INTRODUCTION

The object of the work is labour productivity and wages at the macro and micro levels.

The subject of the research is review of the connection between productivity and wages in Ukraine and in metallurgical enterprises of Donetsk region.

The purpose of master's work is to determine the connection between productivity and pay in Ukraine based on an analysis of their dynamics in industry by economic activity and by region, as well as identifying the connection between productivity and wages in the metallurgical industry.

The objectives of the work are:

1) to identify current problems of regulating the connection between productivity and wages;

2) to analyze the dynamics of labour productivity and wages in industry by economic activity and by region of Ukraine;

3) to establish the connection between productivity and wages in the case of metallurgical enterprises by Donetsk region;

4) to develop recommendations for optimizing the ratio of labour productivity and wages.

Methods of researches are formalization, analysis and synthesis, classification, generalization, economic and mathematical modeling, measurement, interpretation, comparison, prediction.

A theme urgency. A lot of literature was devoted to the connection between productivity and wages in the USSR. In particular, N. Maslova, A. Ruban, B. Proskuryakov conducted research on this issue. In modern conditions study the dynamics of labour productivity and wages, Ukrainian scientists are engaged in A. Revenko, K. Krishchenko and Russian scientists R. Yakovlev and P. Ignatovsky.

Labour productivity is one of the most important economic categories, in which most fully shown the effectiveness of social production. It accumulates in close conjunction efficiency of labour, land, logistical and financial resources. Increased productivity is one of the crucial conditions of production, and on this basis, providing a significant improvement in material well-being of the Ukrainian people, and social transformations in society. Among the countries of the former Soviet Union, Ukraine has the lowest growth rate of labour productivity. Recently broken connection between productivity and wages, which negatively affects the proportions of economic indicators, socio-economic processes and in general economic development of the state.

Communication of work with scientific programs, plans, themes. Master's qualification work is executed during 2009-2010 agrees with a scientific direction of the department “Personnel Management and Labour Economics” of Donetsk National Technical University.

Prospective scientific novelty of the received results. The paper presents a methodology which allows to determine the differences in levels of productivity and wages by region and by types of economic activity. Also developed a system of volume of economic indicators, which form a subsystem of the secondary forward and reverse specific economic indicators, which include labour productivity and wages, which allow a final evaluation of the effectiveness of the company.

Practical value of the received results. This work has a certain theoretical value, as proposed in its practical recommendations for optimizing the ratio of labour productivity and wages are of interest to companies from all sectors, and the state economy as a whole and enable us to assert the prospects for further research in this direction. Proposed in the system volume and the specific economic indicators and methodology of their analysis can be used to justify the level of productivity and establish the optimal ratio advancing the pace of productivity growth over the pace of wage growth.

SECTION 1. MODERN PROBLEMS OF INTERACTIONS BETWEEN LABOUR PRODUCTIVITY AND WAGES (THE REVIEW OF RESEARCHES ON A THEME)

In Soviet times, many aspects of improving productivity has received considerable attention. Economic policies based on the principles of Marxist political economy, which is considered increased productivity the main source of economic development. In all economic development plans, from five-year country-wide to the annual plans of enterprises, in the Union and Ukrainian statistical references cited growth in labour productivity, wages, and ratios of growth rates of remuneration in the sphere of material production and social labour productivity [1, pp. 32]. In the USSR a lot of literature was devoted to the relationship between productivity and wages. In particular, N. Maslova, A. Ruban, B. Proskuryakov did a research on this issue [2, 3, 4].

With the emergence of Ukraine as a separate independent state and the transition to a transformation, market economy, attention to all aspects of labour productivity was almost completely lost. Reduced attention to issues of labour productivity is largely due to the fact that modern Western economic science, in contrast to the Marxist Soviet times, does not consider the productivity of the sole source of economic growth. It should also be noted that in the first years of independence, Ukraine, like other former Soviet republics, has moved to the international macroeconomic system of national accounts. She, unlike the so-called “balance system of the national economy” of Soviet times, does not evolve in the economy sphere of material production, which by then-representation given the exclusive role of manufacturing in national income.

The impetus for renewed attention to the productivity performance was the Head of NBU Volodymyr Stelmach at a meeting in the Cabinet of Ministers with participation of President of Ukraine on 2 November 2007. He drew attention to substantiate the need to resume and putting into practice of macroeconomic analysis and forecasting of social labour productivity. In modern conditions study the dynamics of labour productivity and wages, Ukrainian scientists are engaged in A. Revenko, K. Krishchenko and Russian scientists R. Yakovlev and P. Ignatovsky [1, 5-7].

SECTION 2. ANALYSIS OF CONNECTION BETWEEN LABOUR PRODUCTIVITY AND WAGE IN UKRAINE

There were considered statistical measures of productivity and wages in Ukraine for the years 2001 to 2007 to research the connection between productivity and pay, and the study of sectoral and regional characteristics of this ratio. We will establish the connection between productivity and wages in industry and by region. To do this, we calculate the coefficient of dissimilarities (CD) on the following formula:

(2.1)

where P_i/P_m is the ratio between region/sector “i” productivity and the national average;

W_і/W_m is the ratio between the average monthly wage in region/sector “i” and the national average monthly wage;

n – number of regions/sectors.

The coefficient of dissimilarities measures differences between the sectoral (regional) ratio between labour productivity and wages compared to the national level [8]. We present the calculation of coefficients of dissimilarities based on data from the State Statistics Committee of Ukraine and the Statistical Yearbook of Ukraine [9, 10, pp. 116-117, 409-410].

Fig.2.1 shows the evolution of indices of labor productivity and average real wages in Ukraine for 2001-2007, what values are obtained by the chain method based on statistical data [10, pp. 29, 370, 407].

Figure 2.1 – The dynamics of growth rate of labour productivity and wages in Ukraine
(Animation: volume - 78,7 КБ; size - 618х266; number of shots - 6; delay between shots - 100 мс; delay between the last and the first shots - 100 мс; number of repetition cycles - endless)

Performance analysis of the dynamics shows that the stable tendency of changes in the dynamics of labor productivity has been observed. Thus, the lowest growth rate observed in 2002 and 2005. Peak productivity growth occurred in 2004. - 111.38%. Average real wages are growing more rapidly than productivity. There have been tendency to decrease the growth rate average real wages since 2005.

SECTION 3. THE SYSTEM OF ECONOMIC INDICATORS THAT CHARACTERIZE RATIO BETWEEN LABOUR PRODUCTIVITY AND WAGES

In actual production conditions the economic evaluation of the ratio beetween labour productivity and wages of individual sites and businesses with sufficient detail can be made with the use of aggregate indicators, which form a system of cost and natural economic indicators: the number of employees, the volume of commodity production, payroll staff members, the gross income , net income, net revenues from product sales, cost of production.

There is illustrated method of construction and purpose of the special parameters in Master's Qualification Work, that characterize the influence of the level of the ratio between labour productivity and wages on the efficiency of the enterprise, as an example of metallurgical enterprises of Donetsk region.

SECTION 4. RECOMMENDATIONS FOR PERFORMANCE OPTIMIZATION OF LABOUR PRODUCTIVITY AND WAGES

Excess rate of wage growth over productivity growth leads to negative consequences in the economy. For the effective functioning of the country's economic productivity must exceed growth in wages for at least 10% [4, pp. 56]. There are two possible situations in which productivity growth will outpace the growth of its payment:

1. Wages remain unchanged, while labour productivity increased by 10%.

2. Labour productivity remains at the same level, and wages are reduced to 1.1 times.

The second option is unacceptable because of the impossibility lowering wages. Reducing wage reduces the purchasing power of the population, deterioration of its living and quality of the labour force itself, and most importantly - the loss of motivation to work for workers. Loss of incentives to work will reduce the production workers, the quality manufactured products, as well as reduced production volumes, which in turn will reduce the profits of enterprises. That is, lower wages have a negative impact on the economy as a whole. Therefore, we shall first scenario, where wage remains unchanged, and the level of productivity increases. There are calculations of projected levels of labour productivity and wages for Ukraine and metallurgical enterprises of Donetsk region in Master's Qualification Work.

CONCLUSIONS

Thus, due to the collapse of the Soviet Union, Ukraine's transition from a planned economy to a market economy, inflation, recession there have been negative trends in the size of GDP and productivity, the violation of the connection between labour productivity and wages. It is therefore necessary to give considerable attention to the consideration of productivity, and in particular its connection with wages.

Excess rate of wage growth over productivity growth in Ukraine has the following negative consequences: higher costs for salaries lead to a reduction in profit or loss growth companies; increased their share of unprofitable enterprises, reduced investment in fixed assets and general investment activity of enterprises, lack of the connection between wage growth and productivity of workers undermines incentives to work.

To overcome this situation, enterprises need to resume the calculation of productivity, establish a clear binding of wage growth with growth rates of labour productivity. In independent Ukraine grew on most of the nominal wage. In order to grow, real wages must be taken to reduce inflation, to contain rising prices for food products.

BIBLIOGRAPHY

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NOTE

When writing this abstract the master’s qualification work is not completed. Date of final completion of work: December, 15, 2010. Full text of the work and materials on a work theme can be received from the author or his scientific supervisor after that date.

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