Histadrut Labor Federation chairman Ofer Eini has declared a general strike in the public sector, which could start as early as Wednesday, after last-ditch talks with Finance Minister Ronnie Bar-On over public sector wages broke down on Monday night.
"Bar-On raised the ministry's offer from a 0.4 percent to a 1% salary increase, an addition of NIS 15, which is unacceptable and not serious. We had demanded a 10.4% wage increase for public sector employees retroactive from 2001," said the Histadrut.
Following the meeting with Bar-On, the labor organization convened a meeting with union heads Monday night and decided to postpone the strike until after Tisha Be'av. On Tuesday morning, the Histadrut will reconvene to determine the date and extent of the strike.
A strike could shut down airports, ports, and trains, leaving thousands of tourists and Israelis stranded during one of the busiest travel seasons of the year. Employees in government offices, the Bank of Israel, the postal service, some hospitals and government companies such as Israel Electric Corp., employees of former state companies, including Bezeq Ltd. and El Al Israel Airlines Ltd., are also bound to be covered by the labor dispute.
The Tourism Ministry warned that a public sector strike would severely damage the country's tourist industry and cause chaos. This, only a year after the Second Lebanon War, which caused immense damage to the industry's finances and image.
A strike at Ben-Gurion Airport is expected to cost thousands of Israeli families who were planning to travel abroad during the summer thousands of dollars in cancelation fees and is expected to deter incoming tourism. At the height of the tourist season, with flights and hotels being fully booked, there will be little chance for travelers to make changes to their flights or holiday reservations. As such, much chaos is expected in particular for the tourism and hospitality industry as a result of the cancellation of reservations for flights, follow-on flights, hotel rooms, car rentals, events and functions.
Eini met with Bar-On late afternoon on Monday in a last effort to prevent a strike covering about 700,000 employees in light of the dead end reached in public sector wage talks over recent months.
Israeli economic organizations and manufacturers warned on Monday that a general strike in the public sector would cost the economy NIS 800m. on the first day and that the daily damage would only expand if the labor unrest continued.
"The business sector can not bear even a single hour of a strike," said Shraga Brosh, Chairman of the Federation of Economic Organizations and President of the Manufacturers Association of Israel.
Brosh said the strike also would cause disruptions in electricity and fuel supplies, as well as slow down imports of raw materials due to the closure of the ports, which would shut down manufacturing lines. This, in turn, was likely to delay exports, which would require manufacturers to compensate customers, he said.
Eini had instructed union heads to prepare for a general strike after a meeting with Treasury Wage Director Eli Cohen last week failed to bring the two closer to an agreement.