"The minimum wage is actually forcing us, the manufacturers, to pay a worker more than we think he deserves according to his output, which in effect creates payment of excess wages," Manufacturers Association of Israel president Zvi Oren said today during an "Israeli Labor" panel held during the Manufacturers Association 2014 industrial conference in the Herod's Hotel in Eilat.
"On the other hand," Oren added, "I do favor action to raise wages, and I appreciate the effort by Histadrut (General Federation of Labor in Israel) chairman Avi Nissenkorn, who has assumed responsibility for dealing with the matter. I call on him, however, to do this cautiously in order to avoid undesirable results. We should act in a broader context, and raise the minimum wage as part of an overall agreement with the government and the Histadrut that includes other elements, such as allowing flexible work hours and lowering employers' tax."
When it comes to a general strike for the purpose of raising the minimum wage, Oren says he is opposed: "I'm against strikes, because it doesn't allow real negotiations. In order to find the right solution, the parties have to be willing to listen to each other. You may be able to force your way on the other side and make them accept it with a strike, but if your way is mistaken, the result will be damage to the economy."
At the conference, Nissenkorn commented on his threat of a labor dispute, and blamed the government for employment problems in the economy. He stated, "It has already destroyed the country's welfare, and it is continuing this trend by destroying the health system. I expect the state to provide the basic things - security, welfare, and education - to the public on an equal basis, whether I'm rich or poor. What's this quarrel about medical tourism? For that you want to break up the government? What about restoring the public health system? In our country, manpower agency employees are suffering, and that's our problem. The Ministry of Finance is choking the hospitals, and teaching in the outlying areas is being affected. Every social worker who finishes his or her studies is sent to be a personnel agency employee. How can he or she solve other people's welfare problems? What reform are they talking about? Where is supervision of teaching and education? Personnel agency teachers don't interest the government. There is no obligation at the National Insurance Institute or the Ministry of Finance to employ handicapped workers. These are the real problems, and I'm saying that we'll pay attention to them, even if it takes a war. They have to personify values, not provide a negative example."
Commenting on the minimum wage, Nissenkorn said, "The truth must be told - the state is not dealing with the cost of living. 20% of household spending goes on housing, and if they solve the housing problem, they solve the problem, but that's not happening. Inequality is another severe problem. Today, one in seven people feels poor. National Insurance Institute figures show that 25% of wage earners are paid NIS 4,300 or less. That's 700,000 families. They're concentrated in the outlying areas, among the haredi (ultra-Orthodox) population, and among the Arab population. What sort of country do we want to end up with? With great gaps, or with great equality? The truth is that the government doesn't care. I don't understand their wars, what they're fighting about. I don't understand what they find interesting. Each of them wants a reform in his name, thinks about elections, and wants to be prime minister. It's hard to make ends meet even with NIS 5,300 a month. We have come to a labor dispute because there's no alternative."
About the industrial sector Nissenkorn said, "Industry has to prosper, because it is the economy's growth engine and provides jobs. It's the government that has hit industry again and again over the past two years. They're blackening the names of all the manufacturers. They say that industry must be encouraged, and the next day they pass a law that harms industry."
Published by Globes [online], Israel business news - www.globes-online.com - on November 20, 2014
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