I don’t understand why National Insurance Institute Director General Meir Spiegler is being so mean to us. He recently proposed shortening the work week to four days, and it’s unclear why he didn’t suggest that we reduce it to three days or even fewer.
He says shifting to a four-day work week will “accelerate the wheels of the economy and lead to greater welfare.” So why not reduce even more? Wouldn’t the wheels of the economy turn even faster, and welfare be even greater?
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Perhaps he’s unaware, but the idea of a shorter work week is nothing new. In the last 20 years, many populist politicians have put it on their agenda. However, none of them ever reached the same populist heights as Spiegler, who proposes working one day less but without increasing the number of work hours in the day or lowering wages – a magical solution that is wholly untenable.
Spiegler also proposes that employers increase their number of workers by 20 percent so that output won’t decline. And this is so absurd and so crazy that you have to fearfully ask yourself: This is the man who oversees the NII’s tens of billions?
Every factory, shop and business in the private sector tries to save as much as possible on expenses. They have to contend with fierce competition from other local businesses, importers and – if they export their product – from the whole world. And suddenly they’re supposed to take on a 20-percent increase in salary expenses! The result will be a business sector that suffers heavy losses, to the point of bankruptcy.
Also, as soon as we all are working less, GDP will go down and so will the standard of living. Because the reason for the rise in GDP and our standard of living in recent years (until the coronavirus hit) was more workers providing more work hours. This is the source of our growth. So why wreck it, of all things?
Spiegler also does not understand that a worker receives a wage in accordance with the value of his marginal output. So if he works less, he will produce less and his wages will decline. Spiegler’s assertion that wages will not decline is nonsense. Spiegler can do this at the NII, because this is public taxpayer money, but in the private sector, one has to make a profit, so wages will certainly go down in a thousand different ways, and the ones who will be hurt the most are society’s weakest, who have no bargaining power with which to avert the loss of pay.
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To complete the magical thinking, Spiegler says that on their extra free day, workers “will go out more and consume more” and this will lead to growth. But this, too, is nonsense. Growth occurs in exactly the opposite way. It comes from an increase in investment, not an increase in consumption. Moreover, consumption is not determined by the number of vacation days, but by the level of income, and as when that goes down, so will consumption.
But why am I surprised? Spiegler is a populist. He is always in favor of giving out more. When Finance Ministry officials explained that unlimited unpaid leave would cause workers not to return to work, he railed wildly against them. When Prime Minister Benjamin Netanyahu and Finance Minister Israel “Herod” Katz decided to distribute grants to every Israeli, including Shari Arison, Israel’s wealthiest woman, he enthusiastically supported them.
Shortly before the election he also came out in favor of Bibi and Herod’s plan to distribute another 15 billion shekels – blatant election bribery, contrary to the professional recommendations of the Finance Ministry.
Throughout the period of the coronavirus crisis, Spiegler was Bibi and Herod’s loyal helper in squandering public funds. But this is not surprising either. Spiegler is a Likudnik. He was a member of the party’s central committee until 2001, and he was appointed head of NII by the grandmaster of political appointments, former Welfare Minister Haim Katz. So I also won’t be surprised if Bibi and Herod soon come out with a “new plan” to shift to a four-day work week. But why stop at four? Better not to work at all.