision-making.

They’re going to have more freedom to negotiate, because by and large wages were administratively determined. Within narrow parameters, they bargained over norms and classifications. But now, in production enterprises in both the state and private sector, local union leaders have to hammer out with managers and owners things that they didn’t have to before, because the state did it.

In August 1988 the head of the ATC, who is also a top Sandinista, criticized the government for not setting a national standard for rural workers’ wages. It was clear that he meant that the private sector was going to get away with murder now that it’s telling every employer that they can hammer out agreements based on the financial situation of the individual enterprise.

But the managers have to share all information. I think that they doctor it, and they rely on the workers’ ignorance not to examine it closely. On state farms none of the union leaders can do basic math. You could give them all of the accurate information and they would not be able to tell you, for example, what percentage of costs is going to wages.

Right before I left, I found a document that showed that these state farms only spent 10 percent-12 percent of their total costs this past year on wages and social benefits. They had it in black and white. I just did a simple division to calculate the percentage.

Then I ran to the ATC secretary of the organization for the region. He got upset. He said, “I told Julian to get all this material and study it.” I said, “Alberto, Julian’s still learning how to divide and multiply. He wouldn’t have been able to figure out this stuff.” He looked at me and said, “You’re right.”

I really get upset at leftists around the world who say, “How come there isn’t workers’ self-management in Nicaragua?” They forget all of these obstacles, objective obstacles. If you can’t do basic math, how are you going to participate in making a budget, figuring out the economic situation of an enterprise? Also, workers must often confront managers who don’t want them to have that participation.

]B: You were saying they have these consultative council meetings frequently to discuss various issues and problems. How ultimately makes the decisions?

CR: It’s a mix, from what I’ve observed. For example, the director unilaterally made the key decision that bonuses would be given in the form of goods from the state commissary. The union could have argued with him, but the decision wasn’t really controversial. The details of the incentive system then were hammered out by a bipartisan union-management commission, and I was told that the director accepted completely the findings of that commission.

If the union wins a victory, it will be about a basic principle. In this case, the union pushed for the lowest-paid workers to get the highest incentives. The previous incentive system, in place for the last twelve months, was fairly equal across the board, which disproportionately helped the higher-paid workers.

The union pushed the principle of disproportionately high incentives to lower-paid workers. And they won that. That was a gain. No question.

JB: Lastly, could you comment on the point at the end of the article that a key issue for the revolution is going to be to foster more participation, more economic decision-making. What’s the situation now? Where do you think it should go?

GR: First of all, worker participation is mainly going on in the state sector. All these terms depend on your definitions. There’s workers’ control in the private sector in the sense that owners have to share basic information. So workers can review management decisions and information, but they have virtually no say, even in lower-level management decision-making.

On the other hand, state-sector workers do participate in decisions about day-to-day operations. On this state farm there is a lot of worker participation in lower-level management both at the workplace and the other units of the enterprise, all the way to the consultative council. On wages, social benefits, assignment of labor power, there’s a lot of input.

But there is little or no worker participation in higher-level management decision-making in terms of how much should be produced, how much should be spent on different aspects of production, and the technical aspects of the cultivation of tobacco. This is partly because of worker ignorance, partly because of very little systematic planning or theoretical understanding of what it will take to get a relatively uneducated class of workers into a position to participate.

There have not been sustained attempts to raise worker participation from a lower level to a higher level in management decision-making. They have a lot of excuses for why haven’t developed that. One of my criticisms of the revolution is it doesn’t have an overall plan to upgrade worker participation. It’s not even discussed at the national level, like it was in the early 1980s – often by foreign residents of Nicaragua, foreigners who’d become citizens of Nicaragua, who had knowledge of the experiences of other revolutions.

On the other hand, there are people within the national office of the farmworkers’ association who do have visions of their children running enterprises in Nicaragua, expectations that there will be self-managed enterprises in Nicaragua.

The ATC secretary of organization for the region, for example, wants me to come with him to study a couple of collectives that I haven’t previously visited. A collective in Nicaragua is where the state owns the means of production but the workers run the operation themselves. Two collectives on two units of a disbanded state farm are now being run in the tobacco sector by workers in our region. He told me they were doing quite well and he would use them as models for the future of self-management.

So, there are scattered individuals who are starting to implement these ideas and have a vision of the future. But it’s still very rare. There isn’t that much time and energy.

JB: What about the problem of maintaining productivity and at the same time giving people the fruits of their labor, motivating people to accept the kinds of sacrifices that are necessary, particularly in building up the economy of an underdeveloped country? It seemed from your description Nicaraguan workers in individual enterprises were free to struggle around these sorts of issues with management, but that seems quite different from a situation in which there is collective management at the national level.

GR: Yes, that’s true. One of the criticisms that the economist Peter Marchetti makes is that people had very little input into some of the big national decisions that were made in 1988. Even some of the regional party and government figures were only consulted at the last minute about the June reforms.

It’s also true that bread-and-butter issues dominate people’s energies. People are just barely getting by. Some are starting not to get by – especially families with few or only one income earner. Single mothers are in the worst shape. So, people don’t even consider these participation issues. They are secondary now that survival is at the heart of the matter. That’s understandable.

On the other hand, you could still make the principal argument that the more people have a stake in the enterprise in the long run the more willing they will be to meet the goals of the government, which is so worried about raising production. The single-mother education program at Oscar Turcios state farm is raising the morale of the women. I know women who were badmouthing the revolution just a month before they entered the adult-education program, and now they’re so pleased that the union cared enough to start adult education that they’re won over.

I would bet if there were more systematic attempts to involve more workers – not just the union local leaders – in decision-making, if regular assemblies were held to give the rank and file access to some basic decision-making, that it would affect morale and have a positive effect on productivity.

One of the problems is that the union local leaders and those higher up in the bureaucracy, for a set of reasons, have poor communication with the rank and file. There’s a constant failure to report back to the rank and file on what happens in assemblies and meetings. Part of that is that people don’t have the literacy skills to take notes. And they’re burnt out. Many of the women who have been working all day, come to a meeting exhausted. They put their heads on the table.

JB: Why do they have meetings after work? Why don’t they have them during the day, so people wouldn’t lie exhausted?

GR: At the intermediate level and the unit level, meetings do take place during the work day. The smaller the amount of people, the more likely they are to meet during the day. Also, the expanded council meetings, with workers from four units and management, are long meetings; they’ll start 8or 9 in the morning and go until noon. Worker assemblies are also held during the day. But people are so obsessed with not losing time from work that assemblies are infrequent now.

JB: Is management is concerned about it?

GR: The union also. Because union-management relations at the state farm are relatively good, there are a lot of common assumptions. Even the general secretary said at an assembly, “We’re all really workers. The director is just a more skilled one.” He would privately tell you this is only rhetoric.

JB: Then why do they say it?

GR: Partly because the Sandinista emphasize national unity, stressing that “we all are in this together, we have to raise production, and in the end everybody will benefit, including low-paid workers.” Union leaders echo this line.

But then you’ll go to meetings where somebody, who you think has been getting in too good with management, will bring up a complaint against management. And they’re not doing that to make the other workers feel good. They’re doing it because of the real class conflicts that exist within state enterprises.

July-August 1989, ATC 21

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