Temp Agencies Provide More Jobs, but Pay Workers Less

The average wage of a worker employed through a personnel agency is at the level of minimum wage, and often even less.

The average wage of a worker employed through a personnel agency is at the level of minimum wage, and often even less.

The collective wage agreement signed in February 2004, and extended to the entire sector of contract workers in September of last year, has enshrined the status of these workers as second class citizens.

These are the conclusions of a study written by Dr. Ronit Nadiv and published by the Planning, Research and Economics division of the Ministry of Trade and Employment.

"Even though the agreement sets basic working conditions for the benefit of the employees, it paves a way for cheap employment compared with the amended law for personnel contractors from 2000," the report stated. "The high centralization in the sector and the fact that the large companies are connected between themselves, has made the possibility that workers' salaries will rise above the minimum wage unreasonable."

According to the study, 4.5 percent of salaried workers in 2004 - some 85,000 people - worked for these contractors. Of these, 25 percent earned at the minimum wage level, or even slightly less. Only 10 percent of salaried workers employed "regularly" - not through contractors - earn minimum wage. The gap in salaries remains even when comparing workers by profession or position.

The group of contract workers with the highest salaries are technicians (which also includes various computer workers) and academics. These workers average 26 an hour, but those in professions with a high demand can earn up to NIS 50 an hour.

In second place in salary rankings are professional workers in industrial factories. Following them are clerks, sales representatives and service workers. Lower down the salary scale are unskilled workers, particularly in agriculture, construction and food service. These workers earn NIS 17.93 an hour - or exactly minimum wage - though in practice many earn slightly less.

Israel is one of the countries that has a system of employing workers via personnel contractors, with poorer conditions than other workers; and without employment security. According to the Ministry of Trade and Employment's statistics, such workers in the U.S. constitute only 1 percent of all salaried employees; in France 2.5 percent; in Britain 1 percent; and in Sweden, Germany and Denmark less than 1 percent.

Not only was this rate 4.5 percent in Israel in 2004, but it is also on the rise, according to Nadiv. In 2003 the rate was only 4 percent, with some 75,000 workers employed through contract work. The explanation for the growth in the number of such workers last year seems to be the pick-up in the economy.

These numbers mark a major change over the last 20 years. In 1986 only 1 percent of all salaried workers were employed as contractors, with the record hitting 6 percent in 2000, before the recession and the Intifada struck.

At the same time the number of companies in the field has dropped drastically, by 30 percent. In 1998, there were 380 such companies, while in 2004 the number was only 280.

Today 10 percent of the companies employ 70 percent of the workers in the field. This implies that the vast majority are employed by a handful of companies. While the report does not name names, sources say that the largest firms are: Manpower-Israel, ORS, Tigbor, Danel, Hever, Ortal and Hon Enoshi.

According to Nadiv, the lack of true competition harms the weakest elements of society and keeps their salaries down to the lowest possible levels.