Taking Stock / Ineffective Ripples

The treasury's wages report released Monday was the tenth of its kind. Yet all it seems to do is spark a fuss in the media for a day or two, then subside. The annual reports by the treasury's wages director, revealing excessive and illegal pay practices in the public sector, has changed nothing. No norms have improved, nobody is storming the bastions of government demanding it slash its flab. Nor have any structural reforms been imposed to deflate the bloated manpower starring in the report year after year.

The salaries in Israel's public sector are not high. Hundreds of thousands of people receive low, even humiliating, remuneration. That excessive pay is granted to only an isolated few groups working at the monopolies, the authorities and the government corporations, or at various bodies that managed to isolate themselves from the norm.

By definition, public sector pay does not need to be low. Often high pay is justified in order to attract and preserve quality manpower in important jobs.

Which is exactly the problem. Most of the stars in the treasury's report did not achieve their high pay thanks to any extraordinary skills, or due to the public sector's crying need for them. No, they got there by dint of contacts, political or familial, by virtue of the power of labor committees, by plodding tenure, or some other chronic disease of the public sector. Overseers at the Ports Authority get NIS 40,000 to NIS 60,000 a month not because of any unique skill they offer, but because the politicians are afraid to touch them.

Each year, the institutions argue they have to pay well to attract quality people. But the truth is that in many cases, parallel jobs in the private sector would not have paid well at all. Some of the institutions argue they need academics on staff, yet somehow they omit the fact that thousands of academics are jobless and tens of thousands of them crowd the private sector, living on low pay.

Some of the treasury officials are afraid to tackle the issue. Two years ago, the wages director promised us a report on pay in the defense sector. So where's the report? Still being written?

We already know some of the facts. The total wage cost, including early pension payments, of thousands of noncommissioned and commissioned officers is NIS 30,000-60,000 a month. Defense is one of the most bloated mechanisms of the lot, yet the grizzled warriors get handled with kid gloves.

The health funds sport hundreds of managers earning NIS 50,000 to NIS 100,000 a month. They explain that excellent doctors deserve appropriate pay. Well and good. They omit mentioning that many of the doctors run private offices. Some want the government job just to advance their private business. Some doctors actually get paid by more than one health maintenance organization; their reported pay should be doubled to get the real figure.

How do you get lucky, you wonder? The treasury report may not get to the nitty gritty, but the state comptroller's report does. The answer is the nepotism raging at all too many government institutions and corporations. At the Israel Electric Corporation, at El Al, at the Ports Authority and at dozens of places, where plush jobs pass from father to son, from aunt to cousin and friend to friend.

Sometimes the real problem is less the pay, more the hiring practices. Many of the really plum jobs pass straight through the central committees of the political parties.

Insanely high pay makes headlines, but an equally grave problem is concealed unemployment, or senselessly bloated workforces. The local authorities, some of which are so broke they've been withholding the scandalously low pay thousands of workers receive, are paying through the nose for deputy councillors and councilmen they don't need - people who devote most of their time to promoting their political careers and sweetheart projects for cronies.

During 2003, the treasury launched an unprecedented attack on public sector wages. It aimed to slash top pay by 20 percent but had to settle for 10 percent. On one thing the treasury and Histadrut labor federation apparently concur: it's easier to cut back allowances to the poor than pork to the portly.

Yet the one responsible for all these horrible things is the treasury itself. The treasury is responsible for approving the budgets of all government institutions, including the miscreant ones. The treasury allocates billions to covering the tremendous deficits the institutions are running, partly in order to continue lavishing outlandish salaries to top people.

There is only one offender whose budget the treasury can't touch and that's the Bank of Israel. The treasury has no power over the central bank. It is all too symbolic that it's the only one the treasury has seriously attacked over its profligate pay practices.