The Shekel Drops / The Fiction of the Minimum Wage in Public Service

Every time labor representatives wrassle with the government, the Histadrut labor federation demands that more and more items be exempt when calculating the minimum wage.

It happened three and a half months ago. The time: 4 A.M. The event: Exhaustion. The parties had been negotiating for 12 hours. And then it happened. "You want to cut a deal?" Histadrut chairman Ofer Eini inquired of Ilan Levin, the wages director at the Finance Ministry. "Then don't touch exemptions from the minimum wage."

Levin looked hangdog. Eini had done it again and there was nothing Levin could do about it. He capitulated.

 Ofer Eini - Daniel Bar-On
Daniel Bar-On

What are "exemptions to the minimum wage?" Let us explain.

Four months before, the Finance Ministry published a report on wages in the public sector. A third of public-sector employees were earning less than the minimum wage, the headlines screamed: They were receiving income supplements. If the public sector employed 600,000, that means 200,000 people didn't even make the minimum wage each month.

Is that even possible? Could it be that people who work full time for the government, at local authorities or at the kupot holim healthcare funds or wherever gross less than NIS 3,850 a month? Could it be?

It could not. Let's start with the ministries. They employ 51,646 people, of whom 18,780 receive income supplements to make up the minimum wage.

But a close look finds that they don't actually earn less than NIS 3,850 a month. They earn more. The average wage at the ministries is NIS 8,500 a month and the most common wage is NIS 7,000 a month. Only 943 people actually earn less than NIS 5,000 a month. In the ministries, less than a thousand people earn wages so low they merit correction.

That's because in the public sector a host of extras are paid on top of wages that don't get factored into the calculation of the minimum wage, even though they are perfectly ordinary components of salary. This maneuver is called "exemptions to the minimum wage."

This is how it works. Every time labor representatives wrassle with the government, the Histadrut labor federation demands that more and more items be exempt when calculating the minimum wage. The exemptions include things such as seniority raises, the "13th salary" (a yearly bonus worth one month's salary ), car maintenance, clothing allowance and extra pay for being on alert (called onto the job if necessary ). So you see, a state worker can get all these things on top of his base pay and still be considered eligible for income supplements.

The 5% blanket raise given to all state workers in 2008 was exempted from the calculation of the minimum wage. And in the last collective wage agreement, the 6.25% raise was left out too.

Thus we wind up with balderdash in headlines shrieking about a third of government workers earning less than the minimum wage and needing income supplements, while the real figure is 2.3%. This is where the true struggle between Finance Minister Yuval Steinitz and Eini is taking place.

Earlier this week Prime Minister Benjamin Netanyahu met with Steinitz, Eini and Manufacturers Association head Shraga Brosh. Eini wants the bluff to continue and for extras to continue to be paid to every public-sector worker who earns less than the average wage, not people actually earning the minimum one. Steinitz doesn't. Who will prevail? We shall see.

Naked came the minister's words

Everything in life is timing. If Benny Gantz had been the first man tapped to lead the army instead of Yoav Galant, he'd have undergone the same treatment that Galant did. The papers would have written about the deck he built at his home in Rosh Ha'ayin in contradiction of the law. It wouldn't have mattered that he had dismantled it. Then they would have written about the expenses he claimed when moving and this or that scandal. Either the appointment would have fallen through or he would have withdrawn from the race in shame.

Then Galant would have sallied along. Everybody would want nothing more than to end the saga and he'd have been a shoo-in. The Turkel vetting committee would have tut-tutted that he done wrong, but not wrong enough to disqualify him. The cabinet would have confirmed his appointment and that would be that: Galant would have been the next chief of staff. But as it happens, Galant came first and then Gantz, and that's why Gantz is now the chief of staff.

At the cabinet meeting on Sunday, before Gantz was voted in, Minister Michael Eitan urged that Galant be barred from public office, period. "Serial corrupt conduct like that demands that he be barred from any high-ranking position in the public service," Eitan said, infuriating Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak.

Eitan wasn't born yesterday. He knows that Barak and Netanyahu will try to sew up some cushy job for Galant, as chairman of some giant government company for instance, to "compensate" him. That fact is that Meir Dagan, the former Mossad chief, is about to take over as chairman of Israel Ports. What on earth does he know about shipping and port management?

Be that as it may, Eitan is right. Corruption must be fought wherever it raises its head. Look what happened to the Egyptian economy as rot set in up and down the land.

Netanyahu and Barak are furious with Eitan. They said his words were "sharp." Yes, they were, but they were true. Whistleblowers always encounter rage: They expose their cowardly colleagues in all their nakedness. Eitan was the only one to vote at the relevant cabinet meeting against Galant's appointment as chief of staff. All the other ministers voted in Galant's favor. That's why they all hate Eitan, because it is supremely annoying to see this man who stood firm and was right, while they cowered and went with the flow.

So if his colleagues are furious with Eitan, at least let him receive the support of the people. Let's be grateful for his excellent and courageous service on behalf of the Israeli people. Without his insistence, the Galant affair would have withered and died, and he would have been chief of staff.