By Lia Tarachansky, The Real News Network – 28 March 2011
Country-wide movement in Israel; second largest gap between rich and the poor in developed world
While the Middle East is undergoing massive national changes, Israel received little attention in global media until last week’s bombing in Jerusalem. But Israel has seen its own share of national struggles in recent months leading to a major labor victory in March. Israel’s massive labor association, the Histadrut, succeeded in taking the worker’s fight to the government, forcing the Prime Minister to acquiesce to many of their demands, including raising the minimum wage. The Real News’ Lia Tarachansky spoke with Avital Shapira from the Histadrut, as well as economist Shlomo Swirski of the Adva Center and Merav Amir from the Coalition of Women for Peace.
LIA TARACHANSKY: While the Middle East is undergoing massive national changes, Israel receives little attention in global media until last week’s bombing in Jerusalem. But Israel has seen its own share of national struggles in recent months, leading to a major labor victory in March. Demonstrations took place throughout the country in protest to rising commodities prices, including housing, gas, and water. Labor strikes have swept over the country. Welfare workers, nurses, prosecution lawyers, foreign ministry employees, and many others refuse to work until their demands were met. Israel’s massive labor Association, the Histadrut, incorporates most of the country’s public sector. It’s taken the workers’ fight to the government, leading to the prime minister acquiescing to many of their demands, including raising the minimum wage. The Coalition of Women for Peace is an Israeli organization that conducts research into various facets of political economy, including the economics of the occupation. The Real News spoke to Merav Amir, the research coordinator.
MERAV AMIR: It’s a wave of strikes going through, you know, from sector to sector. The success of one strike, you know, enables or mobilizes other sectors to strike. But usually what we find, like, with the strike of the social workers now is that by the time the workers organize to strike and to demand their rights and so on, it’s usually about between 10 and 15 years too late.
TARACHANSKY: Is the Histadrut agreement with the government that ended up raising the minimum wage, is that seen as a major labor victory in Israel?
AMIR: Oh, yeah, but that’s–you know how they did that? They didn’t do it by agreeing with the government, by reaching an agreement with the government. They actually did it by bypassing the government.
TARACHANSKY: Histradut is a labor association that represents most of the unions in the country. Though only a third of Israeli workers are unionized, a Histradut general strike would bring the economy to a halt. This was narrowly averted in November, and again in March. When the Israeli minister of finance, Yuval Steinitz, refused to agree to the demands, the Histadrut went straight to the Manufacturers Association of Israel and struck an agreement. The result was the intervention of the prime minister: Benjamin Netanyahu stepped in and acquiesced to many of the demands, including raising the minimum wage. The Real News spoke with Avital Shapira, director of the international department of the Histadrut.
AVITAL SHAPIRA-SHABIROW: Okay. So this campaign, which was jointly organized by [inaudible] Manufacturers Association, the Histadrut, and the union of the mayors of the city of Israel. It was established in order to create a united force against government, and to fight against the rising price and a standstill on the issue of a minimum wage increase. About a month ago, we had signed an agreement between the Manufacturers Association and the Histadrut to raise the minimum wage, and at the same time, the finance minister announced that he will uphold this proposal. Simultaneously, there has been a phenomenon of rising prices of basic necessities, such as [inaudible] water and bread. So as a result, we together, all these organizations, have decided that the government exaggerated and we could not tolerate it anymore.
TARACHANSKY: But not everyone agrees the Histadrut went far enough. Shlomo Swirski is an economist and the academic director of the Adva Center, a Tel Aviv-based think tank.
SHLOMO SWIRSKI: Opinions here are divided on this particular issue. I personally thought that the Histadrut gave up too easily, because when you look at what Bibi Netanyahu actually did, there was a planned hike, prices of public transportation, okay? So when the Histadrut said that they will go on strike, national strike, Bibi said, okay, we’ll take it back, okay, there won’t be a hike in public transportation. In the press conference, in which he appeared to giving in to all these demands, he didn’t go into details, and when you look at the details, it turns out the majority of users of public transportation do not benefit.
TARACHANSKY: Strikes across the board came at the heels of protest against the recent economic changes. While the global recession did not hit Israel hard, the government decided to institute a number of tax cuts, while at the same time raising the consumption taxes or value added taxes, the VAT. Last year, the OACD did an economic survey of Israel and found that it had the second-largest gap between the rich and the poor after the US. Not surprisingly, the poorest population comprises Israeli-Palestinian citizens and the Jewish ultra-Orthodox.
AMIR: We have a feeling that it’s a much deeper phenomenon. It’s not only the rising of basic necessities, but it’s also increasing the socioeconomic gaps in our society. There has been a constant erosion of the middle class in Israel. And we believe at Histadrut that this class has not benefited from the growth in the Israeli economy, only a narrow upper-class elite.
SWIRSKI: Our government, it adopted in the last decade a very, I would say, discriminatory tax reform, okay? On the one hand, we had–beginning in 2003, we had tax cuts which did a lot of good for people with high salaries but very little good for people with low salaries. If you put together high-tech industries and the financial industries, we are talking about only 13 percent of the entire population. They are doing very, very well. But they are sort of a bubble. They are sort of an island within a sea of workers which are doing much less work. Instead of raising more money for the government’s needs from an increase in income taxes, the government decided to increase its income from indirect taxes, and on top of that, imposing higher taxes on gasoline, on cigarettes, and on similar things. Okay? So the tax policy of the government became very–apparently very unjust, very unequal, very unfair.
TARACHANSKY: Last year, the government announced yet another tax cut for high-income earners. While consumption taxes increased, Israel also privatized water, leading to 120 percent rise in prices. At the end of February, gas prices also rose to the record high of 7.3 shekels per liter, or US$60 per gallon.
AMIR: The Israeli political system, while they talk about left and right, there is no political left. Both–from the economic point of view. Both major blocs are pro-neoliberalization policy. So it’s no real opposition to these trends of–have become so dominant in the last–about 15 years or so.
TARACHANSKY: The combined effect of government budgets being slashed for public housing, education, and health care and the increase in tax cuts to the wealthy sent thousands to the streets in protest. While demonstrations only lasted a week, strikes throughout the country continue. And while this labor victory led to the increase in minimum wage, the gap between the rich and the poor in Israel is still among the highest in the developed world.
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