The Bottom Line / In Defense of the Rich

If anybody had any lingering doubt about the utter and complete contempt the state feels for its own labor laws, these figures do away with it.

At this time, when the poorer you are, the more popular you are, allow us to say a word in defense of the rich. To try to defend the idea that although the rich are, ahem, rich, clearly a sin in and of itself, that is no reason to make them the national punching bag.

That is what Labor party head Amir Peretz is doing, though. In fact, that's one of the main reasons he's so popular. Not because his proposals are expected to really help the poor and needy: it's really just that he gives the poor and needy a target for their frustrations. The rich.

Take Peretz's leading popular proposal - to raise the minimum wage. Fundamentally it is a sound proposal with which it is easy to identify emotionally. But there are three problems with it.

One is that the minimum wage law is already being ignored. Employers up and down the land trample all over the law without fear.

Haaretz correspondent Ruth Sinai recently reported that the administration responsible for enforcing the labor laws, founded by industry minister Ehud Olmert two years ago, which is supposed to enforce 20 different labor laws governing 2.5 million workers throughout Israel, has 23 inspectors. Yes, that's 23. Not more.

From January to September 2005, Sinai wrote, the 23 industrious inspectors imposed 200 fines on companies for breaking the minimum wage law. The fines combined were about a million shekels. Yes, a million shekels.

If anybody had any lingering doubt about the utter and complete contempt the state feels for its own labor laws, these figures do away with it.

Peretz can brandish the flag of labor laws, with justice. There is no justification for the lack of enforcement. Contempt for the law can lead to anarchy, especially when the laws in question are sensitive, important ones such as laws protecting the rights of employees.

The way it protects its own laws and workers is a disgrace for the State of Israel. That must change before anybody goes about raising the minimum wage. In the current state of affairs, it would be an empty gesture, and one has to wonder what interests it would serve, beyond the self-promotion ones of the proponent.

The second problem lies in economic justification. You don't need to be an economist to realize that raising the minimum wage could have two opposing ramifications.

The positive one is raising the wage of services workers, such as cleaning ladies who today are disgracefully abused by contractors (yes, including contractors working with the government, yet another sign of the respect accorded to labor laws in Israel).

The negative ramification is that salaries in industry could actually recede, as exporters, companies competing with importers, lose the race to low-labor cost Asia and close down.

Israel's recent history is replete with examples of local textile plants closing down, or migrating to Jordan, Egypt, China and India.

You do have to be an economist to calculate which of these two contradictory effects will be stronger. Before one makes a decision on minimum wages, a comprehensive economic study is required to answer the question. None has been conducted.

The third problem is perhaps the cardinal one. It is the moral question.

By raising the minimum wage, the State of Israel is merely transferring responsibility for improving the lot of the poor from itself to employers. True, among the employers there are rich industrialists who employ hundreds of thousands of people, and it's easy enough to punish them for their temerity by placing the burden of Israel's social problems on their shoulders. They are rich, aren't they? So they clearly deserve punishment.

But even if we agree to lambaste the rich employers because of their wealth, the question will remain about the other employers. There are among Israel's community of employers people who own little carpentry workshops, or corner groceries, or kiosks, or garages and so on. They barely eke out a living. By what right does the state impose its social problems on them? Why should they bear the burden of the whole country?

Nobody has the right to force them to bear such a weight. The state should take care of the poor, through means such as negative income tax, employment incentives and day care. Leave the employers alone.