WAC-Ma'an and Organized Labor in Israel

The Workers Advice Center (WAC-Ma'an) was officially established in May 2000, but it had already been defending the rights of workers during the five years prior to that. Many will recall how the Registrar of Non-profit Associations tried to exclude WAC, and how later he tried to close it. The legal attack on the organization, which bordered on political persecution, finally ended in 2006, when all charges were dropped.

WAC is today a central player in Israeli labor relations. From organizing Arab workers in construction, agriculture and the hotel industry, it has expanded to include Jewish workers in communications. It is also in direct contact with government ministries and employers. What then is this WAC phenomenon, and what is its place in the labor movement?

We may preface by saying that WAC aims to build a labor union in addition to—not in place of—the Histadrut. It seeks to protect those whom the Histadrut has chosen to ignore. It would indeed be absurd to claim, under present conditions, that WAC can represent all the workers in Israel. Yet the Histadrut doesn't do so either. Like other traditional trade unions in the West, it has decided not to fight against, but rather to adapt itself to, the structural change undergone by capitalism in the era of globalization and the free market. In Israel, as in many countries, union accommodation to capital (a result of the bribery paid by capital in exchange for union agreement to privatization) has left most workers without representation.

In Israel this accommodation has reached grotesque proportions. Despite the Lebanon War of July 2006, foreign investment rose for the year to $21 billion, an all-time high. The budget deficit for 2006 amounted to less than 1% of production, although the goal had been set at 3%. Israel's economy, in short, is booming, but little trickles down.

Consider this comparison: In 1950 the top decile earned 3.3 times as much as the bottom. Today it earns 21 times as much. Foreign investment merely widens the gaps. The resulting growth concentrates at the top. The official unemployment rate has dropped, indeed, from 11% (in 2004) to 8%. Unfortunately, this has not meant a fundamental improvement for the poor. In recent years there has been an increase in the number of insecure jobs at the minimum wage or less, leaving more workers, not just the unemployed, below the poverty line.

Why does the money not trickle down? The answer is to be found in the structure of Israel's economy. Eighteen families dominate it. They influence the governmental decisions that determine the character of the society. Most of these families accumulated their capital in the same manner as the notorious Russian oligarchs. During the privatization of "socialist" holdings belonging to the government or the Histadrut, they used their connections to take control of the banks, the factories and the public companies. The billions that today flow into the country are not intended to solve social problems but to take advantage of business opportunities.

As capital has increased, so has its political clout. Its influence has prevented the implementation of the "social revolution" promised by all parties during the last elections. In order to bring about such a revolution, the government would have had to channel the growing economy's income into less profitable sectors: the underdeveloped periphery, the Arab population and labor-intensive industries. It would have had to raise wages to a level sufficient to liberate workers from the circle of poverty. Within capitalism, however, goals like these do not promote growth.

Having co-opted the economy, Israeli moguls consider themselves absolved from social responsibility. They export their money. The sole obligation they recognize is to their stock holders. Take for example, the Elite-Strauss merger (an alliance of the Strauss and Federman families). It created a huge company that produces chocolate, dairy products and coffee. More than half the assets are invested abroad, and more than 40% of the firm's production occurs beyond Israel's borders.

What is more, the moguls import cheap labor from other countries, breaking the local labor market. For instance, take Danya Cebus, one of the five largest construction firms in Israel. It is owned by the Africa-Israel group, headed by billionaire Lev Leviev, one of Israel's richest. This company refuses on principle to employ workers directly and pay them full benefits. Instead, it hires only foreign workers or unorganized local workers provided by subcontractors; both lack basic benefits.

A Labor Union for Destitute Workers

Because the traditional union, the Histadrut, organizes only the well-to-do, reality demands the creation of a new current in the trade union arena. This need is not theoretical. In the last decade there has been a meteoric rise in the number of Israeli social organizations; they have brought the plight of the weak before the media, the Knesset and the courts. Such action, however, does not suffice. The need is for a union that will organize these workers. That is the background to WAC's role. For WAC is not another social organization. It does not confine itself to a particular sector or field. WAC presents an inclusive program and a class-based worldview quite different from that of the Histadrut. WAC opens its ranks to all levels of the working class, on the principle that all have equal rights regardless of religion, nationality or gender.

There is nothing in this statement to deny the function of the Histadrut. As a labor union representing the more privileged workers, it has the task of defending them against the employers and the government.

Our basic principles

When we speak of a program or strategy, we are addressing the most fundamental questions: Can workers achieve their full rights within the existing capitalist system or must this be replaced? Do we see ourselves as part of the establishment within Israel? Do we believe that the goals of the state coincide with the interests of the worker? Do we join the consensus that supports the occupation of the Palestinian territories or do we present an alternative? The answers to these questions mark a clear distinction between the internationalist current represented by WAC and the Zionist current represented by the Histadrut.

We treat the interests of the Palestinian workers in the Occupied Territories on the same level as those of the Arab and Jewish workers in Israel. Our commitment to the fight of the Palestinian workers for their work places in Israel is part of this internationalist position. WAC opposes the separation wall and the system of checkpoints, magnetic cards and permits that has made the life of these workers a nightmare.

WAC is also dedicated to the fight of Israel's Arab citizens against the segregated system that has pushed them to the economy's margins. In accordance with this principle, WAC gives priority to Arab workers. Its resources are directed to serve the struggle for true equality.

In accordance with our internationalism, however, we also support the rights of migrant workers. We collaborate with associations that defend those rights. We countenance no walls between workers.

From these principles we derive the goals toward which WAC strives:

The right to work

WAC's first campaign, "A Job to Win," sought to return Arabs to jobs they had lost in the 1990's, when the bosses replaced tens of thousands with unorganized workers imported from abroad. Our demand was to open jobs in construction, restaurants, hotels, agriculture and elsewhere. The employers in these sectors constitute very powerful lobbies, which have a major voice in determining government policy.

There is an essential contradiction here. On the one hand, capitalists demand a market that is open to free competition without government interference. On the other, they demand that the government interfere with the labor market, namely, that it give them permits to import labor so cheap that locals cannot compete. The result is constant government interference aimed at eliminating organized labor as a factor within the "free market."

The persistent claim that Israelis (including Arabs in Israel) "do not want to work" is absurd. In the 1970's and 80's, did Israel have no construction industry, no agriculture, no hotels, no care for the elderly or disabled? Who carried those sectors on their shoulders? Did those who carried them "not want to work"? What change has occurred since then? Only the breaking of the labor market: the fact that people do not want to work, indeed, as slaves. The claim that "Israelis do not want to work" is the government's way of shirking its responsibility to ensure there are fair-paying jobs for its citizens. This elementary obligation, forgotten in the corridors of power, is raised by WAC's representatives at every forum, both within the Knesset and outside it.

In our campaign for jobs, WAC has been able to reach agreements with dozens of companies, thus guaranteeing well-paid jobs for thousands. Our role in organizing workers and placing them has given WAC credibility, making it a leading force in the labor market. It has won recognition as such by the government, the Knesset committees, the Employment Service and the employers themselves. This public recognition has strengthened our ability to organize workers, who see WAC as a practical association that knows how to tiptoe, when necessary, between the rain drops.

The right to a place of work

In the past two decades, a retrogressive form of labor has spread in Israel, introduced by personnel ("manpower") companies and subcontractors. The leader in these modes of employment is the State itself, the economy's biggest employer. The result has been the creation of a large group of workers—about 10% of the total—who are not employed by their places of work, who are shorn of social rights and prevented from organizing. They may be found in construction, security (as guards), cleaning, manufacture, services, clerking—indeed, in all branches. The official figure, we should add, is 5% (still twice that of other western countries), but it grows to 10% when we include the cleaning and security companies.

Another form of retrogressive employment is the use of the personal contract. This method is widespread in high-tech, communications, public relations and banking. The workers in these branches would appear to be close to the sources of economic growth; they enjoy large salaries and good conditions. Nonetheless, they share the situation of those who toil under subcontractors: both methods free the employer from any obligation to the employed, and above all from the obligation to provide job security. In both cases, furthermore, the worker has no right to organize to negotiate better conditions. Media stars and programming engineers tend to delude themselves that high earnings compensate for the lack of job security. If their fortunes change, they have nowhere to turn.

With the tacit agreement of the Histadrut, the government and the other employers have created a nation of flexible, dispensable service providers, whether in the form of TV editors or cleaners.

In the face of this phenomenon, WAC's task is not to improve the personal contracts or correct the illegal behavior of subcontractors and personnel companies. We would not of course object to the implementation of labor laws, just as we don't object when people try to improve their individual contracts. We even engage lawyers to these ends and petition the courts. WAC's more basic, principled struggle, however, is aimed at the complete elimination of these retrogressive methods.

A recent legislative initiative (by the Forum for Implementation of Workers' Rights and Hadash Knesset member Dov Khenin) would require the firm that orders a service from a personnel agency or subcontractor to bear responsibility for the worker's salary and rights. (When a subcontractor provides cleaners to a hospital, for instance, the hospital would be responsible to compensate the cleaners if the personnel company failed to pay full legal benefits.) This is a step in the right direction, but it ignores the principled demand that a worker be entitled to a secure place of work and not be reduced to the status of a temporary service provider. The main focus of WAC's fight is to demand secure jobs, eliminating the need to chase after cheating employers.

The minimum wage perpetuates poverty!

The minimum-wage law, passed in 1987, was intended to establish a threshold defending workers from the effects of retrogressive employment. Laudable though that may sound, the law was an offshoot of organized labor's disappearance. In a well-tempered capitalist economy, wages are determined not merely by the relation between labor supply and labor demand, but also—and essentially—as a function of the bargaining power held by organized workers. When unions betray their principles and desert the workers, the latter are compelled to depend on legislation to protect them during periods of recession and rising unemployment.

The minimum wage became a significant benchmark for us when we conducted campaigns to improve the conditions of subcontracted workers in agriculture. They were making 80 – 100 NIS ($20-$25) for 8 hours' work per day, instead of the 154 NIS required by the minimum-wage law. (The minimum wage has recently been raised to 159.60 NIS per day).

However, after following the case histories of industrial workers and gaining experience in job placement, we came to a new conclusion: the minimum wage has become the maximum wage. No matter which branch we are talking about, or which form of employment—personnel company or other—the minimum wage is the standard. Its gross amount, be it noted, is 3710 NIS (ca. $900) monthly, which is not enough to support a family in Israel. This is, in effect, a starvation wage with the imprimatur of legality. We must relate to it not through a legal lens, therefore, but rather through a social one, as a wage that perpetuates poverty.

During the Knesset elections of March 2006, Amir Peretz turned the minimum wage into the keynote of the Labor Party's campaign, promising to raise it to $1000. Labor became the major partner in Ehud Olmert's Kadima government, but the minimum wage is still very far from the $1000 that was promised. This is not surprising. There is simply no substitute for the bargaining power of the organized worker. The transformation of the minimum wage into a sacred threshold does not empower the worker to improve his earnings in accordance with what he contributes to production. The Ministry of Industry, Trade and Labor has today a mere twenty inspectors to enforce the law nationwide: a joke. But even if the Ministry added dozens more inspectors, these could not replace the power of workers organized into committees at places of employment. Only such organization can improve on the stingy allowance the law provides.

The Wisconsin Plan: Privatization of the Employment Service

In the summer of 2005, the government began to operate, on an experimental basis, a program called Mehalev ("From the Heart"), copied from the Wisconsin Plan first applied in the American state of that name. Supervised by the Ministry of Industry, Trade and Labor, as well as the Finance Ministry, the program treats target groups of the chronically unemployed in four centers. The centers are operated by private companies that have been hired by the state to find them jobs. As the transition to this new structure proceeds, the Employment Bureau will cease to deal with the jobless, who will become the responsibility of the private companies.

From its very first days the program aroused public ire, accompanied by opposition from social organizations. People protested against the draconian measures used by the operating companies, which proved incapable, in any case, of coping with an economy that is not set up to receive unskilled workers who are not in demand (e.g., the elderly, the ill, Arab women and women of Ethiopian origin who are often illiterate).

The Wisconsin Plan exposed the absurdity in government policy. Since 1985 Israel has been privatizing its economy, creating unemployment by importing cheap goods and labor. At first, in order to gain "industrial peace and quiet," it scattered welfare allotments with a generous hand. In the course of time, however, the government concluded it could no longer bear the burden. So now, under the rubric of Wisconsin, it hires private companies, giving them enormous budgets. The companies, for their part, compel the jobless to go out and work at whatever jobs there may be—or lose their allotments. And what jobs are there? Retrogressive labor at minimum wage. In the case of Israel, the Wisconsin Plan has been inserted into a structural contradiction. It can force people to work, but it cannot release them from poverty.

WAC's special role as an organization that places workers in jobs with full benefits— and as an organization that represents the lower sectors, especially Arab workers—puts us in position to see the Wisconsin Plan in its true proportions. WAC opposes the attempt of this plan to treat the unemployed as the main culprits in creating their own misery, while releasing the government from responsibility. Together with the other social organizations, we condemn this approach. But we do not stop at condemnation. We do not propose returning to the old system of welfare allotments and the Employment Bureau. We demand, instead, that the government change its employment policy to encourage people to work, to enable workers to organize, and to create jobs under good conditions, thus making the Wisconsin Plan superfluous.

The right to organize

Poverty is rooted in the lack of an organized working class. If we take the sum of unemployment, non-unionized labor and a low minimum wage, the result is a people in poverty.

The lack of bargaining power is apparent in the enormous gap between incomes. When Israeli workers were unionized, as we saw in the figures for 1950, the gap was slight. The organized worker could demand a salary in keeping with his contribution to productivity and profit. But when the worker is a service provider stuck with the minimum wage, there is an absolute disconnect between his contribution and the employer's profit. The outcome is astronomic growth in the gap between incomes.

Here enters the contribution WAC can make toward changing the balance of power between employers and workers. Where other social organizations act essentially in the area of legislation, seeking to pass laws, get them enforced and, in general, exert pressure on the government, WAC takes on the nitty-gritty task of actually organizing workers. The activities of the social organizations disturb the employers but do not essentially threaten them. Their approach is to represent the law, and, within that context, to represent the workers case by case. WAC, in contrast, represents the workers as a class, organized group by organized group. Although the two approaches overlap at points, the difference is essential. WAC's approach destabilizes the existing arrangements and attacks the source of the problem, namely the system of a free commodities market and a flexible labor force.

A workers' party

We cannot conclude this statement of principles without mentioning the importance of the Organization for Democratic Action (ODA-Da'am), a political party. In order to complete the activity of the labor union, a political framework is necessary. From our participation in Knesset committees, our meetings with government officials and our encounters with decision makers, it is clear that there must be a political arm that can influence Israel's social and economic system. ODA provides a socialist political program that is indispensable for coping with the labor market as described above. WAC as a labor union and ODA as a political party advance a single program.

The capitalist system digs its grave when it increases the gap between classes. Our action occurs within the context of a post-Zionist Israel, which has moved from a framework for achieving nationalistic ends to one for maximizing profits. That is why we find here today a deprived majority and a well-heeled capitalist club. That is why the state has kicked aside the socioeconomic safety net—and with it the traces of a fake solidarity, the pretension that "we're all Jews here." That is why a group of populist oligarchs has been able to transform Israel into a Jacuzzi surrounded by a big soup kitchen.

The change that has taken place before our eyes has led many to despair. They pine for the old days when the state was led by leaders with social-democratic and Zionist principles. We have never believed in those principles, so we do not despair at their loss. We have always regarded them as a racist attempt to establish a rich and privileged entity in the heart of the economically backward Middle East.

Now, however, when the state itself has dismissed Jewish solidarity in favor of globalized capitalism, there is the chance that a new opportunity will arise to advance our political program, which puts faith in the workers, Jewish and Arab, and in their desire to live a life of equality and peace.