‘Gov’t pays transportation, port workers 34% too much’
Calcalist report demonstrates the immense sway public unions continue to hold over the government.
TRAJTENBERG,members of C'tee on Socioeconomic Change Photo: Moshe Milner/GPO
Among the intriguing parts of Sunday’s Calcalist report on the politicization of
the Trajtenberg Committee for Socioeconomic Change, which drew on transcripts
obtained from the committee’s discussions, is a demonstration of the immense
sway public unions continue to hold over the government.
“Members of the
committee were nearly unanimous that the opportunity must be taken to weaken the
power of the big unions,” but ultimately failed to act, according to
Antitrust Authority chief economist Shlomi Frizet led the
“We analyzed the issue of excess wages, and we see an example of
what happens when we don’t really succeed as a government against the interest
group like the labor unions. There’s a government decision to reform this or
that in the ports that is unable to pass. Somewhere it gets stuck along the way,
and nobody owns it,” he said.
“There are issues that the government is
somehow unable to pass, not the sea ports, not the airports, also housing, at
the end of the day, because the government holds the majority of the
According to Frizet, the study on wages for workers at Israel
Railways, the Israel Port Authority, the sea ports, the airports, the Israel
Electric Corporation and the Mekorot national water company, based on an
accepted hourly wage formula, found that the state paid the workers a premium of
34 percent, adding up to NIS 1.3 billion gross annually. “That means that in the
end, we pay the monopolies wages that are higher than the [private] market pays
a worker with similar characteristics,” he said.
Shahar Cohen, director
of strategic planning for HP Indigo and one of the public representatives to the
Trajtenberg Committee, proposed steps to restrain the unions’ power, but those
recommendations never made it to the final report.
Council Chairman Eugene Kandel agreed with the need for
“What they’re doing today at the ports – when they didn’t
let them go to lunch at the restaurant they wanted and they put the port on
strike – it’s totally crazy,” he said. “I think that actually putting in
conditions, suggesting to legislators to make labor laws tougher... is very
important,” he said.
Eyal Gabai, a representative from the Prime
Minister’s Office, said state-run monopolies were “dramatic.”
monopolies for which we cannot create any kind of competition – no, nothing,” he
In a previous political scuffle with the unions, Gabai said, “They
held us by the throat, and for the year and a half I went on with this issue,
everyone crawled on the floor. I think Shachar’s suggestion deserves a
Gal Hershkovitz, the Finance Ministry’s budget director,
lamented that a five-year argument with the Histadrut national labor federation
had prevented the government from properly putting together a firefighting
authority. Ask Deputy Attorney-General Avi Licht about confronting the issues of
labor rights, he said, and “he’ll tell you now that you can’t do
Licht, indeed, said that the suggestion “surprised” him. “The
right to strike is currently considered a basic right by Israeli law,” he said,
warning the committee not to “shoot from the hip.”
“I just want to remind
you that there are tools for dealing with strikes. That is to say there is
what’s called an injunction and the state uses them frequently, and nobody’s
really done this yet, but the moment that someone wants to strike at the
Electric Corporation or Mekorot, or even the train or education system, they can
go to the National Labor Court. And if there’s a vital need, then the strike
will not be approved.
“I’m not sure it’s correct not to go down this
path,” Licht concluded.
Dr. Adi Brander, from the Bank of Israel, added,
“I think that it’s worth putting it in perspective, at least on the electricity
issues, that labor costs are 10% of the total cost of electricity. Even if you
would cut 20% of their salary, we would be talking about 2% of the price of
Far from just targeting labor unions, Frizet also had
strong words for business lobbyists.
“When the business sector runs
lobbyists it does so in a very focused way. They come and put the papers, the
facts, the requests in a very strong way,” he said. “That’s how they raised the
excise tax on gasoline, but that on coke [a coal-derived chemical used in cement
making] did not rise. There is one person in Israel that uses coke, and that is
[at] the Nesher cement factory,” which at the time was owned by businessman
“Only on him did they not raise the excise tax,” Frizet