Outsourcing and Unions / Eini, Repent Your Sins

There's no doubt that subcontracted employees are at the bottom of Israel's labor market, neglected and taken advantage of.

Histadrut labor federation Chairman Ofer Eini's standing began to falter when the Labor Party left the coalition and split into two; and it continued as the nation was swept up in a grassroots social protest that had no connection to the labor federation.

Now, Eini's standing is being put to the test amid the medical residents' protest over their working conditions. Thus, it's no surprise that Eini chose this moment to launch a strike on Monday, with the stated goal of reducing the use of subcontracted workers.

street cleaner - Tal Cohen - 07112011
Tal Cohen

There's no doubt that subcontracted employees are at the bottom of Israel's labor market, neglected and taken advantage of. There's no doubt that there are severe distortions in terms of the way in which subcontractors are used here, with the outsourcing companies remaining with too large a portion of the workers' salaries while the workers themselves are subject to harsh conditions. There's no question that this matter must be addressed.

But wait: If the time has come for soul-searching, maybe we should ask Eini and the Histadrut how this inferior class of workers came to be? How did it come about that corporations and government institutions employ many workers through manpower companies under poor conditions? How did some of the country's most veteran companies come to employ second- and third-rank employees?

The Histadrut and unions play a major role in all of these injustices. For years, they allowed large employers create inferior classes of workers, since this enabled unionized workers to avoid efficiency measures and damage to the employment terms of permanent workers, who benefit from wage agreements and attractive terms.

This was the deal the Histadrut and the unions struck with the employers, a deal based on outsized benefits for permanent employees - including raises during recessions, and total protection from layoffs - that also created a parallel labor class that better resembles a slave market. Here, you'll find poor pay, poor social benefits and no job security.

Subcontracted employees are the creations of the strong unions that were not willing to make any compromises in their name, and were not even willing to look at the invisible people working alongside the permanent employees.

Eini can repent his sins and try to improve the employment terms of these workers; but let there be no illusions: The only way to do this is to allow for more flexibility in labor agreements, which sometimes appear to be detached from reality.