Israel’s Public Sector Is Getting Fatter, Despite Netanyahu’s Ideology

Young people understand this particularly well; the race to public-sector jobs is intensifying.

Nehemia Shtrasler
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In February 2006, Benjamin Netanyahu published a 36-page booklet in which he explained his socioeconomic outlook. He explained how he led the program to rescue the economy in 2003 and cited his “fat man and thin man” parable, which has become his trademark.

The parable describes the fat public sector that sits on the shoulders of the productive private sector. And because the public sector has become fatter over the years it urgently needs downsizing to prevent the collapse of the productive private sector, and with it the entire economy.

This week the public-sector salary report was published, painting a gloomy picture: The fat man has become even fatter, while the thin man remains skin and bones.

In real terms, wages have increased 9.2 percent in the past 10 years in the public sector, compared with 2 percent in the private sector. As a result, the average salary in the public sector has surpassed that in the private sector. And don’t forget the permanency of jobs in the public sector compared to the job insecurity in the private sector, and the superior welfare benefits in the public sector. Israelis get the message: It’s worth working in the public sector, not the private sector.

Young people understand this particularly well; the race to the public sector has intensified over the years. According to the Bank of Israel, in the past year and a half the number of jobs has only increased in the public sector. In the private sector, the number hired has been equal to the number fired. That’s a resounding failure for Netanyahu’s strategic program.

Some people don’t understand the big change going on. They don’t realize that in the public service people earn more and work less. They refuse to understand that the average salary in a government ministry now totals 15,000 shekels ($4,300) a month, not including the employer’s payments for pensions, continuing-education funds, provident funds, courses and other benefits. Employees of Channel 1, the public television channel, already earn more than their colleagues on private channels 2 and 10.

Meanwhile, the average teacher’s salary is 11,200 shekels a month, not 5,000, as they have claimed, the salaries of nurses and doctors have increased significantly, and an army major earns 19,000 shekels a month while a police superintendent earns 22,000 shekels a month. I’m deliberately omitting the numbers for the top earners – at the ports, the Israel Electric Corporation, the Bank of Israel, Rafael Advanced Defense Systems, and the doctors.

The sad thing is that private-sector employees don’t realize they’re the ones paying for the public sector’s great bonanza, through excessive taxes. Some don’t even know that when they read that 33 percent of ministry employees receive “a minimum wage supplement,” these employees earn more than 4,300 shekels a month. They earn far more (11,260 shekels a month) thanks to national wage agreements, industry-wide agreements and a raft of salary add-ons.

Those private-sector employees are also unaware that in these cases concerning ministry employees, money is set aside for pensions or provident funds, and for some employees for continuing-education funds and social-welfare benefits. The Histradrut labor federation prefers that these agreements be “exceptionalized,” as it’s called, when calculating the minimum wage, so a distorted picture can be presented to the public.

None of this shtick exists in the private sector. There people work much harder for many more hours, with lower salaries and without employment security. This dangerous situation has been deteriorating over the years. The fat man is getting fatter and the thin man will soon collapse – do you hear that, Prime Minister Netanyahu?

Prime Minister Benjamin Netanyahu. He should ponder lower salaries for the public sector. Credit: Emil Salman