Doing the minimum
By Ruth Sinai
Haaretz, December 23, 2004
There's a new fad in Israel: business executives repenting, admitting that employees are shamefully exploited and demanding that something be done about it.
Witness the security and maintenance contractors (as published this week in Haaretz). Witness the Manufacturers' Association.
The one supposed to do something about it is the state. For example, Oded Tyrah suggested the government establish a police force, like the one responsible for deporting foreign workers, to enforce the minimum wage law (the same government the manufacturers want reduced, its services privatized and its nose kept out of the business world).
In any event, an economic police already exists, set up this year at the behest of the treasury to deal with people who fraudulently obtain National Insurance allowances. Its mandate was expanded to cover economic crime, but this police force doesn't tackle minimum wage offenders and the state is failing in its duty to enforce the law. A force of 22 is tasked with enforcing all labor laws and protecting 2.4 million workers against exploitation.
Tyrah's revelation that 40 percent of employers break the minimum wage law is overly generous to employers. According to various assessments, between 50-70 percent of employees who are supposed to receive minimum wage do not.
Dr. Daniel Gottlieb, a senior adviser to the Bank of Israel governor, has reviewed the situation and found that minimum wage law offenses are particularly rife in small businesses, with the victims commonly being foreign workers, Arabs and women.
The manufacturers' confession has a single purpose - removing the spotlight from the Histadrut labor federation's demand to raise the minimum wage to $1,000 a month. The manufacturers oppose any increase, even though minimum wage is at least NIS 1,100 lower than the established poverty line for a family with two children. The minimum wage level does position Israel midway on a list of 20 countries with minimum wage laws - after Japan, the United States and Western European countries; ahead of Spain, Korea and Turkey - but the percentage of minimum wage earners in Israel is among the highest on the list.
According to National Insurance Institute figures, some 12 percent of full-time employees and 32 percent of all employees earn minimum wage. Nonetheless, Tyrah claims that the wage is already too high and does not enable companies to compete with employers who moved production to China or India, drastically reducing wage costs. Israeli employers, struggling to keep up, are already failing to comply with the minimum wage law, Tyrah charges; if forced to raise wages, noncompliance will only increase. In short, blame the Chines.
40% increase in chronic unemployed
By Ruth Sinai
Haaretz, December 23, 2004
Among registrants at employment bureaus last month, the rate of those who had been jobless for a year or longer grew to 76,200, or 33 percent of registrants. The number of unemployment veterans has skyrocketed 40 percent since January, when they numbered 54,200, or 23 percent of registrants. This means that every third registrant has been unemployed for more than a year.
The overall unemployment rate dropped from 10.7 percent in September and October to 10.2 percent in November, but the number of registered unemployed people remained virtually unchanged at 230,000.
The Employment Service said yesterday that the increase in hard-core joblessness is the most worrisome problem in the labor market. The service is determined to deal with this phenomenon as its strategic goal for 2005, according to Dr. Tamir Caspi, adviser to Employment Service director general Esther Dominicini.
Service officials are also trying to ascertain the reason for the dramatic growth of this group, which until three years ago represented less than 10 percent of the unemployed. Its continued growth is especially striking since the number of unemployed who receive guaranteed income allowances has stabilized, from an average monthly rise of 5 percent in 2003 to a rise of 0.1 percent in the past five months.
Currently, the hard core constitutes 52 percent of all guaranteed income allowance recipients who register at employment bureaus. About 40 percent of these unemployed are designated limited in their ability to work.
The National Employment Service won't be contending alone with "chronic" joblessness. Four foreign companies and their Israeli partners won a government tender last week to begin operating an experimental project in June for getting these people back to work.
