Rachlevsky Is Just Another Bureaucrat, Deputy Governor Says

The manager of one of the most important departments at the Bank of Israel earns less than his secretary. This was revealed by Avia Spivak, the deputy governor of the Bank of Israel, as part of his explanation of the problem of wages at the central bank, where seniority and length of service are the major factor in determining salaries at the bank.

Anyone who expected Spivak (who was forced on Governor David Klein, as an outside appointment) to attack the bank's salary excesses will certainly be disappointed. Except for the story about the secretary, Spivak finds it very difficult to find any other problem with the wages of the bank's senior officials, including his own.

However, he said: "There are too many people whose wages are too high for their position because of their seniority. The secretary, for example, or the famous librarian. The seniority factor creates absurd situations, and this must be changed. The salary structure in the Bank of Israel must be changed, including the ability of the management to use wages as an incentive; but it is unacceptable for the treasury's wages director, Yuval Rachlevsky, to do that," explained Spivak.

Why not?

"Because he is just another bureaucrat," says Spivak.

Just another bureaucrat? He's the treasury's wages director. He sets the salaries for the entire public sector.

Public council should set budget

Spivak has a lot of bad things to say about Rachlevsky, and in particular he does not want him to be the one who sets the wage scales for the bank. Instead Spivak recommends, as part of the proposed law for the Bank of Israel, that the bank's budget remain independent and be set by a public council.

"Changes need to be made in the salary structure of the bank, and they must be done through a public council, as part of a reasoned and gradual process, and not by a bureaucrat in the treasury," he said. "We haven't seen that this clerk has done his work particularly well, according to his own annual reports on wages.

"The governor has already stated this, and no one listened to him: there is no coherent wage policy in the public sector. While the bank is attacked for paying exceptional wages to its employees, it is not at all clear what are not exceptional wages. According to what salary is the Bank of Israel supposed to toe the line?" Spivak said.

In spite of that, he is till the wages director.

"Rachlevsky has no wages policy, and he is suffering from built-in conflicts of interest. The treasury is interested in paying as little as possible, while at the same time it has to worry about the quality of the public sector. This doesn't go together. A public council will also see the Bank of Israel's interests, too, when it sets the salary levels. Do you think Rachlevsky thinks about the Bank of Israel? Do we want him to run the bank? It's not as if people think that he has done such a great job as the wages director."

Spivak suffered from a particularly cold reception within the bank. For months David Klein, ignored him for all practical purposes, and even after the freeze ended, he was not included in the workings of the bank. He was offered only marginal jobs. It was assumed that Spivak had his fill of the bank and its management, but there is no trace of it in his statements, in fact quite the opposite.

"The Bank of Israel is an asset to the state" he lectured excitedly. "That is the way it is all over the world and also in Israel. The problem in this country is that the bank is a professional institution that belongs to the public sector, while the entire sector is under attack. It is a shame that the Bank of Israel's assets will be destroyed within the framework of this general attack. For example, the bank has important contacts with central banks overseas. There is an ethos of cooperation between central banks, which helps us greatly in acquiring information and learning new topics quickly. We were able to learn the issue of upgrading the payments system completely from scratch because of this help. This is an incalculable asset."

Mortal threat

Is there anyone who disagrees with that?

"It's a fact, there is now a High Court case against the bank, and if Rachlevsky wins, the salaries at the bank will drop by tens of percent; and this will mortally wound the bank. This is a huge threat to the central bank," Spivak explained.

The Bank of Israel's budget, according to Spivak, is NIS 500 million a year. This sum employs 800 workers including "about 100 computer employees," he said. In spite of the enormous cost per employee at the bank, Spivak enthusiastically defends their wages.

"The gap between experts and managers in the public and private sectors is growing. If we want quality employees to work in the bank, for their entire careers, in order to benefit from their knowledge and international contacts, then we have to make them feel that their sacrifice of work in the private sector is not impossible."

A ceiling of NIS 30,000 a month, the same as the salary of a director-general of a government ministry, is not enough? Why do the senior officials of the bank need to make NIS 50,000 or more?

"It could be that this is enough, and I am not saying that there is nothing to fix in the wage scales at the bank. In fact, the governor tried to make changes and failed, because he wasn't supported in his battle against the workers in the bank. Nevertheless, after we saw the salaries of the employees of the Defense Ministry, according to Rachlevsky's own report, we can put our own salaries into perspective.

What is your salary?

"The same as a department manager in the Bank of Israel."

In other words NIS 50,000 or more?

"I said, the same as a department manager."