Last week, we were treated to a rare sight: the high-tech and the construction industries, so different from each other, simultaneously attacking Minister of Finance Moshe Kahlon for the way he has dealt with the shortage of local manpower in both of them.
This is not coincidence. It is understandable opposition to the solution that the government characteristically proposes to deal with the problem of the shortage of workers in various branches of the economy: agriculture, long-term care, industry in general, and high-tech.
Past experience shows that the mechanism of importing foreign workers as the ultimate solution to a worker shortage has not succeeded in other industries, and there is no reason to suppose that it will work in high tech. The high-tech industry should therefore adopt a course of action different from the model adopted through lack of choice by the construction industry. In the construction industry, the prolonged shortage of local workers compelled the government to find a solution. The government in any case assumed that a greater supply of workers in the industry would mean faster construction, a larger supply of homes, and thus a fall in home prices.
What has actually happened is that instead of putting together a successful model of local training, and encouraging Israelis to go into construction trades, the government turned to the import of foreign manpower. Over time, the foreign workers ousted the local workers, creating several bad phenomena in the industry. For example, the indirect employment method led to the formation of manpower companies as employers of the workers, instead of the construction companies employing them directly. This in turn led to a high employee turnover, extortion of groups of workers and of the companies, and to higher wage costs because of soaring broker fees. Moreover, the long working hours of the foreign workers, a result of, among other things, the lack of family and social commitments, eroded the competitiveness of the local workers. Unlike a foreign worker, a local worker cannot work long months with unlimited hours of work, even at the same hourly rate of pay, and so, on a cost-benefit basis, it does not pay the employer to employ him.
There are several disadvantages to employing foreign workers. Among other things, the reliance on foreign workers reduces productivity in the industry, because of the difficulty in introducing new technology. This is almost mission impossible, because of the high turnover of workers, language difficulties, and the import of workers from countries where people are not technologically minded.
At the same time, wars, security crises, diplomatic incidents and so forth make the supply of foreign workers in the Israeli market unstable, adding to the uncertainty that is so typical of the Israeli construction industry. The absurd situation that is created is that on the one hand we are completely dependent on foreign workers, and on the other hand the economy does not have the privilege of being able to rely on foreign manpower as a solution for building thousands of homes in a short time.
The high-tech industry would therefore do well to learn from the failures of the construction industry. It should simply not agree to import foreign workers, which will create a slippery slope. As happened in the construction industry, the foreign workers will initially push local workers out of the industry. The second stage will be that the government will propose bringing foreign high-tech companies into Israel, subject to economic incentives, so that competition in the industry will become unfair and unequal.
Instead of bringing in foreigners, the government is well capable of taking up the challenge of promoting local work and local workers. We should not make do with the instant solution that holds negative consequences for the economy, but should go for a farsighted solution that sets a new generation of local workers on its feet.
The writer is a VP at Yanushevsky Engineering and Construction.
Published by Globes [online], Israel business news - www.globes-online.com - on February 29, 2016
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