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The new chairman of the Labor Party, Amir Peretz, has managed within two weeks of being elected both to put the issue of poverty near the top of the party's agenda and to create for himself an image of the greatest fighter around for social issues.

In the past several years, as chairman of the Histadrut labor federation, Peretz has indeed taken an active part in fighting for workers, but we must not ignore the contribution that he and his people have made toward creating a separate status for the employees of manpower companies.

It is true that he repeatedly protests against these companies and even introduced a bill to require employers to treat workers from these companies as regular employees after nine months, but his biggest supporters - the largest trade unions, including those of the banks - were those who created the second-class status of contract employees and employees of human resources companies in the first place.

Take, for example, the banking system, which employs more than 35,000 in addition to a few thousand contract and outsourcing company workers. The banks' collective bargaining agreements are among the toughest in the country. The managements of some banks were unable to transfer workers between departments without the union's permission. This lack of managerial freedom led to terrible inefficiency.

But the bank managers' desire for bonuses based on profits forced them to become more efficient. How? By implementing voluntary retirement and sending home workers with monthly salaries between NIS 20,000 and NIS 50,000, then hiring contract and personnel company workers for NIS 3,000 to NIS 5,000 a month with none of the benefits or job security of bank employees.

This led to a three-tier system: the managers, who take home NIS 30,000 or more every month; the regular employees whose salaries are high and who enjoy the backing of the union as well as benefits such as funding for children's educational costs; and an underclass of outsourced workers who are employed as tellers, guards and cleaners for close to the minimum wage in exploitative conditions without proper benefits.

The unions facilitated this development, because it allowed them to preserve their status as labor representatives while keeping their friends in their secure, well-paid bank jobs. The managers benefited because their bonuses increased as the banks became more efficient.

This was the deal: the union let the management create a category of second-class workers at starvation wages, and in exchange the regular employees received job stability, high wages and good conditions that improve from year to year. The union sacrificed the contract workers on the altar of job security and high wages for regular employees and bonuses for the managers.

Amir Peretz was carried on the backs of these unions, which together with the managers and owners of the banks created the inferior and despised category of contract workers. Their contribution to increasing poverty is greater than that of former finance minister Benjamin Netanyahu.