Doctors, Teachers Could Suffer Wage Freezes for a Year

Doctors, teachers, university lecturers and other public-sector employees can expect their salaries to be frozen for a year if the government approves a proposal by Finance Ministry wages and labor relations director Ilan Levine.

It will be up to the next prime minister and finance minister to decide whether to fully or partly accept the proposal - which was prepared over the last few weeks in response to the tax revenue crisis and the large budget deficit expected - or to reject it outright.

If the government wants a wage freeze in the public sector, it can expect a confrontation with the Histadrut labor federation and the state employees union, and even more serious resistance to planned wage cuts. Histadrut chairman Ofer Eini has already told Prime Minister-designate Benjamin Netanyahu that he would object to any proposal that would jeopardize the wages of public-sector workers.

The Finance Ministry argues that a yearlong wage freeze in the public sector, which would include the suspension of recent agreements with doctors, university lecturers and teachers, would save state coffers NIS 3 billion, two-thirds of which comes from the suspension of automatic wage increases based on seniority. A decision in favor of (staggered) salary cuts would save an additional NIS 3 billion. For the state, that means a substantial addition to the budget.

The wage freeze requires the support of the entire government, and is doomed to failure without such support, Levine said.

"These things need to be carried out through discussions with the Histadrut," he said. "These are not simple matters, but they are possible."

Levine said if the Finance Ministry were to accede to a demand that it not touch the salaries of the 56,000 state employees, 20,000 of whom work in state hospitals, the government would also be unable to make any changes to the higher wages of the 400,000 to 500,000 public-sector employees like doctors, university lecturers and defense system employees, because the state employee wages are linked to those of the public-sector workers.