Business ethics 88.
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The recent Histadrut strike led to conflicting feelings in the Israeli public. Many Israelis have a certain amount of identification with public sector workers; yet virtually all feel outraged at their vulnerability to Histadrut work actions, especially the vulnerability of the major airport.
One possible escape route, which was suggested in the previous government, is to limit the right to strike in various ways. In my opinion, the vulnerability of the economy to strikes is indeed intolerable, but limiting the right to strike is an inappropriate and unnecessary remedy.
The correct solution is based on a correct understanding of the right to strike in the first place. Unions don't strike in order to "realize their rights." For hundreds of years, modern economies have determined wages not by judges, but by market forces. Unions and strikes are bargaining tools meant to enable organized labor to get an advantageous price for their work. Correctly regulated, unions are a functioning part of the modern competitive economy and not in any way in opposition to it.
Indeed, according to one popular (though controversial) theory, John Kenneth Galbraith's "countervailing power" approach, unions are a key to competitiveness. In a completely competitive environment the skilled employee can say, "If you won't meet my demands, I'll take my skills somewhere else," but in practice the boss replies: "Just try! You can't find a similar job, but I can find a similar worker." But when there is a union, the boss has to pay attention; he can replace any given skilled employee, but not his entire skilled work force. Now if the boss says he'll find a replacement, it's the union's turn to reply, "just you try." If all workers withhold their labor, the boss is over a barrel. In this case, organizing labor levels the playing field by enabling workers to realize the bargaining power inherent in their unique abilities.
Of course, there is a not-so-subtle distinction between the intransitive and transitive versions of strike. It's OK to strike (intransitive, stop working, Hebrew lishbot) but not to strike (someone else, transitive, Hebrew lehashbit). In the transitive version, when the employer says he'll just find a replacement, the union doesn't say, "Just your try;" instead, it says, "Don't you dare!" This reply reveals that the workers are not exploiting their bargaining power; they are denying it. They basically acknowledge that they have nothing to offer the employer.
Naturally, strikes in this case don't involve withholding work, but rather blockading workplaces. The unions state that if their demands are not met, they will act to bring work to a standstill or a slowdown. It's hardly surprising that these tactics are effective, but it seems inaccurate to call them "strikes." These actions seem closer in nature to extortion, where concessions are extracted by threatening aggressive action, not passive inaction. There is no question that legislation must strictly forbid aggressive action of this type. This judgment is unrelated to the justice of workers' demands. Having a valid grievance does make it legitimate to engage in peaceful protest to draw attention to demands, but it certainly doesn't grant the right to sabotage the workplace.
Applying these considerations to the recent work action, striking is a valid work action for government employees who feel they are underpaid. These workers are in a long-term employment relationship with a highly centralized employer, namely the government. They have skills and experience that are expensive to duplicate in the open market. They have the right to try and realize the full value of their abilities, including through collective bargaining.
Does that mean that granting the right to strike in the public sector means that provision of public services will forever be a hostage to Histadrut demands? Absolutely not. Workers have the right to strike, but it is the employer's right and even responsibility to do the best job possible to keep providing services without the striking workers. When AT&T workers went on strike in 1983, managers temporarily took over various line jobs in order to keep the phone system from becoming paralyzed. AT&T also took steps well in advance to limit its dependency on the union. That doesn't mean the union lacked any bargaining power; the AT&T workers were skilled and experienced employees, and greatly needed by AT&T. They obtained many of their demands. It just means that their bargaining power, and their ultimate achievements in bargaining, were proportional to their workplace value and not to their power of extortion. They attained many but not all of their aims.
By the same token, the Israeli public sector has a responsibility to take steps to reduce its vulnerability to striking workers. One way to do this is by union-busting, but this is not the only or even the most effective way. The Israeli public sector should do the same thing AT&T did: think ahead for ways to keep essential public services going without the good graces of the union. Keeping air traffic running smoothly should be foremost among these considerations. The employer, in this case the government, has a job to do. One way to do the job well is to keep the workers happy and keep them from striking; another way to do the job well is to have adequate substitutes for union workers, at least in the case of an acute emergency.
Is this "substitution" approach unfair to workers? By no means. As in any fair bargaining situation, they face the opposite consideration. One way to get better conditions is to threaten to withhold their work in a strike. But the union learns that acting responsibly in bargaining situations will reduce the employer's urgency to sidestep union labor altogether.
I don't believe that current legislation achieves the ideal balance between the right to strike and the need to avoid coercive power, but it does achieve an adequate balance. Unions legitimately control a valuable economic resource - the skills of their members. They are allowed to haggle over the price of this resource. But by the same token, the employer is empowered to choose between the benefits of relying on this resource, namely ready access to a quality work force, and the costs, especially vulnerability to crippling strikes.
If the Israeli government will take seriously its responsibility to provide quality public service to the citizen, they will carefully balance the immense benefits of working with the unions against the immense risks of total dependency, and take reasonable steps to reduce vulnerability. I believe that Israel has no urgent need for union busting, nor any justification for remaining vulnerable to union extortion.
The writer is research director at the Business Ethics Center of Jerusalem (www.besr.org), an independent institute in the Jerusalem College of Technology.
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