Doing less than the minimum
By Ruth Sinai
Haaretz, December 26, 2004
The sound of tongues clucking could be heard last week across the land. Industrialists, contractors, rabbis all shook their heads in amazement and outrage in light of the harmful working conditions of the weak employees in the country. In a farewell confession, Oded Tyrah, outgoing president of the Manufacturers' Association, admitted that 40 percent of employers pay their employees less than the minimum wage laid down in law. Waste removal and security-guard contractors admitted (in an interview to Haaretz) that they are underpaying their workers. Rabbis gathered in Jerusalem to call for a boycott of businesses that exploit their employees. Businessmen belonging to the M.A.L.H. non-profit organization are meeting in Tel Aviv to discuss how to promote social change through an ethical code as a business strategy.
Some of these people really do want to bring about social change, but others do not come with clean hands. Some of the rabbis in the Ma'agalei Tzedek organization look after banquet hall employees who earn less than the minimum wage, but they also support settlements that dispossess Palestinians. The industrialists want their employees to make the minimum wage, but no more; they are vehemently opposed to the demand of the Histadrut labor federation to raise the minimum wage.
The industrialists have no cause for concern. The last thing the government intends to do is to support raising the minimum wage, even by so much as one agora. Not only does the government back the current minimum monthly wage of NIS 3,335 as payment for a full-time job; it is also warning - based on supposed research findings - that raising the minimum wage will cause businesses to collapse, bringing in its wake massive dismissals of employees. It turns out, however, that the top free market economists in the United States do not agree with these findings, as evidenced in a recent petition that was signed by 550 economists, including some Nobel Prize laureates.
The Finance Ministry was pleased last week at the modest decline in the unemployment rate. Good news, indeed. However, contrary to the promises of Finance Minister Benjamin Netanyahu, the reduction of unemployment will not diminish the scale of poverty. Not only is the minimum wage more than NIS 1,000 less than the poverty line for a family with two children, but it is universally agreed that many more employers than the 40 percent cited by Tyrah do not pay it. The owner of a large security firm estimates that about 100,000 security guards are getting NIS 5,000 to NIS 6,000 a year less than what they should be earning under the law. If they were paid what's coming to them, some of them would certainly rise above the poverty line.
If the private sector, at least, is upset at the non-enforcement of the law, the government, whose duty it is to see to the welfare of the country's citizens, is silent. And it has good reason for that posture. As the largest employer in the country, taking together local government and public institutions, it is in large measure responsible for the exploitation of the workers. In issuing tenders for public services, it encourages its ministries, with a wink, to choose the lowest price even when it's obvious that the per-hour wage being offered by the prospective supplier is below the legal minimum. A tender published last week for cleaning work at the Bank of Israel stipulates the payment of the minimum wage as the only threshold condition, without any mention of the social-security elements which are mandatory under the other protective laws and under the collective agreements that apply to this industry.
Not only is the government encouraging, by deed or omission, the payment of illegal wages to workers, in the past two years it has also weakened the Minimum Wage Law in legislation by qualifying the clause that prohibited government ministries from entering into contracts with companies that violated the law. In addition, it barely enforces the existing law, either. The Ministry of Industry, Trade and Employment has set up an enforcement directorate, but when 22 inspectors are supposed to protect 2.4 million employees it's clear that true enforcement is not going to happen.
The state is in the wrong several times over when it refuses to even consider the idea of raising the minimum wage: Firstly, by refusing to set threshold prices for the many services it has privatized over the years, thus knowingly harming the workers; secondly, by refraining from enforcing the labor laws and thereby abandoning those who need them most to their fate; and thirdly, by slashing the social-security allowances and support that make it possible for these workers to survive in impossible conditions. The government is right to encourage people to work instead of being dependent on the allowances, but to send hundreds of thousands of people to fight for their survival in an arena in which the government itself sets rules of the game that work against these wage earners is both cynical and immoral.
