The Public Sector Wins

The better the labor conditions in the public sector, the worse it is for the economy, as it stunts economy's growth.

There was a time, years ago, when a certain balance was created between the public and private sectors. In the public sector salaries were relatively low but workers had job stability and extensive benefits. In the private sector, in contrast, pay was high but there was no job security and benefits were much less substantial.

Today the situation is different. The public sector has the private sector beat by a mile. Its pay is higher (except at the top), and it offers job security - critical in times of crisis, when the private sector is downsizing - as well as many benefits and a good pension. This we learn from reports on public sector and civil-service pay released yesterday and last week, respectively.

Defense Ministry staffers stood out among all government workers. Their average salary is 45 percent above that of others, at NIS 18,300 a month - which is higher than the average for most private businesses.

Teachers' salaries turn out not to be as low as presented in the recent wage disputes. The average teacher's salary is NIS 9,116 a month, and their annual three and a half months of vacation - the dream of every wage-earner - must not be forgotten.

There are also a few tricks that raise civil service pay sky-high, such as accruing unlimited vacation days and the possibility of cashing in sick days, that don't exist in the private sector. That is how former prisons commissioner and current Transportation Ministry Director General Yaakov Granot, received the salary equivalent of hundreds of vacation and sick days in 2008, catapulting his salary to as much as NIS 121,000 a month.

For the past two years physicians have been at the top of the pay scale. Out of 1,000 top earners in the civil service, 850 are physicians. Nine out of 10 of those receiving the highest wages are physicians earning more than NIS 60,000 a month.

The same is true in the public sector. The five highest-paid officials in the public sector are directors of health maintenance organizations, tipping the pay scale at around NIS 90,000 a month. But that is not the whole picture, because the report does not add physicians' earnings from their hospital work to their work at the kupot holim health maintenance organizations, which raises their total wage package considerably. Gaps in pay among physicians are huge. Young doctors, who work long shifts and are constantly on call, earn NIS 9,000 a month.

And speaking of wage gaps, we come to universities, where a recent contract was signed for a 24-percent pay hike. However, the raise was distributed so as to give faculty with seniority a higher percentage than their younger colleagues. Thus it is not surprising to find senior academics earning NIS 50,000 to 60,000 a month.

Like every year, the stars of the report are officials in the major government monopolies: The navigators in the Ashdod and Haifa ports take home NIS 70,000 a month, the highest earners at the Israel Electric Company make NIS 60,000 a month, flight controllers working for the Israel Airports Authority earn NIS 50,000 a month. They do not earn such sums because they have special knowledge, or because they are in high demand in the private sector (as is the case for physicians), but rather because they can shut down an essential monopolistic service.

Bank of Israel staffers also starred in the report, with wages as high as NIS 50,000 to NIS 60,000 a month, much more than the pay of their counterparts in the Finance Ministry, whose work is no less important. The wage director at the Finance Ministry, Ilan Levine, devoted a special chapter to them in the report. It is interesting that the research department at the Bank of Israel has never published a study of the exaggerated pay in the Israel Airports Authority, the Ports Authority or the Israel Electric Corporation - because it is obvious that people who live in glass houses shouldn't throw stones.

The economic problem is that the better labor conditions are in the public sector, even surpassing those of the private sector, the worse it is for the economy. That is because growth and employment do not come from the public sector, but rather from the private sector, which must be encouraged and developed to attract young people so that we will not become the State of the Electric Corporation and the Land of the Bank of Israel.