Civil Fights: 'Yes' to compulsory arbitration

When a public-sector dispute is mostly about wages, strikes should be outlawed.

University 224.88 (photo credit: Ariel Jerozolimski [file])
University 224.88
(photo credit: Ariel Jerozolimski [file])
If there is one thing the 10-week-old strike by senior university faculty should have made clear to all, it is Israel's desperate need for a compulsory arbitration mechanism in the civil service. Not all public-sector strikes are suited for arbitration, since some are wholly or partly over policy issues (privatization, reforms, etc.; the high school teachers' strike was in this category). But many revolve purely around demands for raises, making them eminently suitable for arbitration. And in these cases, arbitration should be compulsory. The lecturers' strike is a classic example. Senior faculty initially demanded a 35 percent raise, claiming their salaries had been eroded by that amount in recent years; the Finance Ministry claimed the erosion totaled only 3 percent, and therefore initially offered only that amount. Both sides agreed that the lecturers deserved compensation for erosion; the argument was strictly over facts - namely, how much erosion had actually occurred. And that is the kind of question a professional, independent arbiter is eminently qualified to settle. In this case, the treasury suggested arbitration, but the lecturers refused. Many arbitration cases have dragged on for years, they argued, and they want a raise now. Given past experience, that is a valid concern. But it is one that a compulsory arbitration law could easily resolve. First, such a law would impose a mandatory timetable: how long the parties have to prepare their initial submissions; how long the arbiter has to review them and demand additional data; how long the parties have to submit this data; how long the arbiter has to draft his decision. Extensions would have to be possible in exceptional circumstances, but if all parties adhered to the timetable, the process should not take more than six or eight months. Second, the law would ensure adherence to deadlines by imposing sanctions: For instance, if either side failed to submit requested data on time, the other party would win by default. An arbiter who missed deadlines would have his fee reduced. Third, it would mandate substantial fees for arbiters. Otherwise, nobody competent would agree to put his regular work on hold and devote himself to finishing the case within the designated timeframe. TO ENSURE that time is not wasted in choosing the arbiter, the law would mandate preparation of a list of suitable professionals willing to serve in this capacity. Both the government and the unions could propose candidates for this list to the National Labor Court, which would accept or reject them (and could also recruit its own candidates); the court would then appoint the specific arbiter for each case. Finally, any raise awarded by an arbiter would be retroactive to when the dispute began, so that workers would not lose by the fact that even relatively speedy arbitration takes much longer than a strike. Each arbitration would probably cost several million shekels - a trivial sum compared to the cost of the average public-sector strike. The lecturers' strike, for instance, has thus far devoured over 10 weeks of a 14-week semester. Quite aside from the many incalculable costs - the material that students will never learn (since the "make-up" period will almost certainly be shorter), or the fact that students who depend on summer jobs to finance tuition will have to spend this summer making up classes instead of working - the sheer financial costs of extending the academic year are substantial. And the lecturers' strike affects only one narrow slice of the economy. A general public-sector strike, such as that in May 2003, costs from $90 million to $220 million a day (depending on whose calculations you prefer). Arbitration would also significantly erode the unions' capacity for extortion. In 2001, for instance, several public-sector unions struck to demand real wage increases. Given that at that time, gross domestic product was dropping, unemployment was rising, private-sector salaries were falling, and all public-sector workers had received a 3.6 percent raise (more than the combined inflation of the past three years) a few months earlier, any arbitrator would quickly have deemed these demands unjustified. But the government, desperate to end strikes that were strangling the economy and disrupting the public's life, capitulated to one union after another: Dockworkers, for instance, got a 10 percent raise over three years; airport workers got 8 percent over the same period. AND OF course, arbitration would also spare the public the recurrent misery of lengthy strikes. Compulsory public-sector arbitration is hardly unprecedented internationally; it exists in several countries, including the United States, Canada and Japan. In those countries, strikes in key public-sector industries are forbidden altogether; that is the price workers agree to pay in exchange for the public sector's greater job security. Here, in contrast, the public sector accounts for more than 95 percent of all strike days every year, despite comprising only one-third of Israel's workers. This figure alone is enough to show that public-sector strikes are out of hand. And the reason is obvious: Private-sector workers strike only as a last resort, since their pay will certainly be docked, and they could even be fired. But public-sector workers have no such qualms: Not only do they not risk dismissal, but usually, the government consents to pay them in full for the strike days as part of whatever agreement ends the strike. Ideally, Israel would also ban strikes altogether in key sectors. But the Knesset has repeatedly rejected this idea, and probably would again. A more limited ban, requiring compulsory arbitration instead of strikes only if the dispute is mainly over money, as the lecturers' strike is, might have a better chance. And any such proposal would certainly enjoy public support: A Labor Ministry survey in 2002 found that fully 84 percent of Israelis supported compulsory, binding arbitration in public-sector labor disputes. For the past two decades, Israel has had one of the highest strike rates (i.e. strike days per worker) in the Western world. This has negatively affected our economy, our productivity and our quality of life. Even a limited compulsory arbitration law would significantly reduce this damage. It is therefore past time for one to be legislated.