Evolution, specifics and institutional traps of the institute of labor organizationand remuneration in the northern regions

The modern stage of RF Northern regions development is primarily due to the increase in economic effectiveness of the use of financial and human resources in these areas. In this regard, addressing these issues and identifying the problems is relevant through the study of the institute of labor organization and remuneration. On the example of Khanty-Mansi Autonomous Okrug-Yugra the article discusses the evolution of this economic institution and its characteristic features. The prerequisites for the creation of the institute of labor organization and remuneration were laid in the Okrug in the 1930-1960s. Khanty-Mansi Autonomous Okrug-Yugra differed in the specifics of remuneration regrding different allowances and payments for working in harsh environments. In the years of development of industrial operation of oil and gas fields in the area the attraction of labor resources required a variety of “progressive remuneration systems” leading to the formation of a high level of wages, compensation and other social payments. The study analyzes the dynamics of average wages by ownership of organizations, by economy sectors of the okrug and by economy of Khanty-Mansi Autonomous Okrug-Yugra in total in comparison with the Russian Federation over the past 15 years. It reveals that for decades the wage level in the region has been several-fold greater then in the Russian Federation. According to the author, it affects the high cost of production, especially in labor-intensive sectors of the regional economy. The article describes obvious features of institutional traps of the “high remuneration system” of the modern institute of labor organization and remuneration in Khanty-Mansi Autonomous Okrug-Yugra. Monopolization of the economy of the oil and gas producing region contributes to the preservation of high wages in the industrial sector. In this regard, the development of small and medium business in the area becomes extremely problematic. To overcome the institutional traps the author proposes economic diversification of the okrug and transition to the economy of the middle level and the competitive labor market, giving the opportunity to get out of the “high remuneration system”.