Why do contractors prefer foreign labor?
From the contractors' point of view, foreign workers are a boon: numerous,
cheap, and unorganized (that is, they can treat them as they please). They
point out that foreigners amount to between ten and twelve percent of the
work force, no more than in other developed lands. The problem, they claim,
is illegal workers, and these they would deport.
The truth is different. Turks in Germany or Pakistanis in Britain chose
to immigrate to those countries, where they are free to seek jobs. In contrast,
foreign workers come to Israel in groups organized by personnel companies,
to which they have indentured themselves. Before ever seeing a job site,
they are deprived of their passports. (This deprivation is illegal, but
no one enforces the law.) They arrive in debt, having paid thousands of
dollars for the privilege of working here.
(These payments too are illegal, but no one enforces the law.) On average,
for instance, a Chinese construction worker pays $8000 to a contracting
firm in China in order to receive a permit to work in Israel (Yediot
Aharonot April 19). Many mortgage their homes and lands to raise
the money, thus becoming hostage to their bosses. Nowadays, upon arrival
in this stalled economy, they often find that the jobs for which they paid
do not exist. These are the modern slaves, whose function – whether they
know it or not – is to break the Israeli labor market.
The money that foreigners pay for the privilege of working here goes
into various pockets, including (if past evidence is to be trusted) those
of contractors who secure the permits and those of bureaucrats who grant
them. (See Challenge # 68, "The
Arab Worker in the Era of Globalization". )
Largess from the sale of jobs, however, is only the first of many golden
eggs. In a recent interview, Economics Professor Zvi Eckstein (University
of Tel Aviv) told Challenge that a foreigner doing basic construction
costs his employer, on average, $5.00 per hour, while a local worker costs
$7.00. In the course of a year that amounts to a saving of $4800 per foreigner.
For example, a contracting firm known as A. Arenson employed 400 foreign
workers for eight months at a project in Migdal ha-Emek, along with 12
local workers whom WAC helped to place there. After comparing the wages,
WAC concluded that by using the foreigners, Arenson saved five million
shekels (more than a million dollars) in that short period.
Background
The year 2001 was Israel's worst, economically, since 1953. Industrial
production shrank by 5.7%. The deficit rose above 3% of GDP (the benchmark
established by the European Union as the maximum for a healthy economy).
After five quarters of negative growth, the country had its highest-ever
level of unemployment (10.2%). Yet 74,400 foreign workers entered the country,
an increase of 43% over the number in the year 2000. (See "Israel's
Economy in Trouble," Challenge # 71.)
On December 31st 2001, the Israeli government took a bold decision:
to cut the number of permits for the import of foreign construction workers
from 45,000 to 23,000. It also decided to cancel at once the permits of
27,000 additional foreign workers.
In taking these measures, the government seeks to put the local jobless
back to work. It wants to reduce the amount it doles out in unemployment
compensation and welfare, while diminishing the social pressures that grow
when people are idle.
In the background is the memory of October 2000, when the Arabs in Israel
joined the new Intifada. They were motivated not only by solidarity with
their kin in the Occupied Territories, but also by their own particular
misery: unemployment rates in their localities had topped 20% – twice the
national average – where they remain. A major cause was the import of low-paid
workers from Romania and China into construction, which had been a principal
source of Arab employment.
Key figures in the then ruling Labor Party saw the connection. Fearing
a renewal of the Arab revolt, they refused to grant additional permits
for foreign labor. ACBI petitioned the High Court to lift the ban. The
government caved in, granting the contractors most of their requests.
Now the fight is on again, only this time all can see that the country
is in deep economic trouble. After the government again cut the number
of permits, ACBI appealed once more to the High Court.
The Need for Decision
On the face of it, the government's decision to restrict the import of
foreign labor is indeed a bold one. Unfortunately, it has not gone into
effect. PM Ariel Sharon has even increased the quota of foreign agricultural
workers.
As for construction, ACBI's petition to the High Court forestalled implementation
of the decision. On January 9, 2002, the government agreed to postpone
cancellation of the 27,000 permits – at first until the end of February,
and again until the end of April.
In its High Court petition, ACBI outlines an alternative program, which
it has offered the government, aiming toward a gradual reduction in the
number of foreign workers: "ACBI recommends that employers in the construction
sector be encouraged to hire Israelis. Methods should include a rule that
they employ only Israeli workers in governmental and public projects; also,
employers who participate in programs for absorbing Israeli workers ought
to get priority in the allocation of [permits for] foreign workers." ACBI
promised to take part with the government in implementing the program;
it also agreed to a broad cutback in the number of foreign workers, "to
the extent that Israeli workers do indeed enter the building sector."
What do the contractors mean exactly when they speak of a "gradual reduction"?
Are they serious? Or is this a ploy to ward off the bold decision to cook
their golden-egg-laying goose? We may find the answer in an exchange between
two rival figures in ACBI.
The Hebrew daily Ha'aretz published, early in March, a letter from ACBI
Vice President Yitzhak Cohen, attacking the position of its president,
Shmuel Ulfiner. According to Cohen, Ulfiner seeks to maintain the supply
of foreign workers, failing to recognize the heavy social and economic
problem they cause.
In response (Ha'aretz March 14), Ulfiner claimed that ACBI
"has designed a new program to encourage Israeli workers to enter the sectors
of building and infrastructure. We have decided to absorb Israeli workers
in proportion to the number of foreign workers. Thus, for every hundred
foreign workers, one Israeli will work." A simple calculation shows how
sincere the contractors are: 45,000 foreign workers are employed in construction
today; ACBI would be committing itself, on its proposal, to bringing in
450 Israelis.
The government cringes before the contractors. It cannot withstand the
pressures, nor has any government managed to do so since 1993, when the
import of foreign labor began. In a television interview on Israel's Channel
One, the Minister of Labor and Welfare, Shlomo Benizri (Shas), described
these pressures, as well as the bribe offers made to ministers and Knesset
members. According to him, governmental weakness derives from three sources:
the money that contractors funnel into the pockets of policy makers, chronic
indecision at the top, and the priority given to personal interests.
The Histadrut (national union) of Construction Workers avoids all involvement
in the confrontation concerning the import of foreign labor.
WAC stands out, therefore, as the only organization that has taken up
the task of bringing Arab workers back to the building sites. The country's
largest contractor, Solel Boneh, already employs fifty workers organized
by us. Although we are not yet large enough to encompass the entire problem,
we believe we have started a significant process, which may finally compel
the government to enforce its decisions. n
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