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From Labour Focus on Eastern Europe, No. 60, 1998.

Tatiana Zhurzhenko

Ukrainian Women in the Transitional Economy

The conflicting experience of seven years of independence and economic reforms in Ukraine is possibly not yet sufficient in order to make final conclusions regarding the "great post-Communist transformation". Nonetheless, even now it is evident that the social costs of the transformation to democracy and the market economy have been unexpectedly high. The growth of unemployment, destruction of the social sphere, and the sharp fall in the standard of living have in varying degrees touched the entire Ukrainian population. One important feature of the economic and political transformations in the transition society is that they are affecting the situation of men and women differently  -  the social and economic costs of market reforms to a greater degree fall on women. This is especially characteristic of contemporary Ukraine, where the chosen scenario of reform deprived women of the benefits of 'socialism', without being able to guarantee them access to the positive aspects of the market economy.

The new market discourse
However, before turning to an analysis of this concrete situation,  it is necessary to ask the question: can this problem be solved from the position of scientific positivism and androcentrism which are so characteristic of the social and economic sciences in contemporary Ukraine?  In the dominant academic and public discourse, women's problems are always considered marginal and of secondary importance. This is not by accident. The process of transition to a market-oriented economy is reinforced by defined forms of social knowledge. The role of economic theory in this process is  the ideological legitimisation of the market social order. The natural and unchanging nature of the existing division of labour between the sexes defines the conceptual basis of economic science and is a principle part of the ideological legitimisation of the market. Gender-neutral science turns out to be incapable of explaining the reasons for the worsening economic situation of women.
The disintegration of socialism and the beginning of the transformation of  post-Soviet societies in the direction of democracy and the free market is seen today as evidence of the final victory of neo-liberal ideology. Ideas of economic liberalism (the market, free competition, private  entrepreneurship), supported by the authority of economic theory,  have been  both a force for the destruction of the Communist system and, at the same time, the theoretical and ideological basis of the project of transition to the market-oriented economy. In order to analyse the situation of women in the transition society, it is very important to understand that this project is not gender-neutral and that the worsening of the position of women in the economic sphere is determined not simply by government policy but also by a change in the place of "women" in the discursive mechanisms of power.
The terms "transition period" and "transition economy" are concepts which are widely used in the social sciences but are nonetheless not fully defined. They emphasise the process, but not the result, and leave open the question of the direction of the transition. At the same time, the concept of the transition economy justifies the disintegration of society and the social costs accompanying market reforms, including the worsening of the situation of women and other vulnerable social groups. The transition period is usually regarded as a natural and inevitable stage when the market mechanisms, which supposedly will guarantee the social equity and welfare of all members of society, has not yet formed. In this way the ideology of transition is itself a part of the mechanism generating the social and economical marginalisation of women in contemporary Ukraine.  
In promoting market rationality and economic efficiency as the main social priorities, this ideology of marketisation regards the worsening situation of women in the sphere of employment and the plunge in the level of social protection as a natural outcome of economic progress. The social benefits of  economic reforms are expected in the indefinite future, after the final victory of the market system.
The logic of market reforms dictates a rather precise and severe sequence in which structural transformations and the modernisation of production take priority over social programs. Financing the social sphere according to the residual principle (that is, in the final count, when all investments have already been distributed among various branches) met with strong criticism in the beginning of the Perestroika period. But today this is firmly anchored in the principles of neo-liberalism.
In the context of the global goals of constructing an independent state and a market economy, women's problems appear secondary and even over-exaggerated to all except representatives of the women's movement, pushed by the logic of market reform into "economic romanticism".
Thus the feminist approach to analysing the status of women in the economy breaks from the conventional gender-neutral concepts of transition. Men and women, as a rule, are included in varying degrees in market and non-market  forms of economic activity. Male economic activity, which is usually market-based, and which therefore enjoys social prestige and corresponding rewards, is regarded as properly economic. The female contribution to the economy (most of it) is tied to the reproduction of human life (child birth, raising children, house work) which does not receive an appraised value on the market and is therefore economically marginalised in the framework of  the dominant value system. Therefore the transition to the market economy doesn't just strengthen sexual discrimination on the labour market, but also marginalises female economic contribution.  The economic transition, for women, is also a forced transition from the market sector into the domestic labour sector, with the aggrandisement of their share of unpaid housework. Particularly for this reason the market economy is not gender-neutral and the influence of market reforms on the situation of women deserves special analysis.

The Soviet legacy  
However,  gender inequality already existed in Soviet society before Perestroika and market reform.  Therefore the study of the contemporary situation of women in the Ukrainian economy cannot be made without a short characterisation of the Soviet legacy.
It is well known that one characteristic of the Soviet economy was the high level of employment of women. In the 1970s and 1980s women's employment reached it's biological maximum, when women made up more than 50 percent of the work force. This situation was predetermined by political and ideological factors (the special policy of active involvement of women in production was seen as a practical realisation of the Marxist concept of female emancipation) as well as by economic factors (launching of the economic industrialisation campaign by the Stalinist regime created not only a short-term increased demand for labour but also established a foundation for an extensive resource-consuming model of economic growth in which the cheaper, more  easily manipulated female labour force was a vital resource).
The high level of female employment was ensured by an explicit social policy. Nonetheless, as has been shown in the studies produced by the  Moscow Centre for Gender Studies (for instance, Women in Russia. New Era in Russian Feminism,  edited by A. Posadskaya,  London, Verso, 1994),  their main attention was devoted to the safeguarding of women's social protection by way of extending guarantees and benefits in the labour market instead of ensuring real equal opportunities. In the Soviet political discourse the problem of "women's rights" was practically absent. Instead the emphasis was placed on the "protection of motherhood". The main elements of this protectionist policy were: restriction of the use of female labour for heavy and harmful work‚ compensation pay tied to such work, benefits and assistance tied to child birth and child care, labour benefits and special measures to support women with children.
On the one hand, these measures had the positive effect of ensuring stability and confidence in the future. On the other hand, the long-term effect had, at times, negative consequences for the situation of women. For example the compensation paid to women employed in heavy and harmful work created artificial incentives for women to work in this area.  This promoted the retention of both technological backwardness of industries and professional segregation, for example, by using female labour in auxiliary positions and heavy labour.  Paying compensation was easier than industrial modernisation. The female labour force, overloaded with social guarantees, evoked negative attitudes from employers and this situation became especially acute with the beginning of market reforms.
In the 1970s-80s, Soviet society developed, to an extent, a certain type of gender contract - the "working mother". It implied the combination of women's family life with a role in  industry, with the government providing the necessary preconditions: day cares, free medical care and maternity leave. The result was the creation of the phenomenon of "dual employment" which was characteristic of the socialist systems. But the social services provided by the government, taking into consideration their composition and quality, could not compensate women for the overload resulting from the combination of several social roles. The low quality of goods and services, queues, and shortages increased the amount of unpaid domestic labour which played an especially important role in the  "deficit economy".

Ukraine in the post-Communist period
These peculiarities of the system of female employment were inherited by Ukraine after the break-up of the USSR. However, in the conditions of transition to the market economy its positive aspects (above all social benefits and guarantees to working women) were lost and the economic decline and tightening of competition on the labour market has given birth to new serious problems in the area of women's employment. Furthermore, the promised possibilities related to the market and economic freedom have in reality turned out to be inaccessible to the majority of women.
The question still remains unclear as to what degree these negative tendencies reflect the general consistency of post-Communist societies and to what degree they are tied to the peculiarities of the market modernisation specific to Ukraine, with the incompleteness and contradictions of political and economic reforms. Such peculiarities of contemporary Ukrainian society as nomenklatura capitalism, re-monopolisation of the economy, and "shadow business"  bloc all independent female economic or political initiative or make them an object of manipulation.

End of social contract
The first direct consequence of reform was the destruction of the social contract. The erosion of the social contract actually began in the 1970s, with the emergence of an alternative (although mostly shadow) system of fee-based social services offering, as a rule, a higher quality of service. Nonetheless, the stability, social protection and material independence of women was still ensured. With the beginning of reform, however,  the government unilaterally abandoned its responsibilities and the "working mother" gender contract was replaced with another type of contract,  one which endorsed the strategy of autonomous individual survival. It was one based on the ideology of individualism, the values of private initiative, and free enterprise which,  in  the mythology of national values and traditions,  assumed the figure of the "strong male"  - the  bread-winner.
The woman, faced with such a division of gender roles, became responsible for the family, raising children, housework - practically the Victorian family model, which historically never existed in Ukraine. This type of gender contract not only legitimised discrimination in the labour market ("men need jobs more than women"). Its shadow side was the active use of female labour (both paid and unpaid) as the main resource at whose cost society existed during the times of the economic hardship, when male entrepreneurs were mainly preoccupied with the redistribution of government property. In reality, it was now  women found themselves responsible for the economic survival of their families, since it was women who were more ready to adapt to the new conditions, even at the cost of marginal secondary forms of employment,  and who were less concerned with considerations of prestige and social status.  

State, market, family
Today the redistribution of functions between the family, the state and the market, resulting from the privatisation of functions previously provided for by the government through the intermediary of state enterprises,  has lead  to an increase in the social burdens placed on  the family, especially on women. The destruction of the system of social protection, the increase in the cost of social services,  the deteriorating quality of medical care,  and commercialisation of education forces women to accept the burden of  social responsibilities which earlier were managed by the state. The irony of  market reform in Ukraine is that,  faced with a sharp decline in the standard of living of families,  many types of goods and services, which used to be delivered by the state and acquired on the consumer  market, are today produced within the household (mainly by women).The growth of unpaid women's domestic labour is evidence of the women's marginalisation in the transitional economy.

Unemployment
Female unemployment, like unemployment as a whole,  was a  new phenomenon in the Ukrainian economy. How acute is this problem? On the one hand, during the last few years,  it is namely women who have made up from  70 to 80 per cent of the unemployed. On the other hand, according to official data, Ukraine has an extremely low unemployment rate. In 1994 the rate was 0.3 per cent, rising  to 2,5 per cent in 1997. (National Tripartite Conference,  Women in the Labour Market in Ukraine, Kiev, 17-18 February 1998, p.30). Taking into account the catastrophic decline in the volume of production (about 55 per cent in the last five years) such a low unemployment rate seems unlikely. However these figures do not take into account hidden unemployment tied to various forms of partial employment, shortened work weeks, shortened work days, and unpaid, company-initiated leaves of absence. Taking these into account, the real unemployment rate is between 12 per cent (according to the International Labour Office), and 40 per cent (according to the United Nations). Hidden unemployment is a shock absorber which prevents massive dismissals for which the economy and society as the whole is unprepared.
Why do people who have lost their jobs or who have not been paid for many months rarely turn to employment services? One of the answers may be the insignificant amount of unemployment aid (40 hryvnyas per month, approximately $20), which doesn't make it worthwhile putting up with the difficulties involved in obtaining unemployed status. Nonetheless the main reason is socio-psychological: people to not believe in the aid of state organs, and prefer to depend on themselves by counting on professional or friendly connections or by entering the informal labour market.

The effect of hidden unemployment on women
The secret of the durability of hidden unemployment is to be found in the fact that the majority of people combine formal and informal employment.  In fact,  the second unofficial job is usually the main source of income. In 1996 (even according to official data) one-third of the employable population supplemented its income with a secondary job and, among youth, the proportion with secondary jobs was as follows: 80 per cent of workers, 64 per cent of students, 63 per cent of pupils and 60 per cent of the unemployed. (Kucheruk V.,  'Rynok pratsi: tryvozhni tendentsii',  Polityka i Chas, no. 4, 1997, p.18.) According to a Ukrainian-American study, 70 per cent of Ukrainian workers in 1994 used various forms of "survival strategies" and there is no reason to believe that this percentage has today diminished. (Johnson S., Kaufmann D., Utsenko O. 'Household Survival Strategies',  Ukrainian Economic Review, V. II (3), 1996, p.113).
In reality, all sides are more interested in preserving hidden unemployment than is at first evident. The government in this way preserves the appearance of its control over the economic situation; companies save money on the payment of benefits; and workers under the conditions of total socio-economic instability prefer a passive strategy of survival and avoid  wasting their time looking for work or retraining. The decline in earnings is compensated by free time used for additional employment. Companies turn a blind eye to the practice of using equipment and materials for work "on the side" or "under the table" since this helps to compensates for the cut in wages.
In this situation of hidden unemployment, women find themselves in a more vulnerable position than do their male counterparts. They are more confined in their choice of secondary employment and "survival strategy" for various reasons (more loaded with domestic responsibilities, competition, inaccessibility of some of the most profitable forms of activity, and harsh attitudes in the sphere of the shadow economy). Women are often left with no other choice than becoming domestic workers. Women who have a more narrow set of qualified skills are more inclined to cling to their old workplace. Furthermore, they are tied to a greater degree to the remaining social benefits and services still provided by the enterprises.
Women not only make up the majority of the officially registered unemployed (which means that they more frequently lose their jobs and have a more difficult time finding work) but are also more vulnerable in situations of hidden unemployment. Women are more often sent on unpaid leaves of absence or transferred to a shortened work schedule. At the beginning of 1998, men accounted for 5.6 per cent of forced unpaid leaves initiated by employers whereas this figure for women was 6.5 per cent. Forced to work only partial days or partial weeks were 3.9 per cent of men and 5.3 per cent of women. (National Tripartite Conference, Women in the Labour Market in Ukraine, Kiev, 17-18 February 1998, p.6). Hidden underemployment has become a new area of women's discrimination.
In general, the actual rate of unemployment is understated due to the exit from the labour force of several categories of workers stricken by labour reductions (women, persons who have almost reached retirement age). They generally transfer to the domestic work sector and do not search for work, that is, they do not register as unemployed persons not because they do not need work but rather for other considerations: they have no access to information, have low self-confidence or are ashamed of their acquaintances and those close to them finding out about their unemployed status.  Therefore official statistics in Ukraine do not reflect the real situation of women's unemployment.
According to the experts, the general level of official unemployment will increase in Ukraine in the near future: by the end of 1998 there will be 2.4 million unemployed. A big increase in mass unemployment is be expected with the completion of the privatisation process. Mass redundancies of staff in Ukrainian enterprises will lead to the growth of women's unemployment. At the same time, improvements in the unemployment benefits system will encourage women to obtain the status of unemployed persons and will thus also increase the official unemployment figures. But, compared to the conditions of present day Ukraine, the legalisation of hidden unemployment would be a positive step forward towards a civilised labour market The long-term improvement of the situation of women's employment might be expected only in case of the success of economic reforms, economic revival and the general growth in employment. However, the elaboration and adoption of special legislation which would guarantee women's rights in the labour market is vitally important in order to prevent discrimination under the new economic conditions.

Professional segregation
Finally, one other essential problem in the area of women's employment is professional segregation according to sex,  which is one of the main reasons for the wage gap between men and women. In 1997 the average wage for women working in the social development sector was 71.6 per cent of the male wage and in industry this indicator was 63.1 per cent. (National Tripartite Conference, p.25).
Although the structural transformations and economic crisis in Ukraine has a distinct influence on the structure and forms of professional segregation, its foundations were already present in the Soviet economy.
Although the economic crisis has a negative effect on the situation of all sectors of the Ukrainian economy, priority sectors able to guarantee a higher wage (fuel industries, ferrous and coloured metals) have a low proportion of female labour and a large differential in wages between men and women. Similarly, in female dominated sectors of the economy (light industries) the average wage is one of the lowest.
The differential in wages between men and women can also be explained by vertical segregation: different levels of the professional hierarchy with predominantly male or female labour. In the Soviet economy,  women dominated the lower levels of the professional hierarchy (which required unqualified manual labour); they were much less represented among higher-category workers - it was typical that qualified manual labour was the highest paid in the Soviet economy. Women were also concentrated among lower and mid-level clerks and administrative personnel. Finally, at the highest levels of the professional hierarchy (high-level administrative personnel) women were very weakly represented.
The Ukrainian economy reproduces this model. It is also necessary to take into account that the restructuring and the reorganisation of enterprises is leading  to a reduction of employment among specialists, service people and other typically female mid-level positions). On the whole, the tightening of competition on the labour market has already forced women to take non-prestigious and low-paid positions.

The absence of capital for the modernisation of industry will mean the preservation of a high level of heavy physical labour in the Ukrainian economy. For women, this will be one of the most accessible niches in the labour market. The proportion of women working in hazardous jobs has grown and today is15 per cent. Whereas previously women were attracted by benefits and additional pay linked to hazardous working conditions, today the deciding factor is the impossibility of finding another job.

Women and private business
It is a common belief that private enterprise is an alternative possibility for employment under the new economic circumstances. However, possibilities for the development of legal small businesses are limited for Ukrainian women. First of all, this has to do with the closed character of Ukrainian business, which is mainly based on family relations and/or the use of potential former Communist Party connections. Under the conditions of a low-trust business culture in Ukraine, entrepreneurial structures endeavour to create private informal networks for the development and support of partnerships where it is quite difficult for an 'outsider' to be let in. Frequently a businesswoman turns out to be the official façade of an entrepreneurial structure which hides its male relatives who, for various reasons, do not want to advertise their involvement in business. Often, people who work in government positions, who do not have the right to be involved in commercial activity, manage their companies through figureheads; the most trustworthy people in such situations are usually their own wives. When privatising state owned companies, businessmen often use their female relatives as figureheads to acquire a decisive block of shares. In addition, the rigid hierarchical character of business relations, the underdevelopment of the legislative base, and the semi-criminal character of most Ukrainian businesses make women entrepreneurs highly vulnerable. Finally, there is a lack of institutional conditions to support women entrepreneurs: no practical aid from state bodies, no access to credit,  unfavourable tax laws and complex registration procedures for new enterprises.
A successful career woman in business is still a rarity for Ukrainian society. Much more typical is the participation of Ukrainian women in the informal economy in various marginal, partially shadow forms of entrepreneurship. One such form which has grown in Ukraine since the end of the 1980s is shuttle business. It is a specific kind of small wholesale commercial business which includes delivery of foreign consumer goods to the Ukrainian market in small lots by one or a few people without any official registration called "chelnoks". In shuttle business, profit is derived from the difference in prices for the goods in the country in which they were produced and in the local market. Being accessible and democratic, demanding relatively small amounts of starting capital, this kind of business attracts women searching for any possibility to improve their economic conditions. According to various data, 60-70  per cent of the chelnoks are women. At the same time, this type of business is tied to risk, physical and psychological overloads‚ and the absence of minimal social guarantees which creates special problems for those women who do such work.
Migration of labour to both the countries of the former USSR and further abroad is gaining greater popularity. Included in such labour migration are women who very often involuntarily become trapped in such sexual trades as prostitution and exotic dancing. According to the data of the Ministry of International Affairs, there are 400,000 Ukrainian women aged under 30  living abroad and  involved in various kinds of sex industry. Specialists estimate the potential for illegal migration will be 1,400,000 women. (Den', no. 68, 11.04.1998).
The case of Ukraine shows that the transition to a market oriented economy is accompanied not simply by the crumbling of the system of social guarantees and benefits for working women but also by their growing marginalisation in all spheres of the economy. An analysis of the course of reform from a gender perspective gives grounds for criticism of the market optimism of liberal forces and also  the traditionalism of nationalist orientated politicians. It is precisely the socio-economic status of women which can be viewed as the most important indicator of successful reform in a transition society.


The author: Tatiana Zhurzhenko is Associate Professor at the Kharkiv Centre for Gender Studies at the University of Kharkiv.