The Bottom Line / Damage Control

MK Amir Peretz easily won the populism crown this week. For years, the Histadrut leader has held the stick at both ends.

MK Amir Peretz easily won the populism crown this week. For years, the Histadrut leader has held the stick at both ends. One time he talks about the social danger inherent in unemployment, another time he initiates populist bills that would lead to layoffs and unemployment - and he sees no contradiction between the two. Last week, he met with Prime Minister Ariel Sharon and threatened that if his demands are not met, his two-member Knesset faction would leave the government on January 1, 2002. This empty threat scared Sharon who agreed - with the consent of Finance Minister Silvan Shalom - to remove from the Economics Arrangement Bill the item that would postpone the requirement for companies to absorb fully their temporary workers.

The problem of personnel management was created by the "tenure system" the Histadrut and labor councils imposed on employers. The result was that managers could not fire or transfer workers, even if the nature of the work changed, the employee was negligent or the economy entered recession. The employer had no flexibility in managing human resources and this led to inefficiency and losses. The solution that provided this required flexibility was the establishment of temporary placement firms. And now Peretz wants to go back and force employers to absorb temporary workers into the ranks of tenured employees. The treasury's Budgets Division realized that if the law remained in force, the employers would end their contract with temporary workers before they completed nine months on the job. These workers would be laid off or forced to move on to a new employer. Therefore, the treasury proposed freezing implementation of the law for one year. But Peretz opposed this and Sharon and Shalom buckled under. The result is that in February-March 2002 we'll see many layoffs among these temporary workers and unemployment will rise.

This double line has characterized the activities of Peretz for years. The same thing happened in the case of the Minimum Wage Law. Factories have recently been shut down and many workers have been left jobless due to the increase in the minimum wage. Ramzi Halabi, the head of the Daliat al-Carmel local council, recently stated: "The entire Druze sector is prepared to forego the recent 10 percent increase in the minimum wage in order to prevent the closing of factories. There are many employers who are ready to hire people at salaries below the minimum wage, and there are workers who agree to this, so why don't we adjust ourselves to the facts on the ground?"

There should be no mistake here. It is worthy to lobby for an increase in the minimum wage, and it is also worthy to work to improve the employment conditions of temporary workers. But this should be done wisely, through negotiations with employers while considering the state of the economy and its industries in an incremental and prudent manner. Not in the brutal way of populist legislation that only leads to more layoffs and suffering.

But when unemployment rises in March 2002, Peretz will lead the cry against the government, the ministers and treasury officials, who "don't do anything to lower unemployment." He himself does something. But only damage.