The Most Expensive Falafel in the Universe

The general strike is inevitable. Even if Histadrut head Ofer Eini got everything he asked for from Finance Minister Roni Bar-On today, he couldn't sign an agreement.

The general strike is inevitable. Even if Histadrut head Ofer Eini got everything he asked for from Finance Minister Roni Bar-On today, he couldn't sign an agreement. After all, if there is no strike, how can he prove to the 700,000 public sector workers that he has sacrificed his soul to obtain maximum benefit for them in the negotiations.

So he must call a strike. If not on Wednesday, then on Sunday. That's the reason Bar-On has offered a mere 1 percent pay raise. Bar-On doesn't want to waste ammunition before the battle has begun.

Eini calls it an affront, saying the raise is equal to the price of two falafels. But a 1-percent increase to a monthly salary of NIS 6,400 (the average wage in the public sector) means that every falafel costs 32 shekels. So these must be the most expensive falafels in the universe, and their price will continue to soar. In any event, this is not simply a negotiating tactic. Supervisor of wages Eli Cohen refused to give Eini more than 0.4 percent, to leave room for increases that the finance and prime ministers would have to give. It was clear that Eini would meet with Bar-On so Bar-On would have to go a bit higher than 1 percent. And then there would be a strike, and Bar-On would add a bit more. And then Olmert would come along, and he would have to give them something too, to end the strike. And so, in order to make sure that each is left with enough maneuvering room, Cohen surrendered his own.

The problem is that we're talking about horse trading. There is no "justice" and no "erosion of wages" involved. In these conditions of stable prices, because of seniority raises and ranking raises and collective wage agreements, public sector wages have actually risen in recent years. And because during these years income tax rates have dropped, net salaries have gone up - and with them, the standard of living.

So Eini came up with an interesting explanation, demanding a wage increase of 10.4 percent "like the one ministers received in January 2006." But what's the connection? There is none. It's merely a populist's wink to the pubic. The only reason that Eini could provide is that the economy is growing, and the public sector should be enjoying the party, too. But clearly, the enjoyment should be small and measured, to avoid destroying growth and jeopardizing employment rates.

Eini knows he is dealing with a weak government and a dysfunctional coalition. He also knows that in the last round he will face Olmert, who has already handed out billions for many, varied purposes over the past year. He also knows that Olmert seeks popularity and thus will be unwilling to face an extended strike. And Eini has an important ally in the government - and perhaps a Trojan horse: Ehud Barak. Eini helped Barak in his battle with Ami Ayalon over the leadership of the Labor party, and Barak is grateful, and he intends to support any wage demands Eini makes. It's good for Barak positions him well against Olmert and Bar-On, who after all, need to guard the coffers.

The question is whether Bar-On and Olmert can face the test. Whether they will put economic stability, growth and employment first, or whether Olmert's wish for short-term popularity will win out.