Long weekends could hit low-wage workers

Some critics are concerned that the plan would impose new burdens on the low-paid service workers who will likely be drafted to work on those holidays.

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July 3, 2016 19:27
3 minute read.
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money. (photo credit: REUTERS)

 
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A three-day weekend every other month sounds great in theory, but the new arrangement could be tough on low-wage workers.

The current bill, spearheaded by Kulanu MK Eli Cohen, would create a banking holiday on a Sunday every two months, but allow businesses to stay open if they pay their workers an extra 25%-50%. School holidays would coordinate to align with the holidays, to ensure that parents and their kids have more similar vacation schedules, meaning parents wouldn’t have to take time off work or pay for child care accommodations.

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Since many of the country’s white collar workers would want to spend the day having fun--going to movies, shopping, eating out, and hitting up domestic tourist spots--those places would be more likely to stay open, and shell out the extra cash to their workers.

But some critics are concerned that the plan, while serving to better off workers in the country, would impose new burdens on the low-paid service workers who will likely be drafted to work on those holidays.

“Children of the poor will not have the framework of where to go, and their parents will be working, because the holiday is a day in which the rich will go for leisure, and the poor will work,” said Michel Strawczynski, a researcher at the Hebrew University and head of the Economics and Society program at the Van Leer Institute.

Even with a salary boost, he argues, the arrangement may not help low-wage service workers who are forced to shell out for child care.

Hourly workers who work at white collar office buildings, such as cleaners, will also see their salaries drop as their places of business shutter for the day.

The Bank of Israel, which provides the government economic policy analysis, expects that additional days off will have both upsides and downsides for Israeli economically, but doesn’t see the program as an overall economic booster.

In the worst case scenario, cutting 6 of 250 working days a year, which represents 2.5%, would directly lop 2.5% off of the country’s GDP. But BOI researchers told The Jerusalem Post that they see a more limited impact, partly because there will be a boost to domestic tourism and service industries. That, they said, could reduce inequality, though they didn't account for how childcare costs might fit in.


Small service-oriented businesses, though, aren’t sure how it will play out.

“Closing the business is a problem, so I’ll have to pay out more to the workers,” said Itzik Dagmi, the owner of the Port 19 restaurant in central Tel Aviv. “If there’s more traffic, that’s great. But we don’t know what will be. We’ll have to see.”

Another sector that could be hard-hit is industry, which accounts for a quarter of economic output. In a competitive global marketplace, factories and high-tech companies alike will have to choose between delaying the delivery time for their products or paying extra labor costs for getting them out on time.

That’s how Eli Granit, the CEO of furniture manufacturer Global Israel sees it. Every extra day his plants are closed, he said, will simply mean one less day of production.

“When you look at any regulation, it’s good, but altogether it’s a burden.,” he said, arguing that more investment in technology would boost wages, which would be better for workers.

All in all, BOI researchers said, the policy would shift economic activity slightly away from export-oriented industry and toward domestic consumerism.

That effect amplifies an already-growing trend in the Israeli economy, which has seen private consumption prop up the economy as the strong shekel and poor global economic environment have hit exports.

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