The Finance Ministry and the Histadrut were working to
bridge the gaps between them, but if that fails the
Histadrut has threatened to launch a general strike,
possibly starting as soon as Wednesday morning.
Histadrut chairman Amir Peretz and Trade Union division head
Shlomo Shani are scheduled to announce on Tuesday afternoon
their intent to bring the economy to a halt. If their threat
is carried out, the entire public sector will be
immobilized, including airports, seaports, banks,
universities, government offices, and municipal services.
Bezeq and Israel Electric Corporation workers would impose
sanctions as well. However, Histadrut sources told the press
that there is a good chance that the strike would be
The Histadrut is demanding the renewal of wage agreements
for 1999-2000, and the reevaluation of wage scales in the
public sector. Though formally this is not a wage hike,
effectively it is equal to a 16 percent salary hike for
state workers. The Histadrut is also asking that it be
retroactive to January 1999. In addition, the Histadrut
wants a halt to the erosion in pensioners' stipends.
After meeting with Histadrut officials yesterday morning,
Treasury wage chief Yuval Rachlevsky said their demands were
"unrealistic." He warned the labor union that their
sanctions would cause undue damage to the economy, already
battered by the security situation. The fact that there was
no inflation in 2000 means that there is no basis for an
increase in wages. Caving in to the Histadrut's demands,
Rachlevsky said, would lead to a total collapse of national
The Federation of Israeli Chambers of Commerce estimated
damages from such a strike would total NIS 40m. daily. "The
strike will especially hurt foreign trade and Israel's
reputation," said Federation director Yossi Shustak.
The Treasury has offered public-sector workers a one-time
stipend of NIS 700-1200, depending on their salary, with
higher stipends going to lower-paid employees. The sum would
cover the years 1999 and 2000, and total NIS 250m.
The Treasury proposals include a 0.75% wage increase in
workers' base salaries, effective immediately for 2001, for
a cost to the government of NIS 500 million. In return the
Treasury wants the unions to agree to refrain from any labor
sanctions in 2001.
Oded Tira, president of the Manufacturers' Association,
urged the Histadrut not to strike. He said a public sector
strike would cause a loss of production and damage to the
business sector that would total NIS 25 million each day.
"Striking against the economy during domestic recession,
security and political instability, and a slowdown in the
United States is a harmful action that would hurt the
economy and the workers, contrary to the Histadrut's
declared goal of protecting them," Tira said.
Labor officials always feel that an election campaign is an
opportune time for them to strike since the government is
especially sensitive at that time to show the public that
things are good. Also, the government may not be around to
have to face the consequences if it loses control. This
leads the government to offer a more generous package than
it might otherwise offer.