Unions have vacillated over the years from heroism and infamy to romance and
irrelevance, and Israel’s are no exception. As the political system fathoms the
causes and implications of this week’s surprise resignation announcement by
Histadrut labor federation chairman Ofer Eini, his eight years in office loom as
the beginning of a new era in the eventful history of Israel’s organized
In the 1920s, when nearly 2 million British workers went on strike
to protest 800,000 coal miners’ salary cuts, King George told the union’s
conservative detractors: “Try living in their wages before judging
Such sympathy became common. Though that particular strike
actually failed, organized labor in those days was both strong and respectable,
a status that was bolstered in the wake of the following decade’s Depression,
when US president Franklin D. Roosevelt tried to make the unions a pillar of the
new social order.
Israel’s founding fathers were by then well ahead of
that game, having established in 1920 a union that soon emerged as the builder
of the future Jewish state.
Originally headed by David Ben-Gurion, the
Histadrut in its first years created worker services that to this day remain
fixtures of Israeli life, from bus company Egged and retail chain Hamashbir to
publishing house Am Oved and food producer Tnuva.
Towering above these
accomplishments was the creation of a health fund, Kupat Holim. It was one of
the world’s first health-maintenance organizations, and by the 1930s became the
focus of universal admiration for its quality, accessibility and
Financing much of its activity through its own bank, Bank
Hapoalim, the Histadrut gradually came to own hundreds of industrial plants and
commercial concerns that collectively drove much of the evolving Jewish state’s
economy. Clearly, it is the only union anywhere that can claim to have largely
built a state.
That is also why once the state was built, many felt that
the Histadrut had become a state within a state at best, a Frankenstein at
THE GOLDEN AGE of organized labor arrived in postwar Europe, which
resolved to avoid the kind of social insecurity that contributed to the Nazi
rise to power.
It worked well for about a generation, when repeated
surrenders to pay demands and an ongoing siege on big business, coupled with the
energy crisis and rising taxes, resulted in running inflation, diminishing
growth, rampant strikes and a growing sense of paralysis.
By the time
British prime minister Margaret Thatcher defeated the coal miners and US
president Ronald Reagan floored the air traffic controllers, organized labor had
come to be seen as a social problem and an economic burden, impressions which in
America were exacerbated by ties to organized crime, highlighted by the
disappearance in 1975 of Jimmy Hoffa, the president of the Teamsters Union who
had served jail time for bribery and fraud.
Israel had no Hoffa. However,
it had a CEO of Bank Hapoalim and a former head of the Histadrut’s construction
companies shoot themselves in the head, the latter in 1977 and the former in
1984, when police investigated them for corruption allegations. Israel also had
a former head of the Histadrut’s health fund serve a five-year jail term for
The consequent hostility to the unions was worsened by the
impression that Israel’s hyperinflation in the 1980s was partly caused by the
Histadrut’s resistance of salary cuts, layoffs and privatizations begged by the
That is how the Histadrut became ripe for the one-two punch it
was dealt, ironically, by two Labor prime ministers.
The first punch was
dealt by Shimon Peres in 1985, when he canceled the automatic salary indexations
and other compensations for inflation that gave the unions much of their clout
opposite the employers. At the same time, the Histadrut’s sprawling industrial
empire began to be dismantled when its largest holding company, Koor, reached
the brink of bankruptcy and was sold to foreign investors, who summarily fired a
third of its workers.
The second and most devastating blow was dealt the
following decade by Yitzhak Rabin, when he passed a healthcare reform that
allowed the public to select their funds, and to also continue migrating between
the funds – as they indeed do to this day. Until then, all employees in the
public sector were automatically herded into the Histadrut’s health fund, thus
feeding it with a steady inflow of salary deductions – which added up to huge
funds that were run incompetently at best, criminally at worst.
in 2004 the Histadrut lost its grip on the pension industry, when then-finance
minister Binyamin Netanyahu expropriated the unions’ mismanaged pension funds in
order to prepare them for privatization.
Added together, these setbacks
to the Histadrut’s financial resources, legal status, political leverage and
public image were such that the once-mighty workers’ union had been marginalized
and reached near irrelevance. Reflecting Israel’s transition from socialism to
capitalism, the Histadrut’s membership of 2 million in the early ‘90s plunged by
two-thirds the following decade.
A decade on, it seems the Histadrut’s
eulogies were premature.
WHEN CHAIRMAN Eini this week called an unplanned
press conference, Israel Radio stopped its regular programming and broadcast the
resignation announcement live. That alone was a sign of the relevance that Eini
managed to restore during his eight years at the Histadrut’s
Originally an income tax clerk, the 55-year-old Eini is not
particularly charismatic, but he managed to stem the decline in union membership
and even moderately offset it, after convincing workers in the cellphone and
hi-tech industries to unionize.
Since the 2008 meltdown on Wall Street,
and the consequent labor insecurity worldwide and here, some 40,000 new members
have joined the Histadrut.
A pragmatist and able negotiator, Eini was no
Lech Walesa or for that matter Amir Peretz. He was seldom caught addressing
large rallies, rabble rousing or even raising his voice. Instead, he crafted a
deal for mandatory pension deductions by all employers for all employees, he got
the Knesset to raise the minimum wage from NIS 3,850 to NIS 4,300, and he got
the public sector to formally and fully hire the guards and cleaning personnel
who were previously hired as contract workers with no rights and
Eini threatened several times to call a general strike, but
actually called one only twice, most recently last year as part of his struggle
on behalf of the contract workers – a wise choice, as that cause was backed by
practically every citizen. Eini also proved instrumental in ending labor
conflicts that were not at his initiative, like the protracted teachers’ strike
of 2007 and a university instructors strike that followed it.
finest moment came in 2009, following Netanyahu’s narrow victory in that year’s
Reading the map better than all other political
players, Eini brokered the alliance between Netanyahu and then-Labor Party
leader Ehud Barak. The deal offered Netanyahu a coalition partner who he
considered more convenient than the alternative at the time, Tzipi Livni and
Kadima. In turn, Eini obtained from the economically conservative Netanyahu
agreement to pass social legislation.
It was a political stroke of
brilliance that recast Eini as a player in national politics, and a potential
contender for Labor’s leadership.
EINI OFFERED no explanation other than
“personal exhaustion” for his departure, which comes three years ahead of his
four-year term’s expiration. Understandably, this context has made the
resignation’s coverage focus on Eini the man, who is indeed far from
Three years ago Eini divorced the mother of his four children
and moved in with an assistant whom he had previously appointed to head the
Histadrut’s network of vocational schools, Amal.
In addition, he has been
accused of cozying up to business tycoons and ingratiating the monopolies’
strong unions, like that of the Israel Electric Corporation and the Israel Ports
Development & Assets Company, passively enshrining their lavish payment
deals at the expense of weaker workers elsewhere in the public
Meanwhile, Eini’s recommendation to his colleagues, to appoint
his No. 2, Avi Nissenkorn, as the next chairman is being challenged by Labor MK
Eitan Cabel, amid charges that the Histadrut is not a kingdom and Eini cannot
appoint his successor.
Yet despite all this, the story of Eini’s time at
the Histadrut’s helm is institutional rather than personal.
growing number of members of the middle class feeling economically insecure and
also victimized, Israel’s unions returned to relevance and their services are
again in demand – a trend that will not be offset anytime soon, no matter who
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