01.06.09

Budget Bill

The Eini-Netanyahu Package Deal-A Temporary Truce

Israel's biannual budget bill

Labor unions around the world are taking to the streets nowadays to demand that governments prioritize workers' interests and secure their jobs. In the talks toward approving a biannual budget for 2009-2010, Ofer Eini, head of the Histadrut, made a package deal with Israeli PM Binyamin Netanyahu—but "on the way to the forum" he forgot the workers he's supposed to represent. He is busy, it seems, with more important things. The negotiations enabled Netanyahu to stabilize his new coalition, while paving Eini's way toward a ministerial post. It is only a matter of time until the collapse of a bank or corporation, or a surge in unemployment rates, will make the planned budget irrelevant.

When the package deal was made public, Eini was dubbed the big winner. As head of the most important labor union in Israel, it was his responsibility to find a solution to the danger of unemployment, put workers' rights in the limelight, and demand that the government invest in the creation of new jobs. Throughout the world economies are shrinking, and workers' movements are demanding the nationalization of workplaces, massive investment in infrastructure, and promotion of vocational training. Unions go into the streets with these demands.

Eini's agenda is different. There is simply no basis to the claim of pundits that the Histadrut came out ahead in the package deal. According to Uri Yogev, Netanyahu's man in finalizing the new budget (who boasted in 2003 that Bibi's greatest achievement was breaking organized labor), gave the following explanation: In exchange for waiving planned wage cuts in the public sector, as well as planned taxes on workers' study funds, "the State received consent from the Histadrut and the employers for reforms in the electric company, the ports and the Israel Lands Authority. This is much more important than the question as to whether the package deal gained us 2.5 billion shekels or 5 billion (Haaretz, May 14 2009)." For a detailed overview of the bill click here.

Ofer Eini does not behave like a workers' representative, but rather like a senior minister in the government, which he is not (yet). Only six months ago the sharp decline of local pension funds, privatized by Netanyahu in 2003, sent shivers down the public spine. The American syndrome gripped Israel, with fear of falling tycoons. In the midst of these developments, Eini proclaimed a labor dispute; he demanded that the Finance Ministry guarantee a safety net for pension savings and devise a plan against unemployment. Fearing public criticism, he wanted to be perceived as representing the pension-fund policyholders.

However, when a chance opened up to do something real on the ground, namely, prevent a factory shutdown, Eini chose to compromise with big money at the workers' expense. The case was that of Pri Hagalil ("Fruit of Galilee"), a plant employing 500 breadwinners. Early this year, Eini led a well-publicized campaign to prevent its closure. Here too he won positive scores in public opinion as a leader who was able to bridge gaps and save the factory. In fact, however, he aided a commercial company, Hatzi Hinam ("Half Gratis"), to buy Pri Hagalil on terms that would enable it to make profits without committing to a collective labor agreement. Thus the company could persevere in its dubious ways, shirking the labor laws by means of manpower firms and subcontractors. The agreement mediated by Eini perpetuated the unacceptable norm by which only a fourth of the plant's workers are protected by a collective agreement, the rest being under subcontractors or on personal contracts—without rights or benefits.

The fact that Eini accepted the framework of control by big money, not once demanding that the government nationalize the factory and ensure the rights of its workers, bought him much credit with Netanyahu. Eini's approach matches Bibi's neoliberal stance. When a company like Pri Hagalil collapses because of its owners' adventurous investment policy, what does the neoliberal do? He finds new owners. There is no hint in all this of the government's responsibility to help workers keep jobs and secure their rights.

Eini's strategic cooperation with Shraga Brosh, head of the Manufacturers Association, along with his achievements at Pri Hagalil, showed everyone what a moderate and well-balanced leader he is, in contrast to his hotheaded predecessor, Amir Peretz. Affiliated to Ehud Barak of the Labor Party, Eini was instrumental in Labor's entry into Netanyahu's government. Without him and the Histadrut's support, Barak would not have been able to make this move, which divided his party. Eini was able to leverage his political status while gaining unprecedented power and influence, all this despite the decline of Labor under Barak.
Is he a magician? Are Netanyahu and his right-wing coalition being manipulated by a bunch of Labor ministers, backed by eight Labor Knesset members at most? The situation is the reverse: Labor's entry into the government last March has tied its hands. One hand is bound to the manufacturers and the other to Netanyahu. The same is true of the Histadrut.

Eini's involvement in the package deal and the budget bill may be traced to a recent interview in which he declared the necessity of rescuing local tycoons (Maariv, March 27). He may have won himself a key position in Israeli politics, yet workers have paid a heavy toll. The package deal was approved at the expense of an alternative plan for coping with the financial crisis. This alternative included the following measures: stopping privatization; withdrawing pension funds from the stock market; investing in infrastructure; improving unemployment benefits and job-training; discontinuing the importation of migrant laborers; and establishing a more comprehensive social safety net.

The Eini-Netanyahu team acts today on the basis of an illusion that the financial crisis is nearing its end. Nonetheless, just a few days after the coalition approved the budget bill, the Central Bureau of Statistics published figures making that budget seem hallucinatory. The Israeli economy spun into recession in the first quarter of 2009. The GDP (gross domestic product) sank by 3.6%, and the GDP of the business sector by 4.2%. Exports slowed by 46%, imports by 62.7%.

The maladies affecting labor relations cannot be remedied by the legislative band-aids Netanyahu granted to Eini. As vital as they may be, the amendments do not change the economy's general state, where most workers are afflicted by abusive employment practices. For many years the Histadrut has enabled manpower contractors to take over much of the labor market, while refusing to face the devastating effects of importing migrant laborers. Israel's biggest union has cooperated in the destruction of organized labor.

The package deal did not address the questions vexing the great majority of Israelis, Jews and Arabs alike, who can no longer feel confident that their jobs will exist the next day. Ehud Barak, now Defense Minister, received a windfall from Netanyahu in the form of an improved defense budget; Bibi also guaranteed Shalom Simhon, the incoming Minister of Agriculture, new quotas of migrant laborers. Only the jobless were left with nothing.

In sum, the new budget bodes no good to workers. Rather it marks a ceasefire whose lifespan depends on the government's stability.

Not only the budget but the Histadrut too has become irrelevant. The workers under Eini's care have been left without leadership at a critical time. The vacuum left by the Histadrut will be filled by others who are willing to make the effort to unionize workers.

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Assaf Adiv

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