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Politics at the Workers' Expense
by Assaf Adiv
Histadrut Chairman Ofer Eini is trying to deceive us all. On Nov. 2 he signed a two-year wage agreement and canceled a general strike, thus supporting the Netanyahu-Barak coalition in a very tangible way. The following day he came out aggressively against the leader of his party, Ehud Barak. Where’s Eini headed? Looking at his moves during the last few weeks, we conclude that he continues to support Netanyahu’s government and sticks to his strategic partnership with capital. Despite his declarations, one gets the impression he is preparing himself a place at the government table. And the workers? They’re a springboard.
It’s hard to keep track of Ofer Eini. Early morning Tuesday he signed a wage agreement for the public sector and was awarded with headlines claiming he had thus prevented a general strike (see box below). Despite the sleepless night, on Wednesday Eini dropped another media bomb when he called his party leader and erstwhile ally, Ehud Barak, “stupid.” And just before that, Eini, who is supposed to be the leader of the workers, wriggled with characteristic elegance out of accusations of a conflict of interest during his negotiations over the fate of 1,500 workers from Makhteshim Agan, a major producer of pesticides and agrochemicals.
Public sector agreement – abandoning the workers
The media presented the public sector wage agreement as an important achievement for the Histadrut chairperson. However, a close look at the agreement reveals a different picture. After 7 years of not demanding a cost-of-living supplement for all waged workers, including those in the private sector (which is three times as large as the public sector), the Histadrut has signed an agreement which does not even compensate this sector for wage erosion. According to Attorney Linda Efroni (Haaretz, Nov. 3), the agreement is bad for workers as it even relinquishes seniority and vocational-training supplements that had been part of past agreements.
Furthermore, the fact that the Histadrut does not aim to obtain cost-of-living supplements for the general working public means it has abandoned the majority of workers, especially the poor and exploited. According to Efroni’s calculations, the wage increases achieved by the Histadrut for public-sector workers during the last decade amount to 12% (including two wage agreements) – but the increase in the cost of living was a lot higher. According to the Central Bureau of Statistics (CBS), the cost of living has gone up by 17.5% since the last agreement (March 2004). The new agreement, Efroni adds, has no mechanism to prevent wage erosion.
Agreement strengthens coalition
Eini’s criticism of Defense Minister Barak must be scrutinized in the light of his behavior during the negotiations and especially in the light of the industrial peace he promised. The signing of a two-year wage agreement is closely linked to the discussions on the biannual state budget for 2011-2012. The budget, submitted to the Knesset just a week earlier, as well as the Economic Arrangements Law that was appended to it, includes a large number of structural changes which are directed against the unionized workforce, including the privatization of state companies. An example of this trend is a law to renew the Wisconsin program ("from welfare to workfare") in a different form. The Histadrut has accepted the latter as a fait accompli.
The Histadrut did not test the government’s privatization plans by a general strike; instead it concentrated only on the extent of the wage increase. On this matter it is possible to compromise, and that may be the right thing to do when there is agreement over fundamental issues. However, Eini is not interested in confronting Netanyahu on the fundamental issues. The Histadrut chairman played a key role in setting up the government and paved the way for the Labor Party to join the coalition at the beginning of 2009. In an interview with Dana Weiss on Channel 2 (“Yoman Shishi,” Nov. 5), he reiterated that Labor joining the government was a good move.
Once again, Eini proves his central position in Israeli politics as the crowner of kings. Some say he is preparing himself a place at the government table. One thing can be said for sure – Eini, by signing the agreement, has provided Netanyahu with calm, enabling him to stabilize the coalition and pass the biannual budget.
Even if we look at the agreement from a purely economic point of view, we see that the Finance Ministry didn’t hand over more than it intended in any case. According to an overview of the agreement by Haaretz columnists Motti Bassok and Haim Bior (Nov. 3), the wage supplement agreed on for 2011 will cost a total of NIS 2 billion, while the sum allocated to wage supplements in the proposed budget for this year was higher. Even the one-off compensation of NIS 2,000, to be paid in one lump sum for 2009 and 2010, is low, amounting to some NIS 85 per month (calculated for the 24 months of the these two years). Anyway it is much less than the 2% annual supplement determined in the agreement.
Selling Makhteshim Agan – losing future jobs
Just a week before, Eini was active on another front – the struggle waged by workers of Makhteshim Agan to save their jobs. This affair exposed the close ties between the Histadrut leadership and the tycoons, and showed up the narrow horizons of Histadrut policy regarding privatization and the destruction of the local industrial sector.
There are ethical issues to Eini’s maneuvers too. During the public debates on the sale of Makhteshim Agan and its two successful plants at Ramat Hovev (south of Beer Sheva) and Ashdod, a very problematic aspect of the chairperson’s character was revealed. Eini held negotiations in the name of the workers with the company owners, led by Israel’s number one businessman – Nochi Dankner, chairman of the board of IDB Holding Corporation Ltd., the owner of Makhteshim Agan. However, it turned out there are close personal ties between Dankner and Eini, and first-degree family members (his son and brother) are employed in senior positions in IDB. A number of press investigations revealed that other senior Histadrut figures also have positions on boards of companies for which they receive fat bonuses. The conflict of interest is apparent.
Eini promised to hold clean negotiations, but his worldview and that of the current Histadrut leadership led him to a destructive arrangement which seems to accept the takeover by private capital. The workers want to prevent the sale of a successful and profitable company like Makhteshim Agan to ChemChina and the transfer of production lines to China at the expense of 1,500 jobs in Israel. However, the Histadrut formed an agreement with the management at the end of October, according to which 200 veteran workers will be given early retirement under favorable terms within a year while the jobs of the rest will be assured until the year 2017.
The agreement ignored the expected sale to the Chinese company and the certain transfer of production lines to China, where the costs of production (in other words, wages) are much lower. But the agreement does refer to the possibility that the factories will be closed and the workers dismissed. In this case, a fund of NIS 36 million will be set up for worker welfare.
The significance is clear: In 2017 – the end of the agreement period – the Chinese company will be free from any obligation to operate the factories and employ the workers in Israel. In one stroke more than a thousand jobs in the southern district, already suffering high unemployment, will disappear, thanks to the "generosity" of the Histadrut which pandered to the current workers so they would agree to the destruction of the future job market.
Following in the path of Amir Peretz?
In 2005, then Histadrut chairman Amir Peretz surprised everyone and was elected to lead the Labor Party. His election raised expectations on the left. But the hopes for a social agenda quickly faded. Peretz joined Olmert’s coalition as Defense Minister, which ended in the brutal and unnecessary second Lebanon war. After less than two years in this role, while the government he joined continued the neo-liberal policies of Netanyahu, Peretz was forced to give up his position to Barak.
Eini adopted a different tactic. Instead of the vociferousness and strikes that characterized Peretz, Eini prefers good relations with capital and the tycoons. When he serves their interests and prevents cost-of-living supplements, when he manages to quietly fix the sale of a company like Makhteshim Agan, he proves his skills as a smooth public leader who knows how to sell his goods.
His closeness to the Netanyahu government shows that Eini has no significant reservations about the prime minister’s policies, and that all he asks is personal promotion within the existing coalition.
In the well-oiled system Eini has built for himself as head of the Histadrut, we easily lose sight of the real interests being served and the direction he is leading – do all these maneuvers serve the workers or capital? Eini no doubt believes there is no contradiction, and that his art is in finding the common ground. In fact, as we have seen, this “common ground” is the territory of the tycoons, who repeatedly succeed in setting the agenda which Eini accepts as given.
The bottom line is unequivocal: in the choice between supporting the workers and supporting Netanyahu’s government and its policies, Eini is failing in his duty while taking care of his own future. The recent wage agreement shows that his main concern remains the stability of the government and the coalition between Likud and Labor, which he is willing to support at the workers' expense.
Details of the public sector wage agreement
The public sector wage agreement, signed early on Tuesday Nov. 2 by the Chairperson of the Histadrut Ofer Eini and Finance Minister Yuval Steinitz, prevented a general strike declared by the Histadrut. The wage agreement for 2009-2012 determines wage increases and other benefits for workers. The Histadrut in return promises industrial peace for two years.
The agreement includes a wage increase of 6.25% for all the workers. The supplements will be paid from January 2011 each year. For the years 2009 and 2010 the Finance Ministry will pay a one-off sum of NIS 2,000 per worker ($1.00 = 3.6 NIS). Female public sector workers with children under the age of 5 will receive a wage supplement of NIS 300 per month for the first child and NIS 200 per month for the second child. An additional paragraph determines a gradual increase in pension payments by public sector workers, such that by 2013 the payments will reach 19.5%.
Translated from the Hebrew by Yonatan Preminger